Litigation Archives - Alexson Law

PHH Corp. et. al. vs CFPB

Harriet B. Alexson, ESQ — Mon, 21 Nov 2016 19:14:28 +0000

My recent presentation for Lambda Alpha.

We discussed the PHH Corp. et. al. vs CFPB case which was decided Oct. 11,
2016 by the US court of Appeals for the DC Circuit. PHH argued that the authorizing legislation for the CFPB creates an unconstitutional independent agency officer not subject to review by any branch of government.

The reason: The CFPB is run by a single director rather than a multi-member commission. The director is appointed for a term of years and can only be removed for cause. Since funding comes from the Federal Reserve, Congress does not have budgetary power. PHH also raised the issue of statutory interpretation as there is no statutory definition of the anti-kickback provisions of RESPA.

Also, the Dodd-Frank provisions on unfair and deceptive practices are not adequately defined. The CFPB has appealed this case. We also had a discussion about the Dodd-Frank provisions that are applicable to commercial real estate loan and pools.

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Husky Int’l Electronics v. Ritz

Harriet B. Alexson, ESQ — Wed, 24 Aug 2016 01:49:42 +0000

Husky Int’l Electronics v. Ritz (US Supreme Court 2016). This case is about Bankruptcy Code 11 U.S.C. 523 which defines which debts are non-dischargeable in bankruptcy. Most common examples are a debt incurred by way of fraud or false representation, fraud in a fiduciary capacity, domestic support obligations or willful or malicious injury. The opinion focused on actual fraud under 523 (a) (2) (A). The court held that actual fraud does not require a false representation but can include fraudulent conveyance schemes. The case was remanded back to the bankruptcy court to determine the facts. Some commentators have suggested that this holding will encourage more filings by creditors as it is an “easier” standard than that proposed in the dissent which would require that the debt result from the fraud at the inception of the transaction.

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The Credit Risk Retention Rule

Harriet B. Alexson, ESQ — Wed, 24 Aug 2016 01:48:44 +0000

The Credit Risk Retention Rule (see OCC Bulletin 2015-8) (the “Rule”) imposes these requirements on firms, that package financial securities, into asset-backed securities by organizing a securitization transaction. The final rule defines qualified residential mortgages (“QRM”) to include all loans that meet the qualified mortgage definition defined in Section 129c of the Truth and Lending Act (15 USC 1639 c) and issued by the Consumer Financial Protection Bureau (“CFPB”). Securitization of QRM’s are exempt from risk retention. The final rule requires the sponsors to retain 5% of the credit risk. The final rule includes a reduced risk retention requirement for asset-backed securities collateralized by commercial loans, commercial real estate loans or auto loans that meet certain underwriting standards.

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