Archive

Posts Tagged ‘D. C. Circuit Court’

Is it Judgment Day for the CFPB?

May 24th, 2017 Comments off
IsitJudgmentDayfortheCFPBcreditJournalIE-postedtothedailybusinessnewsmhpronewsmhlivingnews

What is the fate for the CFPB? Credit: Journal IE.

Today is a big day in the history of the Consumer Financial Protection Bureau (CFPB), as it heads to an appeals court in a case brought by PHH Corp.

That case could completely reshape the organization.

As Daily Business News readers are already aware, critics of the CFPB point to leadership structure, data collection and so-called “trophy wins” as issues that need to be addressed. A D.C. Circuit Court ruled that the CFPB was unconstitutional, in the legal action brought by PHH.

The court ruled that the CFPB’s structure was constitutionally flawed and that its director should be removable at the will of the president.

In advance of today’s hearing, the House Financial Services Committee, led by Chairman Jeb Hensarling (R-TX) debated the future of the Financial CHOICE Act during a hearing on April 26th.

Originally introduced by Hensarling in 2016, the CHOICE Act included a proposal to replace the CFPB with a five-member bipartisan commission that would be subject to congressional oversight and appropriations.

jeb_hensarling__financialservice_house_gov__credit__rep_texas

Jeb Hensarling. Credit: House.gov

The Financial CHOICE Act re-establishes this rogue agency as a civil enforcement agency, patterned after the Federal Trade Commission. One that is responsible for actually enforcing the enumerated consumer protection laws written by Congress, instead of making up its own law in an unfair, deceptive, and abusive manner,” said Hensarling.

True consumer protection is only to be had in competitive, transparent and innovative markets which are vigorously policed for fraud and deception. That’s what the Financial CHOICE Act is all about.”

And, both experts and other politicians had their say on the matter at the hearing.

The CFPB is an unaccountable federal agency, as exemplified in the case PHH Corp., et al. v. Consumer Financial Protection Bureau,” said Norbert Michel, senior research fellow, Financial Regulations and Monetary Policy Institute for Economic Freedom and Opportunity at The Heritage Foundation.

CompanyMovesinfortheKillonCFPBcreditFlickrPHHCFPB-postedtothedailybusinessnewsphonewsmhlivingnews

Credits: Flickr, CFPB, PHH.

The PHH incident is a clear-cut case of an unaccountable federal agency flouting the basic principles of the rule of law. Private firms—financial or otherwise—cannot safely operate in such an environment without the expectation of being wrongly persecuted by the government that is supposed to protect all of its citizens from such actions.”

Congress can do even better by consolidating the various consumer financial protection statutes under one existing federal agency, such as the [Federal Trade Commission.]

Another Texas Republican was more to the point.

The CFPB is one of the most unacceptable and unaccountable agencies in the United States,” said Rep. Roger Williams. “This is what Dodd-Frank gave us and that is why it is so important to fix this disastrous law.”

 

A View From the Other Side…

CarsonApprovedbySenateCommitteeProvidesViewonMHcreditSherrodBrownOfficialPhoto-postedtothedailybusinessnewsmhpronewsmhlivingnews

Senator Sherrod Brown. Official photo.

Recent motions filed by U.S. Senator Sherrod Brown (D-Ohio) and U.S. Rep. Maxine Waters (D-Calif.), argued that Congress wanted a single director for the agency, because lawmakers who drafted the Dodd-Frank Act, which established the CFPB,understood that the nation needed a regulator that could respond quickly and effectively to new threats to consumers … and it knew that the CFPB’s effectiveness could be hampered by the delay and gridlock to which commissions are susceptible.”

Sixteen state attorney generals and the District of Columbia also filed a motion, defending the CFPB in its current incarnation.

As the representatives of millions of citizens across the country, the state attorneys general have used their express statutory authority to bring civil actions to enforce consumer financial protection laws and to pursue regulatory actions in coordination with the CFPB to protect consumers against unfair, deceptive and abusive financial practices,” the motion said.

CordrayDefiantSaysTrumpWon’tChangeAgencycreditWikipediaMaxineWaters-postedtothedailybusinessnewsmhpronewsmhlivingnews

Representative Maxine Waters. Credit: Wikipedia

The current ruling, if permitted to stand, will undermine the power of the state attorneys general to effectively protect consumers against abuse in the consumer finance industry.” 

 

Could MHI Have Killed the CFPB? Another Opportunity Missed?

As we reported here, prior to the close of filings, MHProNews asked the Manufactured Housing Institute (MHI) if they would be filing an amicus brief in the closely followed PHH vs. CFPB case.

Several operations and organizations have been among those who filed an amicus brief in the case. Was MHI among those organizations?

MHProNews sources say no, and MHI won’t comment.

