The CFPB’s newly-released Summer 2018 edition of Supervisory Highlights represents the CFPB’s first Supervisory Highlights report covering supervisory activities conducted under Acting Director Mick Mulvaney’s leadership.  The Bureau’s most recent prior Supervisory Highlights report was its Summer 2017 edition, which was issued in September 2017.

On October 10, 2018, from 12 p.m. to 1 p.m. ET, Ballard Spahr attorneys will hold a webinar, “Key Takeaways from the CFPB’s Summer 2018 Supervisory Highlights.”  The webinar registration form is available here.

Noticeably absent from the new report’s introduction and the Bureau’s press release about the report are statements touting the amount of restitution payments that resulted from supervisory resolutions or the amounts of consumer remediation or civil money penalties resulting from public enforcement actions connected to recent supervisory activities.  (The report does, however, include summaries of the terms of two consent orders entered into by the Bureau, including its settlement with Triton Management Group, Inc., a small-dollar lender, regarding the Bureau’s allegations that Triton had violated the Truth in Lending Act and the CFPA’s UDAAP prohibition by underdisclosing the finance charge on auto title pledges entered into with consumers.)

The report confirms that the Bureau’s supervisory activities have continued without significant change under its new leadership.  It includes the following information:

Automobile loan servicing.  The report indicates that in examinations of auto loan servicing activities, Bureau examiners focus primarily on whether servicers have engaged in unfair, deceptive, or abusive acts or practices prohibited by the CFPA.  It discusses instances observed by examiners in which servicers had sent billing statements to consumers who had experienced a total vehicle loss showing that the insurance proceeds had been applied to the loan so that the loan was paid ahead and the next payment was due months or years in the future.  The CFPB found the due dates in these statements to be inconsistent with the terms of the consumers’ notes which required the insurance proceeds to be applied to the loans as a one-time payment and any remaining balance to be collected according to the consumers’ regular payment schedules.  According to the CFPB, sending such statements was a deceptive practice.  The CFPB indicates that in response to the examination findings, servicers are sending billing statements that accurately reflect the account status after applying insurance proceeds.

The Bureau also found instances where servicers, due to incorrect account coding or the failure of their representatives to timely cancel the repossession, had repossessed vehicles after the repossession should have been cancelled because the consumer had entered into an extension agreement or made a payment.  This was found to be an unfair practice.  The CFPB indicates that in response to the examination findings, servicers are stopping the practice, reviewing the accounts of affected consumers, and removing or remediating all repossession-related fees.

Credit cards.  The report indicates that in examinations of the credit card account management operations of supervised entities, Bureau examiners typically assess advertising and marketing, account origination, account servicing, payments and periodic statements, dispute resolution, and the marketing, sale and servicing of add-on products.  The Bureau found instances where entities failed to properly re-evaluate credit card accounts for APR reductions in accordance with Regulation Z requirements where the APRs on the accounts had previously been increased. The report indicates that the issuers have undertaken, or developed plans to undertake, remedial and corrective actions in response to the examination findings.

Debt collection.  In examinations of larger participants, Bureau examiners found instances where debt collectors, before engaging in further collection activities as to consumers from whom they had received written debt validation disputes, had routinely failed to mail debt verifications to such consumers. The Bureau indicates that in response to the examination findings, the collectors are revising their debt validation procedures and practices to ensure that they obtain appropriate verifications when requested and mail them to consumers before engaging in further collection activities.

Mortgage servicing.  The report indicates that in examinations of servicers, Bureau examiners focus on the loss mitigation process and, in particular, on how servicers handle trial modifications where consumers are paying as agreed. In such examinations, the Bureau found unfair acts or practices relating to the conversion of trial modifications to permanent status and the initiation of foreclosures after consumers accepted loss mitigation offers.  In reviewing the practices of servicers with policies providing for permanent modifications of loans if consumers made four timely trial modification payments, the Bureau found that for nearly 300 consumers who successfully completed the trial modification, the servicers delayed processing the permanent modification for more than 30 days.  During these delays, consumers accrued interest and fees that would not have been accrued if the permanent modification had been processed.  The servicers did not remediate all of the affected consumers ,did not have policies or procedures for remediating consumers in such circumstances, and attributed the modification delays to insufficient staffing.  The Bureau indicates that in response to the examination findings, the servicers are fully remediating affected consumers and developing and implementing policies and procedures to timely convert trial modifications to permanent modifications where the consumers have met the trial modification conditions.

