More industry reaction percolated stemming from Tuesday’s decision by the U.S. Court of Appeals for the District of Columbia Circuit involving the Consumer Financial Protection Bureau, which on the same day handed out a $28.5 million enforcement action against Navy Federal Credit Union for what the regulator deemed to be improper debt collection actions.

To recap, a panel of three of the appeals court’s judges ruled in favor of a finance company that operates in the mortgage space, rescinding a $109 million enforcement action the bureau handed out nearly two years ago while calling the CFPB “unconstitutionally structured.”

After combing through the particulars of the 2-1 decision, three members of Clark Hill's Consumer Financial Services Regulatory & Compliance Practice Group shared an assessment that might lift executives and managers discouraged by the bureau operates.

In a commentary written by Thomas Brooks, Jane Luxton and Joann Needleman, they said the decision “may provide the financial services industry some comfort to challenge the bureau or force the bureau to be more thoughtful in its approach, but many consent orders are already in place, and stipulations of judgment in civil actions brought by the bureau have been entered by agreement of all parties.

“It is difficult to know what impact the court’s ruling will have on pending rulemakings on payday lending and those in the pipeline on arbitration and debt collection practices,” they continued in the assessment available here.

“In the near term, it seems likely that the bureau will seek rehearing from the full D.C. Circuit, given the signal importance of the decision. And there is little question that these developments will re-invigorate the calls to reform the CFPB, with strong views on all sides of the issue,” they went on to say.

Within hours of the appeals court announcement, the CFPB handed out its latest enforcement action. Bureau officials said they took action against Navy Federal Credit Union for “making false threats” about debt collection to its members, which include active-duty military, retired servicemembers and their families.

The bureau determined the credit union also unfairly restricted account access when members had a delinquent loan. According to the CFPB’s news release, Navy Federal Credit Union is correcting its debt collection practices and will pay roughly $23 million in redress to victims along with a civil money penalty of $5.5 million.

“Navy Federal Credit Union misled its members about its debt collection practices and froze consumers out from their own accounts,” CFPB Director Richard Cordray said. “Financial institutions have a right to collect money that is due to them, but they must comply with federal laws as they do so.”

The CFPB investigation found that Navy Federal Credit Union deceived consumers to get them to pay delinquent accounts. The bureau insisted the credit union falsely threatened severe actions when, in fact, it seldom took such actions or did not have authorization to take them.

The bureau also determined the credit union also cut off members’ electronic access to their accounts and bank cards if they did not pay overdue loans. Hundreds of thousands of consumers were affected by these practices, which occurred between January 2013 and July 2015.

As Clark Hill referenced, future actions like what the CFPB just took against Navy Federal Credit Union might be changing because of Tuesday’s appeal court ruling, which can be reviewed here. Writing for the majority, U.S. Circuit Judge Brett Kavanaugh gave what some observers might consider to be a scathing assessment of the bureau, which the Consumer Bankers Association found when it reviewed the ruling

“In short, when measured in terms of unilateral power, the director of the CFPB is the single most powerful official in the entire U.S. Government, other than the president," the court said. "Indeed, within his jurisdiction, the director of the CFPB can be considered even more powerful than the president. It is the director’s view of consumer protection law that prevails over all others. In essence, the director is the president of consumer finance."

Laurence Platt, a partner in Mayer Brown’s Washington, D.C., office and a member of the firm’s consumer financial services group, described the decision as being more of a “sweep” than the Boston Red Sox being ushered out of the Major League Baseball playoffs.

According to Platt, “For those who think that CFPB’s Richard Cordray has unbridled powers as the sole director of the CFPB, the U.S. Court of Appeals for the District of Columbia Circuit just proved otherwise in today’s highly anticipated decision involving PHH Corp.

“In a stinging rebuke to the CFPB, the court repudiated a key feature of the single director structure of the CFPB as well as the CFPB’s interpretations of a consumer credit law that it enforces,” Platt continued. “It sought to cure the purported flaw in the CFPB’s structure by providing that the director of the CFPB is subject to the supervision, direction and removal at will by the president of the United States. As written, the CFPB’s director is insulated from interference by the president and only can be terminated with cause.

“It’s a bigger sweep than the Cleveland Indians beating the Red Sox in three games to none,” he went on to say.