U.S. consumer financial agency’s backers seek to fight for it in court

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By Lisa Lambert | WASHINGTON

WASHINGTON Two lawmakers and six consumer
advocacy groups on Thursday sought to join a court case
involving the U.S. consumer financial watchdog as worries that
President Donald Trump will dismantle the agency reached a fever
pitch.

Democratic Senator Sherrod Brown of Ohio and Representative
Maxine Waters of California petitioned a federal court to be
allowed to intervene on behalf of the Consumer Financial
Protection Bureau in its appeal of a decision that its structure
is unconstitutional.

Meanwhile, six groups including U.S. Public Interest
Research Group made a similar request.

The ruling, that the president should be able to remove CFPB
Director Richard Cordray at will, has been stayed pending
appeal. Currently the director can only be fired for cause.

The filings followed a request from state attorneys general
to also be able to intervene in the case.

Currently the whole U.S. Court of Appeals for the District
of Columbia Circuit is deciding whether to review the ruling in
a case brought by mortgage servicer PHH Corp. It could
announce it will take the appeal, which most watchers expect, as
early as next week.

Republicans want Trump to remove Cordray, saying the
director has gone beyond his authority and provided cause to be
fired. Trump has met with former Texas Representative Randy
Neugebauer, a CFPB critic, indicating Trump is already seeking
Cordray’s replacement.

Also, Republican Senator Deb Fischer, of Nebraska, recently
introduced legislation to put a commission in charge of the
CFPB, and there is a good chance it will become law.

“There’s quite a lot of reasons to be concerned,” said
Michael Burr, faculty director at University of Michigan’s
Center on Finance. “It would be devastating to the very people
who supported President Trump to attack and dismantle the CFPB.”

The CFPB, created in the 2010 Dodd-Frank Wall Street reform
law to guard individuals from fraud in mortgages, student loans
and other financial products, does not need permission from the
Justice Department to file cases in courts below the Supreme
Court.

That means Trump may also ask the Justice Department to file
a brief in opposition in the appeal, essentially setting two
agencies against each other, said Mark Calabria, who studies the
CFPB for the conservative Cato Institute.



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