On June 4, 2015, the Consumer Financial Protection Bureau issued Director Richard Cordray’s final decision in the CFPB’s enforcement action against PHH Corp. The decision is the CFPB's first ruling in a contested administrative proceeding and sheds light on how the agency, at least under the leadership of Director Cordray, will approach these matters. Most strikingly, Director Cordray overturned several key rulings by the administrative law judge, resulting in a decision requiring PHH to pay over $109 million in disgorgement, nearly 17 times as much as the $6.4 million recommended by the administrative law judge.
Director Cordray’s decision sets forth the CFPB's view on numerous Real Estate Settlement Procedures Act interpretation issues: the statute of limitations applicable to administrative enforcement actions; when a RESPA claim accrues; whether the continuing violation doctrine applies; what constitutes a referral; and, most importantly, what conduct Section 8(c)(2) of RESPA protects.
The decision also establishes precedent for how the CFPB might handle future administrative proceedings, including what standard of review applies, how to calculate disgorgement and the propriety of civil money penalties. Below, we set forth the background of the case, explain the CFPB’s administrative process and discuss the more important substantive and procedural aspects of the decision.
The CFPB brought an enforcement action against PHH under RESPA, which prohibits the payment of kickbacks in exchange for referrals in the real estate market. The CFPB alleged that PHH, a mortgage lender, received kickbacks from mortgage insurers, to whom PHH referred business. The CFPB alleged that those kickbacks took the form of reinsurance premiums that the mortgage insurers paid to PHH’s reinsurance subsidiary, Atrium, for mortgage reinsurance. The CFPB’s case rested on evidence that showed that PHH referred substantially more business to mortgage insurers who purchased reinsurance from Atrium than those who did not, and evidence that the reinsurance did not actually transfer substantial risk to Atrium commensurate with the premiums it was paid.
Rather than file suit in federal district court, as it has in almost all of its other contested enforcement actions, the CFPB instead chose to file an administrative claim before an administrative law judge. Following trial, the administrative law judge ruled in favor of the CFPB, finding that many of the mortgage reinsurance premiums received by PHH were prohibited kickbacks that were paid in exchange for PHH’s referral of mortgage insurance business. Based on rulings that the RESPA violations at issue occurred when the underlying loans closed, as opposed to when the reinsurance premiums were paid to Atrium, and that disgorgement was appropriately based on the net premiums received by PHH (after deducting the claims it paid out on the reinsurance), the administrative law judge recommended that PHH be ordered to disgorge more than $6.4 million. Both parties appealed different aspects of the administrative law judge's decision to Director Cordray, who issued the decision.
Substantive RESPA Issues
The PHH decision is notable for the number of statutory interpretation issues it addresses. Depending on whether or not the court of appeals affords the CFPB's interpretations deference (an issue discussed below), these interpretations may have wide-ranging impact on the real estate industry and future agency enforcement actions.
No Statute of Limitations Applies to RESPA Administrative Actions
Director Cordray agreed with the administrative law judge that although RESPA provides a three-year limitations period for enforcement actions brought in federal court, no statute of limitations applies to administrative enforcement actions brought by the CFPB. PHH at 10-12. Like the administrative law judge, Director Cordray relied on the U.S. Supreme Court’s decision in BP America Production Co. v. Burton, 549 U.S. 84 (2006), in reaching this decision.
In BP, the Supreme Court held that the term “action” as used in a statute of limitations provision applies to “judicial, not administrative proceedings.” Id. at 91. Applying the same reasoning to RESPA’s statute of limitations provision, Director Cordray reasoned that it too only applies to actions brought in federal court. Recognizing that the U.S. Department of Housing and Urban Development, which enforced RESPA prior to the CFPB’s creation, did not have administrative enforcement authority and that the three-year limitations provision therefore applied to HUD’s enforcement powers until the creation of the CFPB, Director Cordray held that the CFPB cannot pursue claims that arose more than three years before the CFPB assumed enforcement authority on July 21, 2011, because such claims would have been barred as of that date and could not be revived.
On its face, Director Cordray’s determination with respect to the inapplicability of the statute of limitations appears to comport to Supreme Court precedent. The result, however, is rather extraordinary in light of the fact that CFPB has prosecutorial discretion to elect its forum and can obtain the very same remedies, including civil money penalties, in either federal district court or administratively. If the court of appeals upholds this aspect of the decision, the CFPB could be free to pursue any RESPA claims that have accrued since July 21, 2008, and seek substantial penalties for any such violations that occurred after July 21, 2011, when the Dodd-Frank Act’s civil penalty provisions became effective, without regard to any statute of limitations.
