If you're walking down the right path and you're willing to keep walking, eventually you'll make progress View More
While the Trump administration looks to pass legislation aimed at Dodd-Frank and the Consumer Financial Protection Bureau (“CFPB”), a lawsuit involving the extent of the CFPB’s authority and whether it can impose a $109 million penalty on a group of companies is continuing to be fought in a D.C. courtroom.
In June 2015, PHH Corporation and a group of other companies asked the D.C. federal appeals court to review an order from the CFPB that found that they had violated the Real Estate Settlement Procedures Act. The CFPB ordered them to pay more than $109 million within 30 days and also ordered them to stop engaging in certain practices in connection with mortgage lending. PHH and those other companies asked the D.C. federal appeals court to vacate the CFPB’s order.
The parties filed briefs on the issues, and after the passage of several months, a three-judge panel of the court heard oral arguments on April 12, 2016. On October 11, 2016, the panel issued a decision and held that the CFPB’s $109 million order was vacated.
Its decision also addressed a much larger issue, that is, whether the CFPB’s structure, with one director wielding unchecked power and who could only be removed for cause, was constitutional. The court held that it was not. As a result of the court’s holding, the President had the power to remove the director at will.
The CFPB wasn’t deterred. It asked the D.C. court to give it a rehearing in front of all of the judges of the court. It wanted what is called an en banc hearing, something that isn’t usually given.
However, on February 16, 2017, the D.C. court granted that request. It has decided that it will give the CFPB another shot to argue its position, this time in front of the entire D.C. federal appeals court. The argument is set for May 24, 2017.
You can find a copy of the court’s order here.
If you have any questions, please contact us.
By Nicholas P. Mooney II