CFPB and amici file briefs in support of Bureau’s constitutionality

cfpb files brief phhOn March 31, the CFPB filed its opening brief in the en banc rehearing of the PHH case before the DC Circuit. Also filing amicus briefs in support of the CFPB were consumer advocacy groups, Democratic members of Congress, and legal scholars.

The CFPB’s primary argument focused on whether the CFPB’s structure as an independent agency led by a single-director-removable-only-for-cause is constitutional. According to the CFPB, determining the constitutionality of the CFPB’s structure depends solely upon whether the for-cause removal restrictions “are of such a nature that they impede the President’s ability to perform his constitutional duty.”

Santander settles unfair subprime auto loan case for $26 million

Santander subprime auto loan settlementSantander has agreed to pay $26 million to settle allegations that the bank issued high-interest loans to thousands of consumers who could not afford to repay them. The settlement was announced on March 29, 2017, by Massachusetts Attorney General Maura Healey and Delaware Attorney General Matthew Denn.

According to the press release from the State of Delaware, an investigation into the financing and securitization of Santander’s subprime auto loans revealed that the bank funded loans without having a reasonable basis to believe that the borrowers could afford them. According to the Delaware consent order, Santander predicted that “more than half” of the subprime loans acquired from certain Delaware auto dealers would default.

PHH v. CFPB – everything you need to know

PHH case summaryWhen the Consumer Financial Protection Bureau (CFPB) filed its notice of charges against New Jersey-based mortgage lender, PHH Corp. in January 2014, there were few observers outside of the mortgage and real estate industries who paid much attention. Now, more than three years later, the legal battle has evolved into a constitutional challenge that the CFPB has suggested may be “the most important separation-of-powers case in a generation.” PHH’s case against the controversial federal consumer watchdog has captured the attention of not only the financial services industry, but lawmakers, state attorneys general, legal scholars, consumer advocacy groups and many consumers themselves.

Wells Fargo earns failing lending rating based on discriminatory credit practices

Wells Fargo ratingOn Tuesday, Wells Fargo disclosed that the Office of the Comptroller of the Currency (OCC) downgraded the bank’s latest Community Reinvestment Act Performance Evaluation rating to “needs to improve,” the second-lowest of four possible ratings.

Enacted by Congress in 1977, the Community Reinvestment Act requires banks to make loans in the communities where they do business and is intended to promote lending in low- and moderate-income neighborhoods.