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Judges to Review CFPB Structure for Constitutionality
Tuesday, February 21, 2017 6:45 AM

A full panel of judges will decide whether the structure of the Consumer Financial Protection Bureau is constitutional, according to court documents filed Thursday. Oral arguments are scheduled for May 24.

Mortgage servicer PHH filed a lawsuit in 2014 challenging the CFPB's authority. In October, a three-judge panel of U.S. Court of Appeals in Washington found that the agency's structure is unconstitutional. But on Thursday, the court granted the CFPB's request for a review by a broader set of judges.

The agency was one of the centerpieces of former President Barack Obama's efforts to reform the financial system after the 2008 financial crash. But the agency has come under fire since Republicans swept the White House and Congress in the fall. House Financial Services Chairman Jeb Hensarling (R-Texas) is expected to introduce a bill soon that would make it easier to remove the director and scale back its enforcement powers.

Republican senators led by Sen. David Perdue of Georgia introduced a bill that would give lawmakers control over CFPB spending. Currently, the CFPB is funded through the Federal Reserve. The White House has already begun preparing to remove or replace Cordray, regardless of the outcome of the court's review.

Source: CNBC