District Court Rebuffs CFPB’s RESPA “Continuing Violations” Theory

CFPB

On June 6, 2017, a federal district court in Menichino v. CitiBank[1] rejected an interpretation of the RESPA Section 8 statute of limitations espoused by the CFPB in captive reinsurance cases, instead concluding that RESPA’s limitations period runs from the date of the occurrence of the claimed violation, which is the date of the loan closing.  The Menichino decision is a welcome development because although the CFPB has asserted its “continuing violations” theory in the closely-watched PHH case, that issue is not among those taken up by the D.C. Circuit Court of Appeals as part of its en banc review in PHH.

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Utilizing California Civil Code Section 1542 Waivers in Class Action Settlement Agreements: Helpful or Harmful?

Class Action

A significant concern for any lawyer negotiating the settlement of a class action in California state court is crafting a settlement agreement that the court will ultimately approve. Under California law, a judge must approve of any proposed settlement agreement disposing of a class action.[i]  A judge will only approve a class action settlement that he/she determines is fair, adequate, and reasonable.[ii]  Courts have broad discretion in evaluating the fairness, adequacy, and reasonableness of class settlement agreements. [iii]

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Fleeting Glimpse of RESPA Issues in PHH Argument as Court Focuses on Bureau Constitutionality

Although the RESPA issues were addressed in the briefs filed by the parties in the PHH case, at oral argument this week the parties and the en banc D.C. Circuit focused heavily on whether the president’s authority is unconstitutionally limited by the broad powers of the Consumer Financial Protection Bureau (“Bureau”) and the fact that the president may remove the Bureau’s single director only “for cause.” PHH is the first contested Bureau enforcement action to go through an administrative trial, appeal within the Bureau, and now full federal court review.  Members of the real estate settlement services industry have spent the past two years hoping that the D.C. Circuit in PHH will reject the Bureau’s controversial RESPA interpretations to confirm that the anti-kickback provision in Section 8(a) of RESPA is subject to a statutory exemption in Section 8(c)(2).  Yet RESPA was barely mentioned during this week’s oral argument, with the judges directing most of their questions to the constitutionality question.  Nevertheless, sometimes that which is unsaid is significant.

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U.S. Supreme Court Says: We Mean It--You Can’t Single Out Arbitration Agreements for Disfavored Treatment

Supreme Court

On Monday, May 15, 2017, the Supreme Court issued its latest reminder to state and lower federal courts that they must treat arbitration agreements as equally valid as all other contracts.  In Kindred Nursing Centers Limited Partnership v. Clark et al., 581 U.S. ___ (2017), the Court confronted a rule imposed by the Kentucky Supreme Court that barred contracts conferring broad “powers of attorney” — contracts that authorize individuals to act on behalf of, and legally bind, others—from entering into an arbitration agreement, on the principal’s behalf, absent a “clear statement” of authority that allows the agent to waive the principal’s right to a jury trial.

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CFPB Settlements: It’s Not Over Until It’s Over

CFPB settlements

On April 26, 2017, the Consumer Financial Protection Bureau (“CFPB”) broke new ground by imposing a fine – in excess of a million dollars – against a consumer financial services company for allegedly violating the terms of its prior settlement with the CFPB.

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