CFPB

Senate Puts Pressure On Trump To Support CFPB PHH Ruling

The top Democrat on the Senate Banking Committee is imploring the Trump administration to support the Consumer Financial Protection Bureau’s ruling against PHH Corporation.

According to American Banker, PHH, a New Jersey-based mortgage lender and servicer, agreed to pay $31 million to consumers as part of a settlement with 49 state attorneys general. PHH was found to have violated federal law by allowing the unauthorized execution of foreclosure documents, including engaging in the act of “robo-signing,” which is improperly certifying and notarizing foreclosures.

“This settlement by a bipartisan group of 49 state attorneys general is a reminder that many Americans still haven’t recovered from the abuses caused by the financial crisis,” Senator Sherrod Brown, D-Ohio, said in a press release. “I hope the administration takes their side by vigorously pursuing the CFPB’s enforcement action against PHH and nominating a CFPB director with bipartisan support that will aggressively enforce consumer laws and stand tough against special interests and big banks.”

Back in 2014, an administrative law judge ruled that PHH’s reinsurance agreements violated the Real Estate Settlement Procedures Act’s ban on kickbacks for referrals. The company was ordered to pay more than $6 million.

However, former CFPB Director Richard Cordray overruled that decision the following year, ordering PHH to pay $109 million. PHH responded with a lawsuit, alleging that CFPB was an unconstitutional agency. That case is on appeal to an en banc panel of the U.S. Court of Appeals for the D.C. Circuit.

So far, the Justice Department under Attorney General Jeff Sessions has sided with PHH, stating that President Trump should have the authority to fire the head of the CFPB at will.

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