Why?

Frank Rolfe.

The folks at MHI – the industry lobby group – are nice people, but what’s with the concept of silence is golden? Negative articles on the industry are met with ‘no comment.’ Positive news opportunities are met with ‘no comment.’ I’ve never seen anything like it,” says Frank Rolfe.

When you refuse to talkit looks to the public like an admission of guilt, and when you refuse to promote your product it looks like you are embarrassed by it.”

Silence, according to Rolfe, isn’t golden.

The appearance, per Rolfe, is that someone – in this case, MHI – is hiding something.

 

The View From the MH Industry

GOPSenatorstoPresidentelectTrumpFireCFPBHeadRichardCordraycreditTwitter-postedtothedailybusinessnewsmhpronewsmhlivingnews

A tweet from Senator Bob Sasse.

While the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

Those in the industry have not been shy about their feelings on the matter.

The information on this case also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

 

The Daily Business News will continue to follow the hearing and provide updates.

For more on the CFPB’s impact on the manufactured housing industry, click here. ##

 

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

 

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

 

(Copyright Notice: This and all content on MHProNews and MHLivingNews always have been and are Copyrighted, © 2017 by MHProNews.com a dba of LifeStyle Factory Homes, LLC – All Rights Reserved. No duplication is permitted without specific written permission. Headlines with link-backs are of course ok. A short-quoted clip, with proper attribution and link back to the specific article are also ok – but you must send a notice to iReportMHNewsTips@mhmsm.com of the exact page you’ve placed/posted such a use, once posted.)

The Heat is On – Pressure Mounts on CFPB

March 21st, 2017 Comments off
GOPSenatorstoPresidentelectTrumpFireCFPBHeadRichardCordraycreditCNNMoney-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: CNN Money.

As the Daily Business News has covered recently, the saga of the Consumer Financial Protection Bureau (CFPB), and its embattled director Richard Cordray, has been one for the record books.

Last Friday, the Trump Administration doubled down.

According to USA Today, the Administration officially joined a legal challenge aimed at sharply reducing the authority of the CFPB, a move that has drawn cheers and jeers from lawmakers.

Jumping into the PHH Mortgage vs. CFPB federal appeals court case, the Department of Justice argued in an brief that the structure of the CFPB is unconstitutional.

Comparing the CFPB to other independent agencies that are run by a commission with multiple members, the design of the CFPB may violate the Constitution because it is run by a single director that the president cannot remove at will,” said the brief.

MHCSuedAccusedofHousingDiscriminationByDepartmentofJusticeDOJlogo-postedtoDailybusinessnews

DOJ Logo.

There is a greater risk that an ‘independent’ agency headed by a single person will engage in extreme departures from the President’s executive policy.

According to the Washington Post, legal experts say that even though the brief does not make the Justice Department an official party in the case, it shows that the department is actively opposing the CFPB, and could signal that it may not defend the current structure of the agency if the battle reaches the Supreme Court.

It’s certainly not good for the CFPB,” said Michael Landis, litigation director for U.S. Public Interest Research Group, a consumer advocacy group.

The D.C. Circuit will put weight on the views of the Justice Department.

TheFateoftheCFPBWhatWillTrumpDocreditalabamatoday-postedtothedailybusinessnewsmhpronewsmhlivingnews

PresidentDonald Trump and Attorney General Jeff Sessions. Credit: Alabama Today.

If the case continues through the court system it could create serious issues for the CFPB.

The organization can defend itself in the D.C. Circuit court, but it would need to be represented by the Justice Department if it wants to take the challenge up to the Supreme Court,” said Landis.

In that scenario, the CFPB would need another group to join the case on its behalf to argue against PHH before the Supreme Court.

Democrats and other consumer advocates tried to do so when they requested to intervene in the case earlier this year, but the court rejected them.

In support of the CFPB, they say that the agency being independent is the entire point, to shield it from shifts in presidential administrations to provide a more consistent approach to regulation.

It is independent from the political process, just like the other bank and financial regulators,” said Brian Simmonds Marshall, policy counsel for Americans for Financial Reform.

The Manufactured Housing Industry Speaks

IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market.

As Daily Business News readers are already aware, while the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

Those in the industry have not been shy about their feelings on the matter.

The information on this case also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

For more on the CFPB’s impact on the manufactured housing industry, click here. ##

 

(Image credits are as shown above.)

 

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

CFPB Takes Action, Faces Additional Scrutiny

December 21st, 2016 Comments off
CFPBmanufacturedHousing-polititcalCartoon-c-2016LifestyleFactoryHomesLLC-LATonyKovach-575x355

Paradoy of CFPB logo – credit, Plus 1 Properties. Cartoon credit, MHProNews.