The Bureau also identified instances in which servicers, due to errors in their systems, had engaged in unfair acts or practices by charging consumers amounts not authorized by modification agreements or mortgage notes.  The Bureau indicates that in response to the examination findings, the servicers are remediating affected consumers (presumably by refunding or credit the unauthorized amounts) and correcting loan modification terms in their systems.

With regard to foreclosure practices, Bureau examiners found instances where mortgage servicers had approved borrowers for a loss mitigation option on a non-primary residence and, despite representing to borrowers that they would not initiate foreclosure if the borrower accepted loss mitigation offers in writing or by phone by a specified date, initiated foreclosures even if the borrowers had called or written to accept the loss mitigation offers by that date.  The Bureau identified this as a deceptive act or practice. The Bureau also found instances where borrowers who had submitted complete loss mitigation applications less than 37 days from a scheduled foreclosure sale date were sent a notice by their servicer indicating that their application was complete and stating that the servicer would notify the borrowers of their decision on the applications in writing within 30 days.  However, after sending these notices, the servicers conducted the scheduled foreclosure sales without making a decision on the borrowers’ loss mitigation application.  Interestingly, while the Bureau did not find that this conduct amounted to a “legal violation,” it did find that it could pose a risk of a deceptive practice.

Payday/title lending.  Bureau examiners identified instances of payday lenders engaging in deceptive acts or practices by representing in collection letters that “they will, or may have no choice but to, repossess consumers’ vehicles if the consumers fail to make payments or contact the entities.”  The CFPB observed that such representations were made “despite the fact that these entities did not have business relationships with any party to repossess vehicles and, as a general matter, did not repossess vehicles.”  The Bureau indicates that in response to the examination findings, these entities are ensuring that their collection letters do not contain deceptive content.  Bureau examiners also observed instances where lenders had used debit card numbers or Automated Clearing House (ACH) credentials that consumers had not validly authorized them to use to debit funds in connection with a defaulted single-payment or installment loan.  According to the Bureau, when lenders’ attempts to initiate electronic fund transfers (EFTs) using debit card numbers or ACH credentials that a borrower had identified on authorization forms executed in connection with the defaulted loan were unsuccessful, the lenders would then seek to collect the entire loan balance via EFTs using debit card numbers or ACH credentials that the borrower had supplied to the lenders for other purposes, such as when obtaining other loans or making one-time payments on other loans or the loan at issue.  The Bureau found this to be an unfair act or practice.  With regard to loans for which the consumer had entered into preauthorized EFTs to recur at substantially regular intervals, the Bureau found this conduct to also violate the Regulation E requirement that preauthorized EFTs from a consumer’s account be authorized by a writing signed or similarly authenticated by the consumer.  The Bureau indicates that in response to the examination findings, the lenders are ceasing the violations, remediating borrowers impacted by the invalid EFTs, and revising loan agreement templates and ACH authorization forms.

Small business lending. The Bureau states that in 2016 and 2017, it “began conducting supervision work to assess ECOA compliance in institutions’ small business lending product lines, focusing in particular on the risks of an ECOA violation in underwriting, pricing, and redlining.”  It also states that it “anticipates an ongoing dialogue with supervised institutions and other stakeholders as the Bureau moves forward with supervision work in small business lending.”  In the course of conducting ECOA small business lending reviews, Bureau examiners found instances where financial institutions had “effectively managed the risks of an ECOA violation in their small business lending programs,” with the examiners observing that “the board of directors and management maintained active oversight over the institutions’ compliance management system (CMS) framework.  Institutions developed and implemented comprehensive risk-focused policies and procedures for small business lending originations and actively addressed the risks of an ECOA violation by conducting periodic reviews of small business lending policies and procedures and by revising those policies and procedures as necessary.”  The Bureau adds that “[e]xaminations also observed that one or more institutions maintained a record of policy and procedure updates to ensure that they were kept current.”  With regard to self-monitoring, Bureau examiners found that institutions had “implemented small business lending monitoring programs and conducted semi-annual ECOA risk assessments that include assessments of small business lending.  In addition, one or more institutions actively monitored pricing-exception practices and volume through a committee.”  When the examinations included file reviews of manual underwriting overrides at one or more institutions, Bureau examiners “found that credit decisions made by the institutions were consistent with the requirements of ECOA, and thus the examinations did not find any violations of ECOA.”  The only negative findings made by Bureau examiners involved instances where institutions had collected and maintained (in useable form) only limited data on small business lending decisions.  The Bureau states that “[l]imited availability of data could impede an institution’s ability to monitor and test for the risks of ECOA violations through statistical analyses.”

