The department also argued that the president should be able to remove the director of the independent agency at will, a shift that consumer advocates say could threaten the independent nature of the CFPB.

Under the Dodd-Frank Act that created the agency, the director can be removed only for cause — setting a high bar for a president who wants to put new leadership in place. That approach was called into question last fall when the U.S. Court of Appeals for the District of Columbia Circuit ruled in support of PHH, a mortgage lender suing the CFPB to challenge an enforcement action.

In October, a three-judge panel ruled that the agency should be restructured so that the president can have the ability to fire the director at will.

That ruling was vacated in February when the court granted the CFPB's request to rehear the case, this time with the full panel of judges. Oral arguments for the case are scheduled for May 24.