Justice Department turns against CFPB in constitutional court case

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The Justice Department plans to defend President Trump's executive authority by siding with PHH Corp. in the mortgage lender's contentious case alleging the Consumer Financial Protection Bureau is unconstitutional.

In a filing made late last week, the Justice Department said it would file a friend-of-the-court brief no later than March 17. The motion appears to indicate that the White House intends to resolve the fate of CFPB Director Richard Cordray through the courts rather than through an action by the president, lawyers said.

"The views of the United States on matters involving the President’s removal power are not always entirely congruent with the views of independent agencies," the Justice Department said in its motion Friday with the U.S. Court of Appeals for the District of Columbia Circuit.

The move was expected after Trump won the presidential election last fall. While President Barack Obama's Justice Department had been expected to back the CFPB, Republicans have long argued that the agency's structure is unconstitutional.

Last month, the D.C. Circuit scrapped an earlier panel's ruling that found the CFPB was unconstitutional. A panel of 10 judges agreed to hear the CFPB's appeal in a case that could determine if the head of an independent agency can be fired at will by the president. The bureau's response and amicus briefs in support of the CFPB are due March 31.

The Justice Department said the timing of its brief would provide the CFPB "adequate time to address … points made in the Department of Justice's filing."

The D.C. Circuit is scheduled to hear oral arguments in the case, PHH Corp. v. CFPB, on May 24.

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Finance and investment-related court cases Richard Cordray CFPB DoJ