On Wednesday, January 31, the Court of Appeals for the District of Columbia Circuit upheld the constitutionality of the Consumer Financial Protection Bureau (CFPB) ending a two-year debate over the CFPB’s power structure, which stemmed from an ongoing lawsuit between the Bureau and New Jersey-based mortgage lender PHH Mortgage Corporation over the lender’s captive reinsurance practices. The much-watched case stemmed from a 2015 decision in which then-CFPB director Richard Cordray decided to fine PHH to the tune of $109 million over PHH’s practice of taking reinsurance fees as kickbacks, resulting in higher insurance premiums for paying consumers. PHH sought to overturn the fine by challenging the authority of CFPB and its leadership in court, leading to several decisions that finally culminated in this week’s ruling. Although CFPB won the battle surrounding its constitutionality, it lost the war when it came to the $109 million fine: The court vacated it, saying that Cordray m…
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