Supervision program developments.  The report discusses the March 2018 mortgage servicing final rule and the May 2018 amendments to the TILA-RESPA integrated disclosure rule.  With regard to fair lending developments, it discusses recent HMDA-related developments and small business lending review procedures.  With regard to small business lending, the Bureau highlights that its reviews include a fair lending assessment of an institution’s compliance management system (CMS) related to small business lending and that CMS reviews include assessments of the institution’s board and management oversight, compliance program (policies and procedures, training, monitoring and/or audit, and complaint response), and service provider oversight.  The CFPB indicates that in some ECOA small business lending reviews, examiners may look at an institution’s fair lending risks and controls related to origination or pricing of small business lending products, including a geographic distribution analysis of small business loan applications, originations, loan officers, or marketing and outreach, in order to assess potential redlining risk.  It further indicates that such reviews may include statistical analysis of lending data in order to identify fair lending risks and appropriate areas of focus during the examination.  The Bureau states that “[n]otably, statistical analysis is only one factor taken into account by examination teams that review small business lending for ECOA compliance. Reviews typically include other methodologies to assess compliance, including policy and procedure reviews, interviews with management and staff, and reviews of individual loan files.”

In the CFPB’s RFI on its supervision program, one of the topics on which the CFPB sought comment is the usefulness of Supervisory Highlights to share findings and promote transparency.  The new report indicates that the Bureau “expects the publication of Supervisory Highlights will continue to aid Bureau-supervised entities in their efforts to comply with Federal consumer financial law.”  Presumably, this means that we will now again be seeing new editions of Supervisory Highlights on a regular basis.

 

A portion of the Treasury’s report entitled “A Financial System That Creates Economic Opportunities, Nonbank Financials, Fintech, and Innovation” focuses on the mortgage industry.  A detailed discussion of the Treasury’s mortgage-related findings and recommendations is available here.

We have previously blogged about the portion of the Treasury report that focuses on payments and have published a legal alert that discusses other portions of the report.

On September 20, 2018, from 12 p.m. to 1 p.m. ET, Ballard Spahr will conduct a webinar, “More Than Just Fintech: What Are the Important Takeaways for All Consumer Financial Services Providers from Treasury’s Sweeping Report?”  A link to register is available here.

 

 

The CFPB recently released a File Format Verification Tool for 2018 Home Mortgage Disclosure Act (HMDA) data. As we reported, in October 2015, the CFPB adopted significant changes to the HMDA rules that significantly expanded the amount of information that must be collected and reported. Calendar year 2018 is the first year in which the expanded data must be collected.

The Tool can be used by HMDA filers to test whether their HMDA data file meets the following formatting requirements: (1) whether the file is in the pipe-delimited format, (2) whether the file has the proper number of data fields, and (3) whether the file has data fields that are formatted as integers, when applicable. The Tool cannot be used to file HMDA data. The CFPB advises that there are no login requirements to use the Tool, the Tool will not log identifying information about users or the files that they test using the Tool, and no federal agency will receive or be able to view the files that users test using the Tool.

On July 31, 2018, the day that the National Flood Insurance Program was set to expire, the United States Senate voted 86 to 12 to reauthorize the program through November 30, 2018.  The action follows an earlier reauthorization of the program through the same date by a 336 to 52 vote in the United States House of Representatives.  President Trump signed the reauthorization, which simply kicks the can down the road to just after the mid-term elections, and falls far short of the more permanent resolution to the flood insurance program sought by the mortgage industry.

Yesterday, the three bills described below were passed by the House Financial Services Committee.  The first two bills were passed by unanimous votes and the third bill was passed by a vote of 34-22.

