The second-highest court in the land on Wednesday revisited a ruling that had declared the structure of the Consumer Financial Protection Bureau (CFPB) unconstitutional.
A three-judge panel on the D.C. Circuit Court of Appeals in October ruled against the CFPB, delivering a victory to industry groups and Republican lawmakers who have battled to limit the agency’s powers.
The full D.C. Circuit is now reviewing that ruling, with 11 of the court’s judges hearing the case. Judge Merrick Garland recused himself from the case.
In the 2-1 ruling from October, all three judges were appointed by Republicans. Of the 11 judges who heard Wednesday’s arguments, six were appointed by Republicans.
{mosads}PHH Corporation, a New Jersey mortgage lender that took the consumer bureau to court after it was fined $109 million for allegedly accepting kickbacks from mortgage insurers, says the answer is no. It argued Wednesday that the structure of the agency diminishes the president’s power under Article II of the Constitution to faithfully execute the laws.
Judge Thomas Griffith, a George W. Bush appointee, didn’t seem convinced that the president is powerless with a single director heading the CFPB.
“That would seem to me to strengthen the president’s power if you only have to get rid of one person,” he said.
Yet Griffith also noted that there has never before been a federal agency where so much power is in the hands of a single director.
The CFPB case is being closely followed in Washington, following months of speculation about whether Trump might fire the bureau’s director, Richard Cordray. Congressional Republicans have been pressing him to do just that.
The courtroom was so packed for Thursday’s proceedings that spectators filled two overflow courtrooms to watch the proceedings via video stream.
PHH’s attorney, the veteran Washington attorney Theodore Olson, argued that the Consumer Financial Protection Act expressly gives the director the exclusive power to interpret laws and to decide what to prosecute.
Judge Brett Kavanaugh, another George W. Bush appointee, said there is not the same Article II issue with the Federal Communications Commission, the Federal Trade Commission, the Securities and Exchange Commission or the National Labor Relations Board because Congress has historically structured these agencies with multi-member boards or commissions.
CFPB’s in-house lawyer Lawrence DeMille-Wagman argued court precedent states that if the president can remove an agency head for cause, then the president has sufficient authority.
“Can you give me an example where an agency head has been successfully removed for cause?” asked Judge Janice Rogers Brown, a George W. Bush appointee.
DeMille-Wagman wasn’t aware of an instance where the president has executed that power.