CFPB wins rehearing in PHH case — what will the court do next?

CFPB's enforcement of real estate referral and marketing regulations also at core of dispute
  • There are two issues that the hearing could address: How/when the CFPB should inform agents/brokers about regulation changes, and whether the single-director structure of the bureau is unconstitutional.
  • The CFPB's request for a rehearing indicates that its bigger concern is the structure/constitutionality issue.

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Does the director of the Consumer Financial Protection Bureau (CFPB) have too much power -- or the correct amount? And how and when should the bureau inform the real estate industry about any regulation changes? Is it before an agent or brokerage runs afoul of the regulation (by issuing a notice that the rules will change and soliciting comments about the plan to change it), or afterward through an enforcement action? Those are questions at the core of a case between the bureau and mortgage lender PHH, which is fighting back against the CFPB's charges that its captive reinsurance agreements involved kickbacks. How those charges were handled arguably landed the bureau in hot water and brought its future structure into question. After a hearing in which a panel of judges ruled that the CFPB's structure was unconstitutional and that the president has the right to remove the bureau's director at any time, the CFPB requested a re-hearing by the entire court. That re-hearin...