A federal appeals court ruled yesterday that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional, fueling an election-year political fight over one of the signature government responses to the 2007-09 financial crisis, Reuters reported. The U.S. Court of Appeals for the District of Columbia Circuit threw out a $109 million penalty against PHH Corp in 2014, saying that the structure of the CFPB gives its sole director too much power. The three-judge panel, though, also sought to remedy the problem by giving the president the power to fire the director, which it said made the position similar to the Attorney General and other constitutionally sanctioned agency heads who answer to the White House. The CFPB is expected to request the entire appeals court conduct an "en banc" review of the case. The losing side will likely appeal to the Supreme Court. The ruling will affect other lawsuits against the agency in lower courts, but should not affect the government's $190 million settlement last month of fraud charges with Wells Fargo & Co. The CFPB was involved in that case.