RESPA Claims Accrue Upon Payment or Receipt of a Kickback
The critical aspect of Director Cordray’s decision that resulted in the substantial increase in the dollar value of the disgorgement that PHH was ordered to pay was his determination that the RESPA violations at issue accrued when the mortgage insurers paid PHH for the reinsurance, and not at the time the underlying mortgage loans closed. To date, the leading authority on this question was the Fifth Circuit’s decision in Snow v. First American Title, 332 F.3d 356 (5th Cir. 2003).
Snow held that the RESPA violation in that case occurred at the time of loan closing. Id. at 358-59. Director Cordray distinguished Snow on the grounds that the payments there at issue for title insurance were all made at the time of closing, noting that Snow itself recognized that where “purchasers pay for a settlement service … at a time other than the closing, … ‘the date of the occurrence of the violation’ presumably would be the date of payment, not the unrelated closing.” PHH at 23 (quoting Snow, 332 F.3d at 359 n.3). In PHH, the borrowers paid the underlying mortgage insurance premium, which in turn led to the reinsurance premium/kickback payment to Atrium, each month with their mortgage payment. “Because of this crucial factual distinction,” PHH concluded, “Snow’s reasoning does not apply here.” PHH at 23.
Relying on the statutory language rendering it a violation to give or accept a thing of value for the referral of settlement services, Director Cordray focused on the payment of reinsurance premiums to Atrium as the violative conduct, as opposed to the consumers’ payments of the underlying mortgage insurance premium. In this way, too, Director Cordray differed from Snow, which held that it was the consumer’s payment for title insurance — and not the subsequent payment of the title insurance company’s commission to its agent — that constituted the violation because the title agent earned the commission at the time of the consumer’s payment. Snow, 332 F.3d at 359 (relying on the definition of “thing of value” as including “credits representing monies that may be paid at a future date”). After discussing the fact that the consumers in PHH paid for their mortgage insurance in installments over time, Director Cordray then concluded that each time the mortgage insurers made a payment to PHH they violated the statute, without ever acknowledging this difference with Snow. PHH at 23.
It is this holding that resulted in most of the substantial increase in the disgorgement amount ordered by Director Cordray. The administrative law judge had held that the RESPA violations occurred at the time of the closing of the underlying loans, and thus limited disgorgement to those loans that had closed after July 21, 2008, three years prior to the CFPB’s gaining its authority to bring administrative enforcement actions. Director Cordray instead included all payments made by the mortgage insurers to Atrium after July 21, 2008, regardless of when the underlying loans closed. This substantially expanded the number of payments subject to disgorgement.
Continuing Violation Doctrine Does Not Apply to RESPA
Director Cordray did reject one key argument advanced by enforcement counsel: that the continuing violation doctrine applied and allowed for disgorgement over the entire 18-year course of PHH’s conduct, going all the way back to 1995. Recognizing that the continuing violation doctrine typically applies “‘in cases involving a pattern or policy of employment discrimination in which there has been no single act of discrimination sufficient to trigger the running of the limitations period,’” PHH at 26 (quoting Velazquez v. Chardon, 736 F.2d 831, 833 (1st Cir. 1984)), Director Cordray held that because “violations of Section 8 of RESPA are individually actionable acts,” the continuing violation doctrine does not apply. Id. at 26-27. A contrary ruling could have exposed PHH to even greater liability.
Indirect Referrals Are Actionable Under RESPA
PHH argued that providing incentives to its correspondent lenders to select mortgage insurers that had entered into captive reinsurance agreements with Atrium did not constitute “referrals” under RESPA because that conduct influenced correspondent lenders as opposed to borrowers. Director Cordray summarily rejected this argument, finding that “[a] referral is an action directed to a person that affects the selection of a mortgage service paid for by any person.” PHH at 14 (citing 12 C.F.R. Section 1024.14(f)).
Director Cordray's citation to the regulatory provision defining referral, however, is not accurate. The regulation does not state that a referral is an action that affects the selection of a settlement service paid for by any person. Rather, the regulation provides that a referral is an action that affects any person’s selection of a settlement service provider where “such person” will pay for the settlement service. 12 C.F.R. Section 1024.14(f). That is, the plain language of the regulation requires that the “any person” being influenced be the same person who will pay for the settlement service for the influence to constitute a referral. Without acknowledging this point, Director Cordray does note that PHH’s conduct “indirect[ly] influence[d]” borrowers (who paid for the mortgage insurance) and thus constituted a referral.
