RESPA

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It has been more than five years since the Consumer Financial Protection Bureau (“CFPB”) has issued a consent order based on alleged violations of Section 8 of the Real Estate Settlement Procedures Act (“RESPA”).  On August 17, 2023, the CFPB announced a consent order with a non-bank mortgage lender and a consent order with a real estate brokerage company—totaling nearly $2 million in combined penalties—based on allegations that the mortgage company provided things of value and the real estate brokerage company received things of value in violation of Section 8 of RESPA.  Perhaps it should come as no surprise that the activities at issue in the consent orders are promotional events and marketing services agreements, two arrangements about which the CFPB provided guidance in its Frequently Asked Questions in October 2020. …

Continue Reading RESPA Enforcement is Back! The CFPB Takes Aim at Marketing and Promotional Activities

Last Thursday, the CFPB announced in a blog post that it is considering revising its mortgage servicing rules.  This development follows a request for information from the CFPB last fall seeking public input on, among other things, streamlined loss mitigation options.  The CFPB’s current mortgage servicing rules were promulgated in the wake of the foreclosure crisis and took effect in 2014.  Among other things, the rules create a framework for default servicing under which servicers must evaluate loss mitigation applications according to a prescribed process with deadlines and notice requirements.  The COVID-19 pandemic put this loss mitigation framework to the test as the number of borrowers who had trouble paying their mortgages skyrocketed.…

Continue Reading CFPB Announces Plans to Streamline Mortgage Servicing Rules

Lead generation and the Real Estate Settlement Procedures Act (“RESPA”) compliance remain hot topics following the Consumer Financial Protection Bureau’s (“CFPB”) February 2023 advisory opinion regarding digital comparison shopping platforms.  In its March 2023 issue of Consumer Compliance Supervisory Highlights, the Federal Deposit Insurance Corporation (“FDIC”) discusses certain examination observations and regulatory developments, including those related to FDIC-insured banks’ payments for leads under Section 8 of RESPA.  The Highlights indicate that, while fact specific, indicators of risk under RESPA in connection with lead generation arrangements include third parties that do one or more of the following activities:…

Continue Reading The FDIC’s Observations on Lead Generation and RESPA Compliance

Can online lead generation be done compliantly under Section 8 of the Real Estate Settlement Procedures Act? The answer is yes, but it is important to navigate the impermissible activities recently identified by the Consumer Financial Protection Bureau. On February 7, 2023, the CFPB issued long-awaited guidance in an advisory opinion addressing how it interprets…

The Real Estate Settlement Procedures Act is ambiguous, and compliance often turns on the facts of arrangements. For that reason, settlement service providers have been asking the Consumer Financial Protection Bureau for guidance since it took responsibility for RESPA nearly 10 years ago. These calls were amplified when Section 8 of RESPA was an early…

The U.S. Court of Appeals for the D.C. Circuit (the “court”) has issued its long-awaited en banc decision in PHH v. CFPB. In a January 31, 2018 opinion, the court rejected the three-judge panel’s conclusion that the structure of the Consumer Financial Protection Bureau (“CFPB”) is unconstitutional.  But the en banc court reinstated the…

In an email to staff, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced on Wednesday, November 15, that he will be stepping down this month.  His departure was widely anticipated.  Because the CFPB is headed by a single director – as opposed to a 5-member commission – the agency’s director wields enormous power. Below we address some of the most frequently asked questions regarding Director Cordray’s resignation.
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Continue Reading CFPB Director Richard Cordray to Step Down

The Consumer Financial Protection Bureau (CFPB) marks its fifth birthday having made a substantial mark on the consumer financial services marketplace. To mark this event, we have compiled a retrospective of the CFPB’s first five years. The retrospective provides an overview of the CFPB’s actions in the realms of rulemaking, supervision, and enforcement. While it …

It is by now settled that federal agencies have broad authority to fill the gaps left by Congress. When an agency has been entrusted with administering an ambiguous statute, the agency’s interpretation need only be “reasonable” to be controlling in court.

The implied premise of so-called Chevron deference is that there will sometimes be more than one “reasonable” course that an agency might choose. The agency’s choice may well be driven by ideological concerns—the sorts of concerns that sometimes change with the winds of political change.

So what to do when an agency changes its mind?
Continue Reading The Risks of Changing One’s Mind