DOJ invited to participate in Ocwen’s challenge to CFPB’s constitutionality

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A Florida federal district court has granted the motion filed by Ocwen Financial Corporation to invite the U.S. Attorney General to express the AG’s views on the CFPB’s constitutionality.

In April 2017, the CFPB filed a lawsuit against Ocwen in which it alleged Ocwen had engaged in unlawful conduct in connection with its servicing of residential mortgages.  In anticipation of filing a motion to dismiss challenging the CFPB’s constitutionality, Ocwen filed a motion in which it asked the court to invite the AG to participate in the briefing on the motion to dismiss.  In its motion, Ocwen referenced the amicus brief filed by the AG in the D.C. Circuit’s en banc rehearing in the PHH case in which the AG agreed with PHH’s position that the CFPB’s structure is unconstitutional.  Ocwen asserted that because the AG’s views on the CFPB’s constitutionality conflict with those of the CFPB, it was necessary for the court to hear “both sides from the government entities.”

In June 2017, Ocwen filed a motion to dismiss in which it argued that the CFPB’s structure violates the U.S. Constitution’s separation of powers.  In its order entered last week granting Ocwen’s motion to invite the AG to participate, the court stated that “[i]n light of [Ocwen’s] constitutional concerns, the Court finds it appropriate and prudent to ask the Attorney General of the United States to share with the Court its views on the issues raised in [Ocwen’s motion and the CFPB’s response].”

The order provides that “[p]ursuant to 28 U.S.C. section 2403 and Federal Rule of Civil Procedure 5.1, the court certifies to the [AG] that a statute has been questioned and permits the United States to intervene.”  (Section 2403 requires district courts to notify the AG of a constitutional challenge in which the United States is not a party.)  The order sets an October 2, 2017 deadline for the AG’s brief, an October 16, 2017 deadline for the CFPB to respond, and an October 23, 2017 deadline for the AG’s reply brief.

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