WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – helped lead an amicus brief filed today with a federal appeals court in support of the Consumer Financial Protection Bureau’s current structure as an independent agency.
The brief outlines how Congress decided after the 2008 financial crisis to design the CFPB as an independent agency with a single director to protect consumers’ interests and respond quickly to changes in the marketplace. The brief also emphasizes that Congress placed numerous checks on the director’s powers to ensure accountability.
“Congress created the CFPB to serve as a strong, independent cop on the beat to protect consumers from the kind of financial fraud and abuse that caused the Great Recession,” said Brown. “Stripping the bureau of its independence would give the special interests their wish to incapacitate the agency, leaving consumers at the mercy of predatory lenders. Instead of weakening the CFPB and gutting Wall Street reforms, Congress should be working to rebuild our infrastructure, put more people to work, and strengthen consumer protections.”
Created under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has a single director who is appointed by the President and can be removed only for cause. Brown has consistently urged President Trump to reject efforts by predatory lenders and their allies in Congress to remove CFPB Director Richard Cordray before his term expires in July 2018.
In October, a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled in PHH Corporation v. CFPB that the CFPB director’s “for cause” removal provision was unconstitutional. The court’s ruling canceled the “for cause” provision, allowing the president to fire the director at any time and for any reason.
But that ruling was vacated in February when the D.C. Circuit Court granted the CFPB’s request to rehear the case with the full panel of judges. Members of Congress, state attorneys general, and consumer advocacy organizations also pushed for the rehearing. The court will hear oral arguments on May 24.
The CFPB's single-director leadership is similar to the governance structure of the Office of the Comptroller of the Currency and Federal Housing Finance Agency. CFPB’s ability to fund its operations without relying on Congressional appropriations is similar to several other financial regulators.
Under Cordray’s leadership, the CFPB has returned nearly $12 billion to 29 million Americans who have been cheated by shadowy debt collectors, for-profit schools, and payday lenders, according to the bureau. The CFPB has taken actions against companies that add on hidden fees to credit cards, attempt to collect on debt that has already been paid off, discriminate against minorities, or use deceptive marketing to sell financial products. And because of the CFPB, banks can no longer offer mortgages to people who cannot afford to repay them.
A copy of the full brief is available here.
The following Senators signed onto the brief:
Sen. Sherrod Brown (D-OH)
Sen. Richard Durbin (D-IL)
Sen. Robert Menendez (D-NJ)
Sen. Jeff Merkley (D-OR)
Sen. Jack Reed (D-RI)
Sen. Brian Schatz (D-HI)
Sen. Chuck Schumer (D-NY)
Sen. Chris Van Hollen (D-MD)
Sen. Mark Warner (D-VA)
Sen. Elizabeth Warren (D-MA)
Sen. Daniel Akaka (D-HI)
Sen. Chris Dodd (D-CT)
Sen. Tom Harkin (D-IA)
Sen. Tim Johnson (D-SD)
Sen. Ted Kaufman (D-DE)
Sen. Harry Reid (D-NV)