WASHINGTON—PHH Corp. will not appeal a January ruling that upheld the constitutionality of the Bureau of Consumer Financial Protection’s single-director structure, the company announced.
In January, the U.S. Court of Appeals for the D.C. Circuit upheld the BCFP's constitutionality in the PHH Corp. lawsuit against the Bureau – reversing the court's panel opinion from 2016 regarding the constitutional question. However, in a win for the financial services community, including credit unions, the court did reinstate the October 2016 panel's decision regarding the Real Estate Settlement Procedures Act (RESPA) issue, which held that former BCFP Director Richard Cordray's interpretation of RESPA was incorrect and that the resultant $109 million penalty levied on PHH was invalid.
Last month, the U.S. Court of Appeals for the Fifth Circuit agreed to hear a challenge to the BCFP’s constitutionality. This appeal was requested by defendants accused by the BCFP in 2016 of engaging in unfair payday lending conduct.
NAFCU said it will monitor the suit for its impact on credit unions and noted that current BCFP Acting Director Mick Mulvaney has even advocated for a commission-led BCFP, telling Congress that it would increase the Bureau's accountability and reduce its partisanship. Both CU trade groups have supported a commission to lead the BCFP and have backed Financial Product Safety Commission Act (HR 5266), which would put such a commission in place.