On Monday, May 15, the National Association of REALTORS® (NAR), alongside the Mortgage Bankers Association (MBA) and the National Association of Homebuilders (NAHB) submitted an amicus brief to the Supreme Court in the case of the Consumer Financial Services Association of America v. Consumer Financial Protection Bureau (CFPB), which is examining the constitutionality of the funding structure of the CFPB. While amici took no position on the constitutional question before the Court, we urged against a broad decision that could cause major disruption of the nation’s housing and real estate markets in order to protect consumers and the broader economy.
Nearly all home purchase transactions for more than a decade have been made in accordance with CFPB regulations and consumers have come to rely on the protections provided by the disclosure and transparency requirements imposed on lenders and real estate professionals under those rules. Should the Court issue a broad sweeping decision that calls into question those regulations, uncertainty and chaos could ensue with a lack of clarity around what rules govern mortgage and purchase transactions, in addition to the potential liability for industry professionals.
Similar to the joint advocacy efforts conducted in Seila Law LLC v. CFPB, NAR, MBA, and NAHB again requested that the Court conduct a severability analysis for any problematic provisions of the law at issue. If needed, such targeted action by the Court would preserve certainty and limit adverse consequences for both consumers and the housing industry. Amici also requested that the Court should grant de facto validity to unchallenged rules while Congress determines appropriate next steps if necessary, to further preserve financial stability of the market.
The Supreme Court will hear this case in the October term. Stay tuned to nar.realtor/respa for the latest updates.