On 1 May 2018, the U.S. Consumer Financial
Protection Bureau (CFPB) and PHH Mortgage let the filing deadline pass in which
either party could petition the U.S. Supreme Court to review the final ruling of
the U.S. Court of Appeals for the District of Columbia (D.C.) on their case. The
lack of further action ended a long-going litigation.
An underlying question for the Court of
Appeals was the constitutionality of the structure of the CFPB and that much of
the power of the Bureau resides within its Director. The Court ultimately
decided that the CFPB structure was constitutional, and the President could
only remove the Director “for cause” as opposed to “at will.”
Related: Ruling Stands in PHH v. CFPB Mortgage Case
The CFPB and PHH therefore accepted the
decision on the constitutionality of the Bureau as well as the other terms of
the final opinion. However, the question of the constitutionality of the
structure of the CFPB has been since revived.
In the case of the CFPB v. RD Legal Funding
LLC, the opinion of Judge Preska was in direct contrast to the ruling of the
U.S. Court of Appeals for D.C. Judge Preska went even further than just taking
issue with the authority of the Director and wrote that the entire section of
the Dodd-Frank Act creating the Bureau should be stricken.
The ruling was in response to a motion to
dismiss the case by the CFPB and State of New York. Judge Preska ruled that
since the structure of the CFPB is unconstitutional, the CFPB had no standing
to bring the suite. Judge Preska did allow the State of New York to proceed
with the case which denies the CFPB the opportunity to appeal the ruling unless
the States determines not to delay an appeal.
The relocation of a transferee often
involves the sale and/or purchase of a home and thus the policies and practices
involving real estate directly impact Worldwide ERC® members. The CFPB Director
has enormous powers with little oversight from Congress and thus the policy
positions of a specific individual as director determines the direction of the
Bureau. Under OMB Director Mulvaney, the CFPB has taken the position to enforce
consumer protection laws but to not “push the envelope”.
Related: Mulvaney Continues to Shape U.S. CFPB