The embattled Consumer Financial Protection Bureau, which top Congressional Democrats recently pledged to defend against potential attacks from the Trump administration, has more defenders in its corner now, as more than a dozen state attorneys general are joining the fight to protect the CFPB.

According to multiple reports, including Reuters and The National Law Journal, the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington, as well as the District of Columbia are seeking to intervene in the legal battle between the CFPB and PHH over the constitutionality of the CFPB.

Last year, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that the CFPB’s leadership structure was unconstitutional and vacated a $103 million increase to a $6 million fine levied against PHH by CFPB Director Richard Cordray.

That decision makes Cordray removable “at will” by the president rather than “for cause,” as previously stipulated.

The CFPB and the government are fighting back against that ruling, asking the full Court of Appeals to rehear the case.

The Court of Appeals has not yet made its decision on whether to rehear the case, but now the Court has some new information to consider, courtesy of the 17 attorney generals, who say that the election of Donald Trump compels them to intervene in the CFPB lawsuit.

“When PHH filed the original petition for review in June, 2015, there was little reason for the State Attorneys General to intervene. At that time, the CFPB still had an independent Director and was fully committed to seeking rehearing to challenge the panel's ruling and defend the constitutionality of the bureau's independent structure,” the AGs state in their motion to intervene.

“But as a result of the presidential election,” the AGs continue, “the situation has changed.”

The AGs noted that as president-elect, Donald Trump expressed “strong opposition” to the Dodd-Frank Wall Street Reform Act.

The AGs also noted that, according to various reports, the Trump administration is rumored to be planning to fire and replace Cordray shortly, and could take other steps that could directly impact how the PHH lawsuit proceeds, if at all.

“Given the position of the president-elect and the new administration, it is urgent that the State Attorneys General intervene in order to protect the interests of their States and their States' citizens in an independent CFPB,” the AGs state.

The AG state that they should be allowed to intervene in the case and contribute their perspective because the Trump administration may not defend the CFPB’s structure, as the Obama administration did.

“The incoming administration has indicated that it may not continue an effective defense of the statutory for-cause protection of the CFPB director,” the AGs state.

“A significant probability exists that the pending petition for rehearing will be withdrawn, or the case otherwise rendered moot, in a way that directly prejudices the interests of the State Attorneys General and the citizens of the States that they represent,” the AGs continue. “Allowing the State Attorneys General to intervene would eliminate that risk and ensure that the courts can resolve this important controversy.”

The AGs argue that should the government give up in its fight to defend the CFPB, the consequences would be severe.

“Should the respondent choose to forgo further defense of this action, the interests of the State Attorneys General, and the citizens whom they represent, will be seriously impaired,” the AGs write.

“The panel's decision effectively rewrites the statute, permitting the immediate termination of the Director at will,” the AGs continue. “This will not only compromise the independence of the agency, it will likely derail pending policy initiatives and enforcement actions and possibly call into question the validity of past initiatives. As a result, the State Attorneys General and their States' citizens will be directly prejudiced.”

To read the AGs full filing, click here.

(Document courtesy of The National Law Journal)