The U.S. Court of Appeals for the D.C. Circuit delivered a significant blow to the Consumer Financial Protection Bureau in PHH et al. v. CFPB by ruling that the agency’s long criticized single-director structure was unconstitutional.
The 2-1 decision came about after the CFPB filed its notice of charges with the bureau’s Office of Administrative Adjudication against PHH Corp., a New Jersey-based mortgage lender, for allegedly accepting kickbacks in violation of Section 8(a) of the Real Estate Settlement Procedures Act, or RESPA. According to the CFPB, PHH violated Section 8(a) of RESPA when it referred mortgage insurance business to mortgage insurers in exchange for mortgage reinsurance contracts with a wholly owned subsidiary of PHH, Atrium Insurance Corp.
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