RESPA Section 8(c)(2) Does Not Shield Market-Value Payments
Perhaps the most far-reaching holding of PHH is Director Cordray’s interpretation of Section 8(c)(2) of RESPA. That section provides that “[n]othing in [Section 8] shall be construed as prohibiting … the payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or services actually performed.” 12 U.S.C. Section 2607(c)(2).
The administrative law judge, relying on a 1997 HUD interpretive letter, concluded that Section 8(c)(2) provides an affirmative defense to Section 8(a) claims (i.e., if the reinsurance was actually provided and the payments for that reinsurance did not exceed its value, then there would be no violation, even if the arrangement would otherwise violate Section 8(a)). PHH at 14-15 (describing the administrative law judge's ruling). The 1997 HUD letter relied upon by the administrative law judge addressed captive reinsurance arrangements such as Atrium's. The letter provided that “so long as payments for reinsurance under captive reinsurance arrangements are solely ‘payments for goods or facilities actually furnished or for services actually performed,’ these arrangements are permissible under RESPA.” PHH at 18 (quoting HUD letter at 1). The letter went on to note that:
If the lender or its reinsurance affiliate is merely given a thing of value by the primary insurer in return for this referral, in monies or in the opportunity to participate in a money-making program, then Section 8 would be violated. If, however, the lender’s reinsurance affiliate actually performs reinsurance services and compensation from the primary insurer is bona fide and does not exceed the value of the reinsurance, then such payments would be permissible under subsection 8(c). PHH at 18 (quoting HUD Letter at 3) (emphasis added).
Relying on the letter, the administrative law judge focused his analysis on whether the reinsurance resulted in a real transfer of risk and whether the price of the reinsurance was commensurate with the risk transferred. PHH at 15.
Director Cordray rejected this approach. Instead, he held that Section 8(c)(2) requires not only that any payments constitute reasonable compensation for “services actually performed,” but also that the payments be “bona fide,” which he interpreted to mean that they not be “tied in any way to a referral of business.” PHH at 17. Thus, payments made at market value for services rendered are not insulated from Section 8(a) liability if those services and the resulting payments are the result of the referral of settlement service business. Relying in part on the regulatory definition of “thing of value” — which includes “the opportunity to participate in a money-making program,” 12 C.F.R. Section 1024.14(d); see also PHH at 18 (quoting HUD letter at 3) — Director Cordray held that providing someone with business in exchange for referrals, even if the business is paid for at market rates, violates Section 8(a) and is not exempted by Section 8(c)(2).
This holding is consistent with the position the CFPB took in the consent order it issued against Lighthouse Title. There, the CFPB stated that “[e]ntering a contract is a ‘thing of value’ within the meaning of Section 8, even if the fees paid under that contract are fair market value for the goods or services provided. Entering a contract with the agreement or understanding that in exchange the counterparty will refer settlement services related to federally related mortgage loans violates Section 8(a).” Lighthouse Consent Order, ¶¶ 20-21 (emphasis added).
In Lighthouse, the respondent had entered marketing services agreements with various counterparties. The CFPB found that the respondent had entered into those agreements with the understanding that in return the counterparties would refer closings and title insurance business to it. Id. ¶ 12. While the CFPB also found that the payments under the marketing services agreements were not based on fair market value, it went further and noted that merely entering into the contracts, with the understanding that referrals would follow, violated the law.
The message from the CFPB is now clear: No matter what the amount of payments made for services rendered, any quid pro quo agreement in which one party receives business as a result of referring settlement service business to another party is, in the CFPB’s view, a violation of Section 8(a). Unless the PHH decision is reversed on appeal, this holding could have far-reaching consequences in the real estate industry, where the common understanding has been that Section 8(c)(2) provides substantially broader safe harbor from RESPA claims so long as any payments made constitute reasonable compensation for services provided. This may be the aspect of Director Cordray's decision most vulnerable on appeal, particularly if the court of appeals determines, as discussed further below, that the rule of lenity applies, and that the CFPB is therefore not entitled to deference in its interpretation of the statute.
