All Banking Law, All in One Place. Bloomberg Law: Banking is the comprehensive research solution that powers your practice with access to integrated banking-related legal news, analysis,...
By Chris Bruce
June 24 — PHH Corp. says a U.S. Supreme Court ruling this week bolsters its appeal from a Consumer Financial Protection Bureau enforcement decision ( PHH Corp. v. Cons. Fin. Protection Bureau, D.C. Cir., No. 15-cv-01177, brief filed 6/23/16 ).
PHH, a New Jersey mortgage company, has appealed a June 2015 decision by CFPB Director Richard Cordray that ordered PHH to give up $109 million in payments that Cordray said were tied to violations of the Real Estate Settlement Procedures Act (RESPA).
The case is an important test of the CFPB's enforcement authority, and its ability to apply a reading of RESPA that PHH says is contrary to previous interpretation and practice.
In a June 23 letter to the U.S. District Court of Appeals for the District of Columbia Circuit, PHH said the Supreme Court's June 20 opinion in Encino Motorcars, LLC v. Navarro supports its position that Cordray's interpretation of RESPA doesn't merit deference from the court under the Supreme Court's 1984 ruling in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
According to PHH, Encino, which involved a Labor Department determination, confirms that agencies must give serious weight to existing interpretations of federal law, even those announced in an informal manner.
“ Encino therefore reaffirms that the Director’s interpretation is arbitrary and capricious and `receives no Chevron deference,' ” PHH counsel Ted Olson of Gibson Dunn & Crutcher said in the letter.
The D.C. Circuit heard argument in the case in April, with observers saying the CFPB faced hostile questioning from the D.C. Circuit panel (71 BBD, 4/13/16).
Interpretation of RESPA is a major factor in the case, but not the only one. Also at stake is whether CFPB administrative actions under RESPA are subject to RESPA's three-year statute of limitations.
Although everyone agrees the limitations statute applies when the CFPB brings a claim in court, the CFPB says the Dodd-Frank Act placed no such constraint on administrative actions.
In addition, PHH says the CFPB's governing structure is unconstitutional, saying the Dodd-Frank Act wrongly vested too much power in the hands of a single director.
Although the D.C. Circuit is expected to decide the case before the end of 2016, few expect the case to end there, no matter how the court rules.
The high stakes and the sharpness and novelty of questions presented by the case virtually guarantee further appellate action, they say.
To contact the reporter on this story: Chris Bruce in Washington at email@example.com
To contact the editor responsible for this story: Mike Ferullo at firstname.lastname@example.org
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)