On October 11, 2016, the U.S. Court of Appeals for the District of Columbia Circuit ruled in PHH Corporation v. Consumer Financial Protection Bureau that the CFPB’s structure is unconstitutional.

In reaching this conclusion, the appellate court found that “No head of either an executive agency [established by the President] or an independent agency [established by Congress] operates unilaterally without any check on his or her authority” and, therefore, the Director of the CFPB “enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.” The court concluded that the CFPB “lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy.” In order to remedy the constitutional flaw, the appellate court ruled that the CFPB can continue to operate but “will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury,” and will be removable by the President. Report.