PHH Does Not File Appeal with Supreme Court, Ending Landmark Case Against CFPB

The case that thrust the director of the Bureau of Consumer Financial Protection into the spotlight as one of the most powerful individuals in the federal government appears to be over.

PHH Mortgage did not appeal a ruling from the Court of Appeals for the District of Columbia to the Supreme Court, meaning the Appeals Court’s January decision that the leadership structure of the agency is constitutional will stand.

In January, the full Appeals Court overturned a ruling from a three-judge panel back October 2016 that ruled the leadership structure of the agency was unconstitutional.

The case had been closely watched following the October 2016 ruling, which deemed the leadership structure of the CFPB — a single director — to be unconstitutional.

The case started back in 2014, when PHH Mortgage was found to have violated the Real Estate Settlement and Procedures Act as part of a kickback scheme and ordered to pay $6 million. Richard Cordray, who was director of the CFPB at the time, stepped in and overruled that decision, instead imposting a $109 million fine. PHH then sued the CFPB, alleging the agency was unconstitutional. A three-judge panel ruled back in 2016 that the leadership structure was unconstitutional before that was overturned by the Appeals Court’s full roster of judges earlier this year in an en banc ruling. The January ruling did dismiss the CFPB’s $109 million fine, which is likely why PHH declined to file an appeal request to the Supreme Court.

PHH had until May 1 to appeal the ruling.

Back in 2016, the three-judge panel of the Appeals Court ruled that because of its leadership structure, which allowed the director to be fired only for cause and not for any other reason, the director of the CFPB enjoyed “significantly more unilateral power than any single member of any other independent agency” in the federal government.



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