Mortgage servicer PHH Corp. decided against taking its challenge to the Consumer Financial Protection Bureau’s leadership structure to the U.S. Supreme Court.
PHH, which was challenging the leadership structure at the federal consumer finance watchdog as part of a bid to escape a $109 million judgment imposed by the CFPB, had until May 1 to file a petition for writ of certiorari with the high court.
Dico Akseraylian, a spokesman for PHH, confirmed that the company did not petition the Supreme Court but declined to comment further.
The full U.S. Court of Appeals for the District of Columbia Circuit ruled Jan. 31 that the CFPB’s structure was constitutional, rejecting PHH’s argument that the bureau’s single director that could only be terminated by the president for cause was not a violation of the Constitution’s separation of powers clause. However, the court also ruled that the CFPB’s $109 million penalty against PHH for violating the Real Estate Settlement Procedures Act was improper, invalidating the penalty.
The ruling by the en banc panel at the D.C. Circuit overturned an October 2016 panel decision that both overturned the CFPB’s RESPA penalty and deemed the bureau’s structure to be unconstitutional. To fix that, the D.C. Circuit panel determined that the CFPB director could serve at the president’s will rather than the current for-cause termination requirement.
Escaping the $109 million penalty appears to have been enough of a victory for PHH, despite hope among conservatives and opponents of the bureau that the company would continue its fight.
Ted Olson, the Gibson Dunn & Crutcher partner who represented PHH at the D.C. Circuit, is also representing All American Check Cashing Inc. in a challenge to the CFPB’s structure at the U.S. Court of Appeals for the Fifth Circuit.
Other challenges to the CFPB’s constitutionality moving through the circuit courts could yet end up at the Supreme Court.
The Fifth Circuit agreed April 24 to hear the Mississippi-based check casher and payday lender’s case. All American is looking to stop a CFPB enforcement action over alleged deceptive and abusive treatment of customers that is pending in the U.S. District Court for the Northern District of Mississippi.
The CFPB under acting Director Mick Mulvaney asked the Fifth Circuit to reject All American’s appeal, arguing that many of the constitutional problems that the company cites were fixed by Mulvaney’s late November appointment.
A third CFPB constitutional challenge is pending in the U.S. Court of Appeals for the Ninth Circuit.
In the Ninth Circuit case, Seila Law LLC is trying to stop a 2017 CFPB civil investigative demand related to its work for defunct debt collection firm Morgan Drexen. The firm argues that the bureau’s alleged constitutional problems should torpedo its investigative efforts.
The CFPB has continued to defend the subpoena under Mulvaney’s leadership, and the Seila Law case is still in the briefing stage.
The cases are: PHH Corp. v. Consumer Financial Protection Bureau , D.C. Cir., No. 15-01177, decision 1/31/18 .
Consumer Financial Protection Bureau v. All American Check Cashing, Inc. et al , 5th Cir., 16-cv-00356, motion granted 4/24/18 .
Consumer Financial Protection Bureau v. Seila Law LLC , 9th Cir., No. 17-56324, appeal filed 9/1/17 .
To contact the reporter on this story: Evan Weinberger at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Ferullo at email@example.com
Copyright © 2018 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 firstname.lastname@example.org.
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 email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)