Important mortgage regulatory changes and robust examinations of financial institutions are on the consumer watchdog’s 2020 agenda, but all decisions are up in the air with the battle over the bureau’s constitutionality looming in court.
Mortgage industry groups have urged the Supreme Court to choose a narrow remedy approach if the CFPB’s leadership structure is found unconstitutional, in order to prevent market disruption.
Most briefs filed in the Seila Law v. CFPB case before the Supreme Court argue that the “for-cause” removal protection is not severable, and the court should invalidate the CFPB in its entirety or send the statute back to Congress.
Democratic senators have asked the Government Accountability Office to investigate whether the CFPB has fulfilled its statutory obligation to combat discriminatory lending practices. Separately, Rep. Maxine Waters questioned the bureau’s potential hiring of an enforcement director.
In opening briefs before the Supreme Court, a California law firm and the CFPB argued the bureau’s structure is unconstitutional, but took opposing positions on how to remedy the situation.
The Supreme Court will hear only one challenge to the CFPB’s constitutionality in its current term. Two other circuit court cases on the issue are on hold.
The CFPB’s latest financial report for fiscal year 2019 reveals a cut in the agency's workforce, lower funding levels and a slower enforcement process.
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