As the year draws to a close, the Consumer Finance Protection Bureau (CFPB) is taking action, and is also facing scrutiny.

According to Mortgage Daily News, The CFPB has entered into a consent order with Moneytree to settle allegations that the company engaged in deceptive advertising, sent consumers deceptive collection letters, and did not obtain written authorization for electronic repayments.

The consent order requires the company to pay approximately $255,000 in consumer redress and a civil money penalty of $250,000 to the CFPB. Moneytree did not admit to any wrongdoing in the matter.

The agency has also taken action against took action against four pawnbrokers in Virginia for “deceiving consumers about the actual annual costs of their loans.

Lawsuits filed in federal court by the CFPB alleged that the four companies broke the law by misstating the charges associated with pawn loans, and the suit seeks to get restitution for customers in addition to imposing penalties.

CourtRulesCFPBStructureUnconstitutionalcreditwikipediacfpbhubpages

Credit: Wikipedia, CFPB, HubPages.

CFPB Hurting the Middle Class?

A scathing op-ed from the Competitive Enterprise Institute (CEI) says that the CFPB has “imposed rule after rule that hurts consumers and the middle class especially,” and lays out a number of ways that the organization could be causing financial problems, including the CFPB’s qualified mortgage (QM) rules, making short term loans difficult to get, encouraging suing in disagreements as opposed to arbitration and compiling mass amounts of consumer data.

On consumer data, CEI points to an article written by former House Speaker Newt Gingrich in The Wall Street Journal.

Every month the CFPB … gathers data on 22 million mortgages, 5.5 million student loans, two million bank accounts with overdraft fees, and hundreds of thousands of auto sales, credit scores and deposit advance loans.

IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market. To see the video of Cordray and others, click here.

Daily Business News readers are no strangers to the ongoing saga of the CFPB and the Dodd-Frank Act, with extensive coverage of the impact on the manufactured housing industry, the CFPB being ruled unconstitutional by a D.C. Circuit Court, and both Dodd-Frank and the CFPB being deep in the cross-hairs of President-elect Donald Trump.

doddfrankcfpbdeepintrumpadministrationcrosshairscreditduke-postedtothedailybusinessnewsmhpronewsmhlivingnews

James Cox. Credit: Duke.

According to some experts, while an all out repeal of Dodd-Frank is unlikely, significant changes to key parts of the law are a real possibility.

I don’t think it eviscerates Dodd-Frank, but I think it takes away some parts,“ said James Cox, a Duke University expert on securities law speaking on the Trump team’s approach. ##

(Image credits are as shown above.)

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

CFPB Hammered over Abuse of Power

April 14th, 2016 Comments off

consumer_financial_protection_bureausteve rhode slas get oug of debt org__kicks_aAs housingwire tells MHProNews, in the opening rounds of the legal battle between PHH and the Consumer Financial Protection Bureau (CFPB) being heard in the U. S. Court of Appeals for the District of Columbia Circuit, one judge questioned the authority of the CFPB in general, and that of Director Richard Cordray in particular, noting the concentration of power in the director’s position.

In August, a D. C. Circuit Court issued a stay on a ruling by the CFPB’s director to fine mortgage services company PHH $109.2 million for violating the Real Estate Settlement Procedures Act by accepting kickbacks attached to loans made before July 21, 2008. However, Administrative Law Judge Cameron Elliott ruled attached kickbacks should be applied to loans made after July 21, 2008, amounting to $6.5 million. PHH petitioned a three-judge appeals panel which then issued a stay of the fine.

According to The Wall Street Journal, Judge Brett Kavanaugh called the structure of the CFPB “very problematic” that a government official could unilaterally overturn a financial practice that had been acceptable for years. “You are concentrating huge power in a single person and the president has no power over it,” he said. The court has an underlying assumption that if a practice is widespread, those participating must think it is acceptable under RESPA.

While the ruling from the panel is expected to be issued in several weeks, this is the first in a salvo of charges against the CFPB that is so far successful in challenging its all encompassing power.

Jennifer Lee, a former CFPB enforcement attorney and now a partner at the international law firm Dorsey & Whitney, stated,The D.C. Circuit was hostile towards the CFPB’s arguments on statute of limitations, separation of powers, constitutionality of the agency, penalty calculation, and the CFPB’s interpretation of the Real Estate Settlement Procedures Act when it comes to defining a kickback.”

The judges questioned how a government entity with such sweeping, unchecked powers can be held accountable to the people it is supposed to serve. In this instance with PHH, the kickbacks for the referrals did not alter the ultimate cost to the consumer.

Said Lee, “At a minimum, the agency may need to revisit its RESPA enforcement program and scrub its investigations docket to parse out actual harm versus theoretical harm cases.” ##

(Image credit: letsgetoutofdebt/Steve Rhodes)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.