An amicus brief filed today in the U.S. Court of Appeals for the District of Columbia Circuit says the Administration’s attempt to dismantle the Consumer Financial Protection Bureau (CFPB) is “an unconstitutional power grab” that will inflict enormous damage on ordinary Americans and the U.S. economy if the agency is shuttered. The brief––filed by the Center for Consumer Law & Economic Justice at UC Berkeley, Tzedek DC, and the Student Borrower Protection Center––also includes 39 state, local, and national organizations across the country that rely on the CFPB in their work to protect consumers.
The brief argues that the earlier order from U.S. District Judge Amy Berman Jackson that stopped the Administration from shutting down the CFPB should be upheld. In February, the incoming Administration moved to shutter the CFPB – firing staff, stopping work, and closing offices. In response, the union representing staff at the CFPB and several other plaintiffs filed a lawsuit in federal court claiming that the Administration had acted illegally. After extensive hearings in March, Judge Jackson found that “[t]hese actions were taken in complete disregard for the decision Congress made 15 years ago, which was spurred by the devastating financial crisis of 2008 [...] that the agency must exist and that it must perform specific functions to protect the borrowing public.” Because the Administration had acted unlawfully in shuttering the CFPB, Judge Jackson issued an order prohibiting the closure of the Bureau at least until the lawsuit is resolved. The amicus brief filed today provides support for Judge Jackson’s order.
Amici note that the “balance of harms” and the “public interest” – two crucial factors in determining whether a preliminary injunction is appropriate – weigh heavily in the plaintiffs’ favor. As the brief observes:
“[Defendants’] own affidavits state that they barred employees from entering the building, terminated contracts, relinquished funding, and instigated mass layoffs [...] Neither the Dodd-Frank Act nor any other source of federal law gives Defendants the authority to shutter a congressionally constituted agency without Congress’s involvement and to render that agency incapable of fulfilling its statutory mandates. [...] This Court should treat Defendants’ actions as what they were: a unilateral attempt by the executive branch to delete the nation’s top financial watchdog. ”
Using stories of individuals and families helped by the Bureau, the brief also explains the CFPB’s essential role in monitoring the consumer financial sector and enforcing the law. The brief notes that certain populations that are often targeted with unfair and deceptive practices––servicemembers, veterans, and older adults––were specifically and expressly protected in the Dodd-Frank Act. Disabling the CFPB would put millions of Americans in greater danger of financial harm and abuse.