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PHH opposes motion to intervene filed by Democratic lawmakers

Posted in CFPB Enforcement

PHH has filed a response in opposition to the motion filed with the D.C. Circuit by Democratic lawmakers Senator Sherrod Brown and Representative Maxine Waters to intervene in the PHH appeal.  The lawmakers are, respectively, the Ranking Members of the Senate Banking Committee and the House Financial Services Committee.

In opposing the motion, PHH makes the following primary arguments:

  • The lawmakers do not have Article III standing.  In their motion to intervene, the lawmakers argued that they have a legally protected interest that would be impaired by the litigation because should the CFPB not defend its constitutionality under the new Administration’s direction, their votes in support of Dodd-Frank which established the CFPB as an independent agency would be nullified.  The lawmakers also asserted that Congress is a proper party to defend a law’s constitutionality.  PHH argues that the lawmakers are not “Congress” but only individual members and, because they lack authorization to represent Congress, they do not have standing to defend a law.  PHH also challenges the lawmakers’ nullification argument, asserting that nullification only occurs when a legislator’s vote is denied determinative effect and the votes of the two lawmakers were not dispositive of Dodd-Frank’s passage nor were they denied their effect.
  • Based on the lawmakers’ statement in their motion to intervene that if en banc review is denied and the United States does not file a certiorari petition they “will file a petition for certiorari with the Supreme Court,” PHH argues that the purpose of the lawmakers’ motion is to enable them to file a certiorari petition.  PHH asserts that the decision whether the CFPB should seek certiorari in a given case is legislatively committed to the Executive Branch by the Dodd-Frank provision requiring the CFPB to seek approval from the United States AG to file a certiorari petition.
  • The lawmakers’ motion is untimely because federal appellate rules require a motion to intervene to be filed within 30 days after a petition for review is filed and PHH filed its petition for review in June 2015.  PHH argues that the results of the Presidential election should not excuse the delay in filing because the possibility that the new Administration might not defend the CFPB’s constitutionality “was entirely foreseeable from the beginning of this suit, when petitioners unambiguously and forcefully raised their separation-of-powers challenge.”  PHH also argues that even if concerns over political changes could excuse the delay, granting intervention would result in severe prejudice to PHH because it “would inject new party opponents into the case and cause considerable additional delay and expense for [PHH].”

On the same day the Democratic lawmakers filed their motion to intervene, a motion to intervene was filed by Americans for Financial Reform, Center for Responsible Lending, Leadership Conference on Civil and Human Rights, United States Public Interest Research Group, Maeve Brown (who chairs the CFPB’s Consumer Advisory Board), and Self-Help Credit Union.  In its response in opposition to the motion to intervene filed by the Democratic Attorneys General of 16 states and the District of Columbia, PHH indicated that it would be responding to the motion to intervene filed by the Democratic lawmakers as well as the motion to intervene filed by the consumer advocacy groups.  Thus, we expect PHH will soon be filing a response in opposition to the latter motion.