On February 16, 2017, the U.S. Court of Appeals for the D.C. Circuit granted the Consumer Financial Protection Bureau’s (CFPB) petition for rehearing by the full bench of the D.C. Circuit (en banc), vacating the three-judge panel decision issued on October 11, 2016, in the case of CFPB v. PHH Corporation.
Recall that in October, the three-judge panel vacated a $109 million penalty imposed by the CFPB against PHH for allegedly violating the Real Estate Settlement Procedures Act (RESPA) by paying for referrals where there is federally related mortgage. The court also held that the unilateral authority of the CFPB vested in a single person – the Director of the CFPB – was unconstitutional because the Director could be dismissed only “for cause,” and not at the discretion of the President.
The court’s granting of the petition for rehearing en banc wholly vacates the panel’s decision, including the conclusion that PHH did not violate Section 8(c)(2) of RESPA, allowing for the possibility that the panel of ten judges reconsider this issue. However, it appears from the court’s order that the focus of the rehearing will be on the question regarding the constitutionality of the CFPB’s single director structure.
Oral argument is scheduled for May 24, 2017, and a decision may not be released until 2018, which could be subject to further appeals. NAR is still considering whether to file an amicus brief in support of PHH and the RESPA Section 8(c)(2) safe harbor, as was done previously.
For a brief overview of the case, see NAR's Issue Brief.
For best practices on MSAs, see NAR’s RESPA Do’s & Don’ts for MSAs.
For more background on the case, view NAR's Window to the Law analysis.
For more information, see NAR's topic page on RESPA.