After the housing bubble burst and led to the Great Recession, the pressure was on Congress to ensure that this crisis could never happen again — and to create a system under which the financial services industry could be held accountable. So when Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and authorized the creation of the Consumer Financial Protection Bureau (CFPB), its primary objective was to put a “a cop on the beat to patrol the consumer financial services markets” in the wake of the financial crisis of 2007.
- Congress's primary objective was to put a “a cop on the beat to patrol the consumer financial services markets” in the wake of the financial crisis of 2007.
- PHH sought and obtained a stay on an $109-million order issued by the CFPB -- and prepared to challenge the scope of the behemoth government agency’s authority in court.
- The court is expected to rule on the case sometime this fall. Most compliance experts agree it is highly likely that the disappointed party will seek review by the full D.C. Circuit, and perhaps eventually by the Supreme Court.
- Sooner or later, Congress will face pressure to resolve concerns about the financial industry watchdog it created and the uncertain regulatory environment created by interpretations of RESPA.