PHH Corporation v. CFPB

PHH Corporation, a mortgage originator and servicer, brought this case against the Consumer Financial Protection Bureau (CFPB) challenging the CFPB’s order imposing penalties on PHH for violating the anti-kickback provisions of the Real Estate Settlement Procedures Act (RESPA) by referring borrowers to mortgage insurance companies that bought reinsurance from PHH’s captive insurance company. A panel of the D.C. Circuit ruled that the CFPB had misinterpreted RESPA, but also that the statute creating the CFPB violates separation-of-powers principles by providing that the CFPB’s director can be removed by the President only for cause. The full D.C. Circuit granted rehearing en banc. Public Citizen, together with the Consumer Federation of America, Consumers Union, the National Association of Consumer Advocates, the National Consumer Law Center, and Tzedek DC, filed a brief as amici curiae explaining that Congress may protect the independence of regulatory agencies by protecting their heads against at-will removal by the President, and that the panel’s opinion had distorted separation-of-powers principles in holding that only multi-member commissions can receive such protection.