Consumer Finance Bureau Suffers Setback as PHH Wins Ruling
Court reverses ruling in fight over $109 million penalty
A federal appeals court overturned Consumer Financial Protection Bureau sanctions against a mortgage company accused of a kickback scheme.
The ruling by the Washington-based appeals court on Tuesday is setback for the Obama administration. Since its authorization in the 2010 Dodd-Frank Act, the CFPB has been subject to almost constant criticism from Republicans and the financial industry over its efforts to reign in lending practices.
The agency had punished PHH Corp. for referring customers to insurers who then purchased reinsurance from a PHH subsidiary. CFPB determined those payments were part of an illegal kickback scheme. PHH said the law creating the CFPB gave an unaccountable director too much authority.