Authored by: Kristen Jolaoso
Yesterday, the D.C. Circuit Court of Appeals issued an important ruling to the mortgage industry. The PHH Corp v. CFPB case has been the focus of many in the industry over the past months due to its far-reaching implications in a regulatory environment that many think are uncertain. The Consumer Financial Protection Bureau (CFPB) issued one of the largest enforcement penalties of $109 million against PHH related to violations of the Real Estate Settlement Practices Act (RESPA).
While PHH was not the first company that the CFPB has fined since it came into existence as an agency, PHH was the first company to appeal a Bureau order. On appeal, the Court ruled among other things that the CFPB violated due process by its retroactive interpretation of RESPA and that a three-year statute of limitations applies to enforcement actions brought by the CFPB under RESPA.
These two rulings are important to the industry, which has been concerned as to how far back the CFPB can look back when determining violations and penalty calculations related to those violations.