CFPB Administrative Process
Administrative Process Provides for an Expedited Decision
The PHH matter was the CFPB’s first contested administrative proceeding. As such, it presents the first opportunity to see how the CFPB intends to apply its administrative rules. Under the Dodd-Frank Act, the CFPB has a rather unique ability to choose whether to bring claims in federal district court or before an administrative law judge, and can get the very same remedies regardless of which forum it chooses. In light of this, the CFPB’s Rules of Practice for Adjudication Proceedings, which govern matters brought administratively, were consciously crafted to create a litigation path that is different from that otherwise available to the CFPB in federal court. Most markedly, the CFPB’s rules limit discovery and impose strict time limitations on cases filed before an administrative law judge, requiring a recommended decision no later than 300 days after enforcement counsel first files its notice of charges. 12 C.F.R. subsection 1081.206-10; 1081.400. In the PHH case, the CFPB filed its notice of charges on Jan. 29, 2014. Exactly 300 days later, on Nov. 25, 2014, the administrative law judge issued his recommended decision in the matter. If the case had been brought in federal district court, it is almost certain that no decision would have been issued by that date — in all likelihood, the parties would still have been engaged in discovery at that time.
CFPB Missed a Key Deadline
Interestingly, Director Cordray seems not to have complied with another related deadline in the CFPB’s rules. Following the administrative law judge's recommended decision, the rules provide that the CFPB is to notify the parties that the case has been submitted for final decision “at the expiration of the time permitted for filing of reply briefs.” 12 C.F.R. Section 1081.405(d). Director Cordray must then issue a final decision within 90 days of the notice. Id. This 90-day provision is, in fact, required by Dodd-Frank itself. 12 U.S.C. Section 5563(b)(3).
In PHH, although the parties’ reply briefs were filed on Feb. 20, 2015, as required by Director Cordray’s scheduling order, the director’s decision was not issued for 104 days after that date. The docket does not indicate whether or when the CFPB issued the required notice to the parties that the case had been submitted for decision. Clearly, however, either that notice was delayed or Director Cordray’s decision fell outside the 90-day window. The two-week delay displays a surprising willingness to depart from the strict timelines set forth in the statute and rules. If nothing else, it sets a disappointing precedent for future administrative law judge's compliance with the 300-day rule cited above — for if Director Cordray is free to disregard the deadlines that are found in Dodd-Frank, what is to stop administrative law judges from disregarding the rules-based 300-day limit?
Director Cordray Applied De Novo Review and a Preponderance of the Evidence Standard
Director Cordray’s decision contains some important, if unsurprising, procedural rulings that establish precedent that presumably will be applied in future administrative actions. First, he determined that his review as to both facts and law was de novo, such that no deference was owed to the administrative law judge's findings of fact or conclusions of law. PHH at 9. Director Cordray based this determination on the provision in the CFPB’s rules that provides that the director shall “exercise all powers which he or she could have exercised if he or she had made the recommended decision.” 12 C.F.R. Section 1081.405(a). While not surprising given the language of the rule, what is surprising is the degree to which Director Cordray felt free to depart from the administrative law judge's rulings, not just in legal interpretation but in the remedy ordered. The clear message is that Director Corday really will exercise de novo review in such cases, and will not hesitate to disagree with legal or factual findings made by the administrative law judge. Director Cordray also made clear that the proceeding was governed by a “preponderance of the evidence standard.” PHH at 9, citing U.S. Securities and Exchange Commission v. Steadman, 450 U.S. 91, 95-102 (1981).
Both Parties Appealed, But Director Cordray Always Has the Final Say
In this case, both the CFPB’s enforcement counsel and PHH appealed aspects of the administrative law judge's ruling. Even absent such appeals, however, the final decision in contested administrative proceedings belongs to the director. In cases where no appeal is filed, the director may either affirm the administrative law judge's ruling within 40 days or else must ask for additional briefing. 12 C.F.R. Section 1081.402. If a party intends to seek judicial review of the administrative law judge's decision, it must first file a timely appeal to the director. The failure to file such an appeal waives the right to further judicial review. 12 C.F.R. Section 1081.402(c).
PHH’s Options for Further Review: Reconsideration or Appeal
PHH faced two possible avenues for further review. First, it could have sought reconsideration from Director Cordray within 14 days of the decision. 12 C.F.R. Section 1081.406. Such reconsideration, however, is limited to “new questions raised by the final decision … and upon which the petitioner had no opportunity to argue.” Id. PHH’s second option was to seek judicial review either in the D.C. Circuit or in the Third Circuit, where PHH’s principal office is located. 12 U.S.C. Section 5563(b)(4). This is the avenue PHH chose, as it has filed a petition for review in the D.C. Circuit.
