Cordray wins reprieve (for now) as court will review ruling

The CFPB has been granted a review by a federal appeals court of a ruling from last fall that effectively found the structure of the agency unconstitutional.

In a decision released Thursday, the U.S. Appeals Court for the District of Columbia ordered that the CFPB petition for a review by the full panel of judges in the circuit be granted. A hearing has been set for May 24.

The panel is reviewing an Oct. 11 decision (CFPB v. PHH) by a three-judge panel of the appeals court that overturned a lower court decision. The panel ruled that the single-director structure of the CFPB as devised is unconstitutional, representing too great a concentration of executive power – and that the director, consequently, must serve at the will of the president (and not be subject for removal only “for cause”).

The court also ruled that CFPB, going forward, could no longer be considered an independent agency.

The ruling effectively keeps CFPB Director Richard Cordray in his seat at the agency, at least until the full panel renders its decision, as the October ruling is vacated. Cordray has said he would not resign.

Ruling granting en banc review of CFPB v. PHH; hearing set for May 24