Amicus Brief: PHH Corporation v. Consumer Financial Protection Bureau (CFPB)

CEI argues that the CFPB and its head are unconstitutional, No. 15-1177

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The Competitive Enterprise Institute, the 60 Plus Association, and the State National Bank of Big Spring filed an amicus brief in support of the petitioners in this case, PHH Corporation.

CEI and fellow amici ask the court to address the constitutional issues raised by this case, specifically whether the novel structure and operation of the Consumer Financial Protection Bureau violates the separation of powers.

The amici argue that the CFPB was designed to be—and operates as—a government unto itself. The CFPB is vested with sweeping executive authority to make and enforce rules that affect virtually every sector of the U.S. economy and its director does not answer to the U.S. President. There is no check on the director’s authority and further, the CFPB is exempted from Congress’s power of the purse and accompanying congressional oversight.

However, the Constitution does not permit the creation of such an entity. The Constitution mandates a separation of powers that imposes checks, balances, and accountability on the exercise of governmental authority. Regardless of Congress’s policy objectives, the Constitution does not permit the amalgamation of such sweeping and unchecked authority in a single executive entity. Certain features of the CFPB viewed in isolation may or may not be constitutionally permissible, but the combination is not. As a result, the CFPB should be invalidated.

Note: The amici are plaintiffs in a separate lawsuit challenging the constitutionality of the Consumer Financial Protection Bureau and the  merits of their claim in their own case may be affected by the Court’s decision in PHH v. CFPB.