Consumer Financial Protection Bureau Acting Director Mick Mulvaney announced today that the bureau will drop its case against mortgage lender PHH Corp. The closely watched case arose in 2015 after then-CFPB Director Richard Cordray overruled an administrative law judge’s recommendation for a $6.5 million fine against mortgage lender PHH for allegedly requiring unlawful kickbacks from mortgage insurers in violation of the Real Estate Settlement Procedures Act. Cordray demanded that PHH pay 18 times more — or $109 million — for each time it received a payment deemed improper by the bureau on or after July 21, 2008.
PHH appealed the fine and called into question the constitutionality of the bureau’s leadership structure of a single powerful director who can be removed by the president only “for cause,” not at will. A federal appeals court earlier this year threw out the fine but upheld the constitutionality of the CFPB’s leadership structure. PHH declined to appeal the case to the Supreme Court. Earlier this week, a joint statement was issued by PHH and CFPB attorneys recommending that Mulvaney dismiss the case.