  • The “Bank Service Company Examination Coordination Act of 2017,” (H.R. 3626), which amends the Bank Service Company Act (BSCA) to enhance the ability of state and federal regulators to coordinate examinations and share information about third-party service providers to banks.  The BSCA authorizes a federal banking agency to supervise and regulate the activities of a bank service company with a “principal investor” supervised by the agency and, where a federal banking agency supervises a bank service company’s “principal shareholder or principal member, to authorize any other federal banking agency that supervises any other shareholder or member of the bank service company to examine the bank service company.  In addition, the BSCA authorizes a federal banking agency to supervise and regulate the activities of third-party service providers to a bank it supervises and to initiate enforcement actions against both the bank and its service provider for violations of law, including violations of Section 5 of the FTC Act which prohibits unfair or deceptive acts or practices.  The bill would amend the BSCA to:
    • authorize a state banking agency with supervisory authority over a bank service company’s principal investor to supervise and regulate the activities of the bank service company to the same extent as it can supervise and regulate the principal investor
    • authorize a federal banking agency with supervisory authority over a bank service company’s principal shareholder or principal member to authorize a state banking agency that supervises any other shareholder or member of the service company to examine the bank service company
    • when a state bank is a shareholder or member of a bank service company, require the federal banking agency authorized by the BSCA to supervise the bank service company to “provide reasonable and timely notice to, and consult with” the state banking agency with supervisory authority over the state bank and “to the fullest extent possible, coordinate and avoid duplication of examination activities, reporting requirements, and requests for information”
    • authorize a state banking agency with supervisory authority over a bank to supervise and regulate the activities of third-party service providers to the bank to the same extent as if such activities were performed by the bank itself
    • allow information obtained “pursuant to the regulation and supervision of service providers under [the BSCA] or applicable State law [to] be furnished by and accessible to Federal and State agencies to the same extent that supervisory information concerning depository institutions is authorized to be furnished to and required to be accessible by Federal and State agencies under [the FDIC Act] or State law, as applicable.”
  • The “Financial Technology Protection Act,” (H.R. 5036), would create an “Independent Financial Technology Task Force” to “conduct independent research on terrorist and illicit use of new financial technologies, including digital currencies” and “develop legislative and regulatory proposals to improve counter-terrorist and counter-illicit financing activities.”  The bill designates the Secretary of the Treasury as the head of the task force.  In addition to the Attorney General and other government officials, the members of the task force include “6 individuals appointed by the Secretary of the Treasury to represent the private sector (including the banking industry, nonprofit groups, and think tanks), with at least 1 of such individuals having experience in the Fintech industry.”  The bill would also establish a “FinTech Leadership in Innovation Program” to be funded through fines paid by individuals convicted of having been involved with “terrorist use of digital currencies.”  The bill would authorize the Secretary of the Treasury to make grants “for the development of tools and programs to detect terrorist and illicit use of digital currencies.”
  • The “Mortgage Fairness Act of 2017” (H.R. 2570), would amend the Truth in Lending Act to provide that the direct or indirect compensation paid by a consumer or creditor to a mortgage originator that is part of “points and fees” does not include “compensation taken into account in setting the interest rate and for which there is no separate charge to the consumer.”  It appears that the bill is intended to address situations in which a creditor charges a premium interest rate that the creditor will use to pay compensation to the mortgage originator.

The Consumer Financial Protection Bureau (CFPB) recently issued a statement regarding the partial exemption from Home Mortgage Disclosure Act (HMDA) reporting requirements for certain lower mortgage volume depository institution lenders that was adopted in the Economic Growth, Regulatory Relief, and Consumer Protection Act (Act).

As we reported previously, the Act exempts depository institutions and credit unions from the new reporting categories added by Dodd-Frank and the HMDA rule adopted by the CFPB with regard to (1) closed-end loans, if the institution or credit union originated fewer than 500 such loans in each of the preceding two calendar years, and (2) home equity lines of credit (HELOCs), if the institution or credit union originated fewer than 500 HELOCs in each of the preceding two calendar years. The HELOC change will not initially affect reporting because, for 2018 and 2019, the threshold to report HELOCs is 500 transactions in each of the preceding two calendar years under a temporary CFPB rule.

The Act’s partial exemption from reporting the new HMDA data does not apply if the institution received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent Community Reinvestment Act (CRA) examinations, or “substantial noncompliance in meeting community credit needs” on its most recent CRA examination.

