Need Help Fighting the CFPB? One Company Turns to Trump's Justice Department
Ocwen Financial Corp., the mortgage loan servicer fighting a new Consumer Financial Protection Bureau lawsuit, has turned to an unlikely source for help: the U.S. Justice Department. In a federal court filing styled as a motion "to invite the views of the attorney general of the United States," the company on Wednesday took the remarkable step of asking the Justice Department to weigh in on the side of a corporation fighting another federal agency.
April 27, 2017 at 11:27 AM
4 minute read
Ocwen Financial Corp., the mortgage loan servicer fighting a new Consumer Financial Protection Bureau lawsuit, has turned to an unlikely source for help: the U.S. Justice Department.
In a federal court filing styled as a motion “to invite the views of the attorney general of the United States,” the company on Wednesday took the remarkable step of asking the Justice Department to weigh in on the side of a corporation fighting another federal agency.
At the heart of Ocwen's request is the fact the Justice Department under U.S. Attorney General Jeff Sessions last month abandoned the defense of the CFPB in a constitutional challenge that is pending in a Washington court.
Ocwen's lawyers point to the Justice Department's briefing in the U.S. Court of Appeals for the D.C. Circuit. The full court is reviewing a decision by a divided three-judge panel that struck down the CFPB's independent, single-director structure as unconstitutional. Ocwen is represented by Greenberg Traurig partner Bridget Berry and Goodwin Procter partner Thomas Hefferon.
“CFPB's own views are in direct conflict with those of the United States government, and for this court to hear both sides from the government entities can only aid the court's decision-making process on an issue of first impression in this circuit,” Ocwen's defense lawyers wrote. “The attorney general's views and interests will obviously not be adequately represented by CFPB, as demonstrated in the en banc briefing before the D.C. Circuit.”
The CFPB declined to comment. The Justice Department also declined to comment.
Now and then the interests of the Justice Department align with action that a company wants. The Justice Department and lawyers for HSBC Bank, for instance, both asked a federal appeals court last year to overturn a New York judge's order to release a compliance monitor's report. A decision is pending in the Second Circuit.
The Justice Department in various “statement of interest” filings does not take a stance on the merits of any case. These filings provide courts the perspective of the federal government. The U.S. Supreme Court regularly solicits the views of the Justice Department—in cases where the government is not a party—on matters that could concern or affect government interests.
The CFPB sued Ocwen last week in the U.S. District Court for the Southern District of Florida, alleging the company failed borrowers “at every stage of the mortgage servicing process,” in part, by ignoring complaints and illegally foreclosing on struggling consumers.
Ocwen, based in West Palm Beach, Florida, denied the CFPB's allegations, saying in a prepared statement that the lawsuit “can only be viewed as a politically-motivated attempt by the CFPB to grab headlines in reaction to the change of administration and recent scrutiny of the CFPB's activities.”
Ocwen on Wednesday doubled-down on its argument that the CFPB's lawsuit was politically motivated.
“Over the course of two years, Ocwen has been in regular communications with the CFPB. Despite Ocwen's cooperation and repeated offers to provide specific loan files for the CFPB's review, the CFPB has proceeded by filing a lawsuit without factual or legal merit, apparently in an effort to bolster its own political agenda,” the company said in the statement. “Although Ocwen believes the lawsuit should be dismissed on constitutional grounds, it also is prepared to vigorously contest the inaccurate CFPB allegations.”
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