The Obama Administration is going to bat for the CFPB, tellingan appellate court that its ruling that the agency's structure isunconstitutional is deeply flawed.

And in court documents, the Department of Justice supports theCFPB's efforts to convince the court to have the full CircuitAppeals Court for the District of Columbia hear the case.

The ruling came in a case in which PHH, a mortgage lender, wasthe subject of $109 million penalty from the CFPB. A panel ofappellate court judges voided that penalty and sent the case backto a lower court for review.

In the case, the CFPB has been represented by its own attorneys.However, the appeals court invited the Obama Administration to filea brief in the case.

PHH has argued that the agency structure is unconstitutionalsince the director may only be removed by the president forcause—giving the director extraordinary power.

If the ruling stands, the agency's director could be removed bythe president for any reason. And the next step for any appealwould be the U.S. Supreme Court.

The CFPB was created as part of Dodd-Frank, legislation that wassigned by President Obama in 2010.

The Justice Department contends in its argument that the caseraises a significant issue that the Supreme Court has notconsidered.

The department states that the panel ruling departs fromprevious separation of powers cases that have been considered bythe Supreme Court.

However, in a recent court filing, PHH argued that the paneladhered to previous Supreme Court rulings, adding that CFPBDirector Richard Cordray did not properly apply federal law to thecase.

“The Director's autocratic actions are exactly what one wouldexpect from an agency that completely lacks constitutionalaccountability,” PHH attorneys added.