PHH Hearing Recap and CFPB Status Forecast

Having listened to a vast majority of the PHH hearing, the main focus was the issue of constitutionality. Specifically, whether the director of the CFPB’s for cause termination requirement is an unconstitutional delegation of presidential power.

It was clear that a couple of justices sided with PHH, however there were more pro CFPB structure judges overall. The main issue on one side for PHH comes down to the power of the CFPB and the limited aspect to which it can be controlled.  In particular, the fact that PHH argued that giving one person the power over the CFPB, protected for a five-year term, with limited oversight vested too much power outside of elected hands. PHH argued that if such a pattern were repeated for multiple agencies, the President would basically become a meaningless puppet figure.

The counter argument is that there are boards for other agencies that the President doesn’t control, with he or she being able to appoint two or three members.  The counter argument therefore is that the President’s power is already being diffused by existing agencies.

It does seem as though the CFPB has become more confident in sticking around in their current capacity. For the considerable future, it doesn’t appear anything drastic will be changing.  So for now, business can be conducted as usual provided you’re taking all the proper precautions in adherence to regulations.