ACA International Files Brief to Provide Unique Perspective in PHH v. CFPB

Last week, ACA International filed a “friend of the court” (amicus) brief with the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corp., et al. v. Consumer Financial Protection Bureau. We also learned last week that the Trump Administration announced its intent to file an amicus brief in the same case by this Friday, March 17.

ACA International provided the following justification for its need to provide its perspective to the court:

“Pusuant to D.C. Cir. R. 29(d), counsel for Amicus Curiae ACA International states that a separate amicus brief is necessary because ACA has a perspective distinct from that of other Amici. ACA is the trade association for the credit-and-collections industry, and all or nearly all of ACA’s members operate under the consumer-finance laws that the Consumer Financial Protection Bureau implements. The credit-and-collection industry operates in a nationwide market, and ACA can address the regulatory and public-policy implications of how the bureau interprets and applies those consumer-finance laws from an industry-wide perspective in a way that the Parties themselves cannot…”

The four key points made by ACA in its brief include:

1. The Bureau’s structure amounts to an unconstitutional delegation of legislative power to a single individual;
2. The Bureau’s insulation from Presidential and Congressional oversight deprives its work of democratic accountability;
3. The Bureau’s unique funding mechanism, in addition to being insulated from accountability, also raises an unusual conflict of interest; and
4. The Bureau’s conduct in practice has evaded traditional, transparent mechanisms of administrative procedure in favor of back-door policymaking through litigation and enforcement, and regulated actors - like those who make up ACA’s membership - should not learn that the ground rules have changed only when they are facing an enforcement action that the Bureau has brought. 

With respect to the third point, related to the CFPB’s funding, ACA highlights that, to avoid going through the appropriation process, the Bureau has an incentive to maximize its income from other sources – including, but not limited to, fines and penalties.

With respect to the fourth point, the association notes,

“The traditional, transparent mechanisms of administrative procedure are cumbersome and time-consuming, which results in a great temptation to make policy through back-door means such as litigation and enforcement.”

And further that,

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Congress recognized the effects upon interstate commerce of debt-collection practices in the FDCPA, and stated explicitly that one of its purposes was “to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.” Congress has thus evinced an intent not to weave a regulatory web so tangled that it snares legitimate, compliant, law-abiding actors along with the abusive actors at whose unfair and deceptive conduct that statute is aimed.

A copy of the full Amicus Brief submitted by ACA International can be found here.