As anyone who is associated with the residential real estate settlement services industry can appreciate, resolution of the PHH case by the full bench of the D.C. Circuit Court of Appeals 1 has brought much-needed clarity and reason to fundamental issues under the Real Estate Settlement Procedures Act (RESPA). This includes clarifying that Section 8(c) of RESPA really is an exemption and that the time limit for the government to bring a RESPA enforcement action administratively is three years—the same as for a government enforcement action that is brought in court.

The majority's en banc opinion did not re-analyze these RESPA issues but instead—no doubt in recognition of the thorough and well-reasoned RESPA and due process analysis by the three-judge panel in 20162—reinstated the panel's decision on those points.3  The majority also confirmed that the single-director structure of the Consumer Financial Protection Bureau (CFPB) is constitutional and that its director can only be fired by the president for cause.4

Download >> RESPA and UDAAP Enforcement Following The PHH Decision: What To Expect

Footnotes

1 PHH Corp. v. Consumer Fin. Prot. Bureau, No. 15-1177, 2018 U.S. App. LEXIS 2336 (D.C. Cir., Jan. 31, 2018).

2 PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1, 50-55 (D.C. Cir. 2016).

3 PHH Corp., 2018 U.S. App. LEXIS 2336, at *21 (reinstating the three-judge panel opinion insofar as it related to the interpretation of RESPA and its application to the case).

4 PHH Corp., 2018 U.S. App. LEXIS 2336, at *12 ("Because we see no constitutional defect in Congress's choice to bestow on the CFPB Director protection against removal except for 'inefficiency, neglect of duty, or malfeasance in office,' we sustain it.") That holding reversed the panel's determination that the CFPB structure was unconstitutional but could be remedied by striking the "for cause" provision. PHH Corp., 839 F.3d at 37. When the CFPB appealed, seeking review from the full court, the Trump administration made headlines when it switched sides to oppose the CFPB's position, urging a finding of unconstitutionality.

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