CFPB Declines to Modify or Set Aside Civil Investigative Demand

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The CFPB has commenced an investigation to determine whether the practice of ceding premiums from private mortgage insurance companies to captive reinsurance subsidiaries of certain mortgage lenders violates Section 8 of the Real Estate Settlement Procedures Act, or RESPA.  PHH Corporation publicly disclosed that it is a subject of the investigation.

The CFPB served PHH with a civil investigative demand, or CID, and PHH objected to the CID as being overbroad. The CFPB denied PHH’s petition to modify or set aside the CID.  The CFPB noted:

  • According to the CFPB, the CID was not a “fishing expedition.”  Though PHH repeatedly asserted that the CID was overbroad or unduly burdensome, the CFPB stated PHH offered little or no detail to make the kind of showing required to substantiate these claims.
  • PHH objected that the CID sought documents, items, and information extending outside the applicable limitations period. According to the CFPB, the issue is not whether all such information is itself actionable; rather, the issue is whether such information is relevant to conduct for which liability can be lawfully imposed.

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