When Consumer Financial Protection Bureau Director Richard Cordray increased a $6 million fine against mortgage lender PHH by $103 million last year, PHH challenged the decision. Now, the United States Court of Appeals for the District of Columbia Circuit has declared the CFPB leadership structure unconstitutional and vacated the $103 million fine against PHH, reports HousingWire staffer Ben Lane.
The fine was levied against PHH for allegedly illegally referring consumers to mortgage insurers in exchange for kickbacks. In June 2015, Cordray exercised his authority to layer an additional $103 million fine on top of the original $6.4 million penalty from Administrative Law Judge Cameron Elliot.
In a unanimous decision of the three justices of the United States Court of Appeals for the District of Columbia Circuit, the court ruled that the CFPB’s current structure allows the director to wield far too much power, more than any other agency in the government.
“Because the Director alone heads the agency without Presidential supervision, and in light of the CFPB’s broad authority over the U.S. economy, the Director enjoys significantly more unilateral power than any single member of any other independent agency,” the court writes.