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WASHINGTON A U.S. appeals court on Thursday
rejected separate bids by 16 states and two Democratic lawmakers
to defend the U.S. Consumer Financial Protection Bureau in a
legal battle that could defang the agency created under former
President Barack Obama.
In a brief order, a three-judge panel of the U.S. Court of
Appeals for the District of Columbia Circuit denied a request to
intervene filed by the states, including New York and
Connecticut. The court also rejected similar motions filed by
nonprofit consumer groups and two lawmakers, U.S. Senator
Sherrod Brown of Ohio and congresswoman Maxine Waters of
California, also seeking to defend the board.
The state officials, led by Connecticut Attorney General
George Jepsen, said in a court filing they were concerned the
Trump administration would fire the agency’s independent
director, Richard Cordray, who was appointed by the Democrat
The agency was created during Obama’s presidency in the 2010
Dodd-Frank Wall Street reform law.
The court ruled last October that the structure of the
agency, charged with guarding consumer finances, was
unconstitutional. The agency immediately asked the court to
reconsider its decision but the Trump administration could drop
The state officials asked to be able to defend the agency in
the lawsuit brought by mortgage lender PHH Corp and
ensure the case is not declared moot if Trump’s administration
drops the appeal of the ruling.
Under the 2010 law, the director can be fired only “for
cause,” limiting a president’s ability to remove him. The
appeals court ruled that this restriction was an unlawful
limitation on presidential power.
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