On November 6, 2015, the Consumer Financial Protection Bureau (CFPB) filed a response brief with the District Court for the District of Columbia, justifying its recalculation of a penalty assessed against PHH Corporation (PHH) on June 4, 2015, for allegedly engaging in a PMI reinsurance kickback scheme in violation of the Real Estate Settlement Procedures Act (RESPA). As a result of the reassessment, the penalty against PHH increased more than fifteen-fold to $109 million. In defense of its position, the CFPB recognized that, although there was uncertainty about the law, the stiff penalty is necessary to ensure that PHH did not “keep the fruits of its kickback scheme,” and thereby “encourage others to take advantage of areas of statutory uncertainty.”
This case—director Cordray’s first review of an administrative law judge’s decision—is being closely watched by the industry.