The CFPB advises in its recent statement that it expects later this summer to provide further guidance on the applicability of the partial exemption to HMDA data collected in 2018. The CFPB also advises that the partial exemption will not affect the format of 2018 Loan Application Registers (LARs) and that:

  • LARs will be formatted according to the previously-released 2018 Filing Instructions Guide for HMDA Data Collected in 2018 (2018 FIG).
  • If an institution does not report information for a certain data field due to the partial exemption, the institution will enter an exemption code for the field specified in a revised 2018 FIG that the CFPB expects to release later this summer.
  • All LARs will be submitted to the same HMDA Platform.

The CFPB also notes that a beta version of the HMDA Platform for submission of data collected in 2018 will be available later this year for filers to test.

In Financial Institution Letter FIL-36-2018 and in OCC Bulletin 2018-19 the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, respectively, issued similar guidance to institutions.

In a SEC filing dated June 22, 2018, Zillow Group announced that it is no longer under investigation by the CFPB for RESPA and UDAAP compliance with regard to its co-marketing program.  Zillow Group had disclosed the existence of the investigation in May 2017.

According to the SEC filing, Zillow Group received a letter from the CFPB on June 22 stating that the CFPB “had completed its investigation, that it did not intend to take enforcement action, and that the Company was relieved from the document-retention obligations required by the Bureau’s investigation.”

The completion of the investigation leaves unanswered what concerns the CFPB may have had with Zillow Group’s co-marketing program, and whether the investigation was terminated because the concerns were addressed to the CFPB’s satisfaction or for other factors.

 

 

The U.S. Department of Housing and Urban Development (HUD) has issued an advance notice of proposed rulemaking (ANPR) seeking comment on whether its 2013 Disparate Impact Rule (Rule) should be revised in light of the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. 

On July 19, 2018, from 12:00 p.m. to 1:00 p.m. ET, Ballard Spahr attorneys will hold a webinar, “HUD’s Reconsideration of its Disparate Impact Rule: Background, Analysis and Potential Implications.”  Click here to register.

The ANPR provides an important opportunity for the mortgage industry and other interested parties to address whether the Rule reflects the limitations outlined by the Supreme Court in Inclusive Communities and other concerns with the Rule.  Comments on the ANPR must be filed by August 20, 2018.

The Rule provides that liability may be established under the Fair Housing Act (FHA) based on a practice’s discriminatory effect (i.e., disparate impact) even if the practice was not motivated by a discriminatory intent, and that a challenged practice may still be lawful if supported by a legally sufficient justification.  Under the Rule, a practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.  The Rule also addresses what constitutes a legally sufficient justification for a practice, and the burdens of proof of the parties in a case asserting that a practice has a discriminatory effect under the FHA.

While the Supreme Court held in Inclusive Communities that disparate impact claims may be brought under the FHA, it also set forth limitations on such claims that “are necessary to protect potential defendants against abusive disparate impact claims.”  In particular, the Supreme Court indicated that a disparate impact claim based upon a statistical disparity “must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity” and that a “robust causality requirement” ensures that a mere racial imbalance, standing alone, does not establish a prima facie case of disparate impact, thereby protecting defendants “from being held liable for racial disparities they did not create.”  Significantly, while Inclusive Communities held that liability may be established under the FHA based on disparate impact, the district court subsequently dismissed the disparate impact claim against the Texas Department of Housing and Community Affairs based on the limitations on such claims prescribed by the Supreme Court in its opinion.

In the ANPR, HUD notes that in response to a notice it published in the Federal Register in May 2017 inviting comments to assist HUD’s identification of outdated, ineffective, or excessively burdensome regulations, it received numerous comments both critical and supportive of the Rule and taking opposing positions on whether the Rule is inconsistent with Inclusive Communities.  HUD also notes that in a report issued in October 2017, the Treasury Department recommended that HUD reconsider applications of the Rule, particularly in the context of the insurance industry.  (We have previously reported on a challenge to the Rule by the American Insurance Association and National Association of Mutual Insurance Companies in D.C. federal district court.)

The ANPR contains a list of 6 questions of particular interest to HUD.   Issues addressed in the questions include the Rule’s: burden of proof standard and burden-shifting framework; the definition of “discriminatory effect” as it relates to the burden of proof for stating a prima facie case; and the causality standard for stating a prima facie case.

