As Dodd-Frank Fight Continues, the Resistance Scores Some Victories

In 2014 a New Jersey mortgage lender called PHH found itself in trouble with the U.S. Consumer Financial Protection Bureau. An administrative judge at the agency ordered the company to disgorge $6.4 million in ill-gotten gains from an insurance-kickback scheme. Later, the CFPB’s director, Richard Cordray, decided that didn’t go far enough. He raised the penalty 17-fold, to $109 million.

Denying any wrongdoing, PHH took its case to the U.S. Court of Appeals for the D.C. Circuit. The result could disrupt the very structure of the CFPB. No decision has yet been made, but in oral arguments on April 12, judges hearing the case raised questions far more consequential than how much, if anything, PHH ought to pay. Although it’s risky to predict a legal result based on comments from the bench, the judges sounded wary of the powers that have been given to the CFPB director.