Another Loss for the CFPB: The DC Circuit Declares the CFPB’s Structure Unconstitutional and Overturns Its Interpretation of RESPA

    View Authors October 2016

    On October 11, 2016, the DC Circuit vacated a $109 million enforcement order by the Consumer Financial Protection Bureau (CFPB) against mortgage lender PHH Corp., finding the CFPB’s structure unconstitutional and rejecting the CFPB's interpretation of the Real Estate Settlement Procedures Act (RESPA) as unreasonable. The ruling places constraints on the agency's ability to regulate through enforcement proceedings and encourages the use of informal guidance. While it also opens the CFPB up to further litigation and the potential for Congressional action, it is unlikely to result in a change to the day-to-day operations of the CFPB.