Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.

The mortgage business is still reeling in the wake of the landmark ruling from the United States Court of Appeals for the District of Columbia Circuit, which last week declared the Consumer Financial Protection Bureau’s leadership structure unconstitutional and vacated a $103 million fine against mortgage lender, PHH.

While PHH and many in the financial services industry were hoping that the court would wipe the CFPB from the face of the earth, that didn’t happen.

The CFPB will continue to operate, albeit with the director of the CFPB now serving at the pleasure of the President, which basically means that that position is now no longer any different than any other cabinet position.

In the wake of the ruling, some argued that the court’s ruling can and will be used as a weapon by Republicans to further blunt the CFPB’s power (or perhaps abolish it altogether).

One prominent Republican, Rep. Scott Garrett, R-NJ, took the opportunity to tell his constituents about the ruling and how the CFPB’s influence is hurting consumers not helping them.

In an email, Garrett wrote:

This week, a federal court found that one of the most secretive Washington bureaucracies violates the constitutionally-mandated system of checks and balances designed to protect Americans from abuses of government authority. The court decided that the structure of the Consumer Financial Protection Bureau is unconstitutional because of its toxic combination of immense power and little accountability. As Chairman of the Financial Services subcommittee that is responsible for making sure our country has competitive and robust capital markets, I have worked with my colleagues on solutions to restructure the CFPB in a way that protects consumers while holding Washington accountable to We the People

Garrett goes on to say that the CFPB “alone decides” which financial products consumers are “allowed” to buy.

“Everything from mortgages, to car loans, to retirement savings, the CFPB’s current structure allows it to unilaterally infringe on the economic choices of every American,” Garrett writes.

“With a single, politically appointed head and its ability to bypass Congress to get funding, the CFPB acts as a rogue federal bureaucracy,” Garrett continues. “And while the CFPB has an important mission, it’s unacceptable to allow a single government agency to control how Americans can spend their own money.”

Garrett also agrees with the wording of the court’s ruling, in which Judge Brett Kavanaugh called the director of the CFPB the most powerful member of the government outside of the president.

Garrett also reiterates his support for the Financial CHOICE Act, which is currently moving forward in the House of Representatives.

If passed, the bill would abolish the Dodd-Frank Act, the law that created the CFPB, and would dramatically change, if not abolish, the CFPB as well.

The bill is unlikely to pass during the current congressional and presidential term, but if Republican nominee Donald Trump wins, all bets on the CFPB are likely off, as Trump has often spoken of doing away with government regulations should he become president.

And what agency is more regulation-tastic than the CFPB?

So what happens now for the CFPB? Well, one view of the ruling suggests that the court’s decision is actually a “blessing in disguise.”

Adam Levitin, writing for, suggests that the court’s ruling is full of “inflammatory rhetoric,” but does little to change the CFPB’s day-to-day functions.

Here’s Levitin on the ruling:

Although the CFPB’s current structure was declared unconstitutional, the court also immediately remedied the flaw by declaring that the CFPB Director is now removable by the President at will, rather than only "for cause" as provided for by the Dodd-Frank Act.

Levitin writes that are four critical implications from the court’s ruling.

First, the CFPB’s existing rule makings and enforcement actions remain valid and unaffected, Levitin writes, calling that a “huge win” for the CFPB.

Second, Levitin says that the fact that the CFPB director is now removable by the president for any reason, as opposed to only “for cause” during the director’s five-year term, is not a “particularly big deal” at all.

Third, and most importantly, Levitin writes that the CFPB’s budget and the source of its funding are unchanged. The CFPB is funded by the Federal Reserve instead of via Congressional appropriations, as most other federal agencies are.

And that’s been bone of contention among Republicans for quite some time. Efforts to change the CFPB’s budgetary process are continuing, but the court’s decision means that changing how the CFPB gets its money is left to the politicians.

“The importance of this cannot be over-emphasized. It means that if anyone wants to affect the CFPB's ability to function it has to be done out in the open.” Levitin writes. “The agency cannot be quietly asphyxiated through the appropriations process as has happened with the SEC and FTC.”

And finally, Levitin writes, the decision will actually “take the wind out of the sails” of the Republican effort to gut the CFPB.

“There was a very targeted surgical fix, and now the agency’s structure is kosher,” Levitin writes. “Combine that with the Wells Fargo fake account scandal, which underscored the need for a strong CFPB, and the House GOP's attacks on the CFPB are standing on increasingly shaky ground.”

It’s doubtful that the CFPB will come up during the last presidential debate, which is set to take place Wednesday evening at the University of Nevada in Las Vegas, but there’s still a glimmer of hope for a housing discussion between the two major candidates for president.

According to the Commission on Presidential Debates, Chris Wallace of Fox News will serve as the moderator of the final debate and chose the debate topics, which are:

  • Debt and entitlement
  • Immigration 
  • Economy
  • Supreme Court
  • Foreign hot spots
  • Fitness to be President

Given the impact of the housing crisis in Las Vegas, where as many as 25% of the homes in the city are still underwater, perhaps a housing question will come up during the economy section.

But based on the previous debates, it will likely be more discussion of his missing taxes, her missing emails, and everything else they’ve already discussed ad nauseum in the first two debates.

Perhaps it’s too much to ask of our presidential candidates and the mainstream media in charge of these debates to discuss how the people who’s votes they so desperately crave are going to be able to afford a roof over their heads.

But discussions of rising rents and tight credit boxes don’t make for good television. They’d all rather wallow in the mud than talk about anything of worth. I guess we shouldn’t be surprised. They got into politics for a reason, after all.

And with that, have a great week everyone!