On April 20, 2017, Richard Cordray, the director of the Consumer Financial Protection Bureau (“CFPB”), announced that the CFPB was filing suit against the mortgage servicer Ocwen Financial Corporation (“Ocwen”). Citing statements by Ocwen’s own officials and employees, the complaint alleges that Ocwen has engaged in illegal servicing and foreclosure activities. The CFPB seeks an order directing Ocwen, one of America’s largest non-bank mortgage servicers, to “follow mortgage servicing law” and grant consumers monetary relief.”
The CFPB’s action against Ocwen comes at a time when the future of the CFPB is unclear. In October 2016, a three-judge panel of the Court of Appeals for the D.C. Circuit ruled that the organization of the CFPB concentrates too much power in the hands of a single director and thus violates the Constitution. The CFPB has sought review by a full panel of judges and thus remains free to continue in its present form for the time being. However, targets of its enforcement actions, including Ocwen, are arguing that CFBP’s structure is unconstitutional to challenge the CFPB’s actions against them. Furthermore, the Trump Administration filed a brief in March 2017 in support of the three-judge panel’s decision. The brief reflects the Trump Administration’s and Republican-controlled Legislature’s goal of clawing back the rules and regulations passed after the enactment of Dodd-Frank in 2010. Ocwen has also cited the Government’s reversal in position in its own challenge to the CFPB’s action against it.
The Ocwen complaint demonstrates that the CFPB will continue to proceed with its enforcement mission despite the challenges it currently faces from all three branches of the federal government. The legal and political forces surrounding the CFPB make it difficult to anticipate when changes to the landscape of banking and lending law will come and what those changes might look like. The attorneys in Saalfeld Griggs’ Financial Services group continue to track and monitor developments in these areas of the law. Please contact a member of our Financial Services group if you have questions about the CFPB or this article.
Joshua Feil is an associate in the Litigation and Creditors’ Rights & Bankruptcy practice groups. The information in this article is not intended to provide legal advice. For professional consultation, please contact Erich Paetsch or Joshua Feil at Saalfeld Griggs PC. 503.399.1070. [email protected] © 2017 Saalfeld Griggs PC