The US Court of Appeals for the District of Columbia Circuit [official website] ruled [opinion, PDF] Tuesday that the structure of the Consumer Financial Protection Bureau (CFPB) [official website] is unconstitutional, holding that too much power is vested in its director, Richard Cordray. The ruling came in a suit brought by the PHH Corporation (PHH) [corporate website] in 2015, seeking to vacate a $109 million order imposed upon it by CFPB. The court invalidated the penalty and held that the CFPB’s status as a single-director independent agency was unconstitutional. The court will allow the agency to continue operation [Bloomberg report] as long as the director is removable by the president without cause. Prior to this ruling the bureau’s director was only removable by the president with cause. The court also held that CFPB violated due process by imposing a provision that allowed no statute of limitations for enforcement against violations on PHH.

The decision against CFPB will not void any of its prior actions. Last month CFPB announced [JURIST report] a $100 million fine against banking giant Wells Fargo for widespread illegal sales practices. In July the bureau ordered [JURIST report] Citigroup to refund $700 million to nine million credit card customers, along with a $70 million fine for illegal and deceptive practices. In April 2014 the CFPB ordered [JURIST report] Bank of America to pay $727 million for its illegal credit card practices. The CFPB was established under the Dodd-Frank Act, which was signed into law [JURIST report] by President Barack Obama in July 2010 in response to the 2008 financial collapse and created new regulations designed to strengthen oversight of the financial industry and protect consumers.