Although Inclusive Communities did not resolve the question of whether disparate impact claims are cognizable under the Equal Credit Opportunity Act (ECOA), HUD’s approach to the Rule could have significance for ECOA disparate impact claims.  Recent comments by CFPB Acting Director Mick Mulvaney that the CFPB plans to reexamine ECOA requirements in light of Inclusive Communities suggest that the CFPB might review references to the effects test in Regulation B (which implements the ECOA) and the Regulation B Commentary.  In doing so, the CFPB might consider not only whether such references should be eliminated but also, if they are retained, what safeguards should apply.  As a result, changes to the Rule made by the FHA could impact the CFPB’s approach to ECOA liability.

 

 

 

 

As expected, CFPB Acting Director Mick Mulvaney has signed an order directing that the Notice of Charges filed against PHH be dismissed and terminating the matter.  The order indicates, that in dismissing the matter, Mr. Mulvaney accepted the recommendation made jointly by the CFPB and PHH that the matter be dismissed.

The order recites that on January 31, 2018, the D.C. Circuit issued its en banc PHH decision reinstating the RESPA-related portions of the D.C. Circuit’s panel decision.  The panel had held that the plain language of RESPA permits captive mortgage re-insurance arrangements like the one at issue in the PHH case, if the mortgage re-insurers are paid no more than the reasonable value of the services they provide.  The order states that “it is now the law of this case that PHH did not violate RESPA if it charged no more than the reasonable market value for the reinsurance it required the mortgage insurers to purchase, even if the reinsurance was a quid pro quo for referrals.”

PHH issued a press release about the dismissal in which it commented that the CFPB’s order “is consistent with our long-held view that we complied with RESPA and other laws applicable to our former mortgage reinsurance activities in all respects.”

 

 

American Banker has reported that that CFPB is planning to dismiss its lawsuit against PHH.  According to the American Banker report, the CFPB and PHH have issued a joint statement in which the parties confirm that they have conferred and agreed to recommend the dismissal and request that Acting Director Mulvaney proceed to dismiss the CFPB’s administrative proceeding.

On January 31, 2018, the D.C. Circuit issued its en banc PHH decision reinstating the RESPA-related portions of the D.C. Circuit’s October 2016 panel decision.  The panel had held that the plain language of RESPA permits captive mortgage re-insurance arrangements like the one at issue in the PHH case, if the mortgage re-insurers are paid no more than the reasonable value of the services they provide.  However, disagreeing with the panel decision, the en banc court rejected PHH’s challenge to the CFPB’s constitutionality based on its single-director-removable-only-for-cause structure.  Neither PHH Corporation nor the CFPB filed a petition for certiorari asking the U.S. Supreme Court to review the en banc decision.

For the first time in 2015, in prosecuting the case against PHH, the CFPB announced a new interpretation of RESPA under which captive mortgage reinsurance arrangements were prohibited.  The panel rejected this interpretation on the ground that the statute unambiguously allows the kinds of payments that the CFPB’s 2015 interpretation prohibited.  The panel remanded the case to the CFPB to determine whether PHH complied with RESPA under the longstanding interpretation previously articulated by HUD.   The en banc court’s reinstatement of that aspect of the panel decision led it to order that the case be remanded to the CFPB for further proceedings.

Although the D.C. Circuit panel had agreed with PHH that the RESPA three-year statute of limitations applies to administrative proceedings, it left undecided another statute of limitations issue for the CFPB to consider on remand.  The panel stated:  “We do not here decide whether each alleged above-reasonable-market value payment from the mortgage insurer to the reinsurer triggers a new three-year statute of limitations for that payment.  We leave that question for the CFPB on remand and any future court proceedings.”

Since the en banc court reinstated the panel’s decision “insofar as it related to the interpretation of RESPA and its application to PHH,” the issue of when the RESPA three-year statute of limitations is triggered, which is of great significance to the mortgage industry, might have been addressed on remand.  The CFPB’s dismissal of the administrative proceeding means the CFPB will not have an opportunity to rule on that issue in this case.

A determination on remand as to whether PHH complied with RESPA under the longstanding interpretation previously articulated by HUD would have required the CFPB to consider whether the mortgage re-insurers were paid more than reasonable market value for the services they provided.  The dismissal of the administrative proceeding also means the CFPB will not have an opportunity to rule on how reasonable market value is determined in mortgage re-insurance arrangements.