ALBUQUERQUE ― Attorney General Hector Balderas announced that he and a group of 16 attorneys general filed a motion Jan. 23 to intervene in a federal appeals case in order to defend the constitutionality of the federal Consumer Financial Protection Bureau (CFPB).
The case – PHH Corporation, et al. v. Consumer Financial Protection Bureau – is currently before the United States Court of Appeals for the District of Columbia Circuit. In an October 2016 ruling, a divided court found the structure of the CFPB unconstitutional. The CFPB filed a petition for rehearing of the decision, and that petition is currently pending before the court. To this point, the Obama administration had vigorously defended the CFPB in the appeal.
“We are sending a clear message to President Trump that the federal Consumer Financial Protection Bureau is critical in helping us protect New Mexico’s working families and vulnerable populations from corporate greed,” said Attorney General Balderas. “We need a powerful and independent watchdog agency in our nation to ensure consumer protection remains a priority, and that the abuses of big banks and Wall Street that caused the Great Recession are prevented from ever happening again.”
In yesterday’s motion to intervene in the litigation, the attorneys general argue that they have a vital interest in defending an independent and effective CFPB. They have used their authority to bring civil actions in coordination with the CFPB to protect consumers against unfair, deceptive and abusive financial practices. They argue that the court’s ruling, if permitted to stand, would undermine the power of state attorneys general to effectively protect consumers against abuse in the consumer finance industry, and significantly lessen the ability of the CFPB to withstand political pressure and act effectively and independently of the President.
They further argue that, as a result of the presidential election, it is urgent that attorneys general intervene in this case because President Donald Trump has expressed strong opposition to the Dodd-Frank reforms that created the CFPB. According to media accounts, President Trump’s administration is likely to fire the current director of the CFPB and take other steps that could directly and negatively impact how – and if – this case proceeds, including by abandoning the legal defense of the agency.
Congress created the CFPB in 2010. The agency’s purpose it to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace. During its 2016 fiscal year, the CFPB’s supervisory actions resulted in financial institutions providing more than $58 million in redress to over 516,000 consumers, according to its report to Congress. The agency receives thousands of consumer complaints every week from consumers across the country.
Joining New Mexico on yesterday’s motion are attorneys general from Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington and the District of Columbia.