PHH Can Pay Into Escrow Pending Appeal
The CFPB’s rules provide that final orders are effective 30 days from the date of issuance, and that filing an appeal does not operate as a stay. 12 C.F.R. Section 1081.407(e); see also 12 U.S.C. Section 5563(b)(5). In his decision, Director Cordray provided that if PHH appeals the order to the court of appeals, it can choose to pay the disgorgement amount into an escrow account. PHH at 37. He did not, however, provide for any stay of the injunctive provisions of the order, and it appears unlikely he would grant such a stay pending appeal. See 12 C.F.R. Section 1081.407. Absent a stay by the court of appeals, the injunctive provisions — including rather onerous record-keeping provisions — will take effect July 4. Allowing PHH to pay the disgorgement amount into an escrow account pending appeal seems designed to limit the likelihood of the court of appeals granting a stay of that aspect of the CFPB’s order.
Standard of Review on Appeal and the Rule of Lenity: Deference or Not?
While PHH is entitled to judicial review, that review, unlike Director Cordray’s review of the administrative law judge's decision, may not be de novo. Rather, in the ordinary course, the court of appeals would likely afford substantial deference to the CFPB’s legal determinations interpreting the statute at issue and its implementing regulations. See generally Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984). While the CFPB’s factual findings will have to be supported by substantial evidence, 5 U.S.C. Section 706(2)(E), its legal interpretations made in the course of an adjudication proceeding would ordinarily be afforded deference and upheld unless they are arbitrary and capricious. 5 U.S.C. Section 706(2)(A); see United States v. Mead Corp., 533 U.S. 218, 230 (2001).
One possible basis to avoid such deference in this case is the rule of lenity, which provides that ambiguities in criminal statutes should be interpreted in favor of defendants. As Justice Antonin Scalia has recently noted, there is a question as to whether Chevron deference should be applied to statutes such as RESPA that contain both civil and criminal prohibitions, in light of the rule of lenity and the courts’ role in interpreting criminal statutes. Whitman v. United States, 574 U.S. __ (2014) (Scalia, J., statement respecting denial of certiorari); see also Carter v. Welles-Bowen Realty Inc., 736 F.3d 722, 729 (6th Cir. 2013) (discussing application of rule of lenity to RESPA) (Sutton, J., concurring). Director Cordray summarily rejected PHH’s argument that the rule of lenity compelled adoption of PHH’s interpretation of RESPA Section 8(c)(2). PHH at 20. Notwithstanding having spent five pages articulating his interpretation of that provision and disavowing and distinguishing a prior HUD letter regarding the same issue — suggesting that alternative interpretations are at least plausible — Director Cordray concluded in a single sentence that the rule of lenity does not apply because “the text, structure and goals of Section 8(c)(2) and RESPA as a whole” did not leave any ambiguity as to its meaning. PHH at 20. A reviewing court might well disagree as to the possible ambiguities in Section 8(c)(2). Rather than affording deference to the agency’s interpretation of such ambiguous statutory provisions, the court might instead determine that the rule of lenity applies, and adopt the interpretation most favorable to PHH. This appears to be an area of substantial risk for the CFPB on appeal, given the judicial interest shown in this issue and the novelty of the CFPB’s interpretation. The same is true in varying degrees with respect to the other statutory and regulatory interpretations discussed above.
Disgorgement Based on Gross Revenue
Reversing the administrative law judge, Director Cordray also ordered PHH to disgorge all of the reinsurance premiums that it received since July 21, 2008, without deduction for claims actually paid to the mortgage insurers. PHH at 33-34. Director Cordray grounded this decision on the principal that disgorgement is based on ill-gotten gains, as opposed to ill-gotten profit, and that the wrongdoer is not entitled to offset expenses incurred in the course of its illegal conduct. Unless it is reversed on appeal, this broad view of disgorgement is likely to have ramifications in other CFPB enforcement actions, as the CFPB enforcement staff is likely to seek such disgorgement in other cases where it cannot obtain consumer restitution. The notion that it is improper to deduct expenses incurred by a party in the course of the conduct that the CFPB believes to be illegal is thus likely to make its way into CFPB settlement demands as well as its demands in contested litigation.
No Civil Money Penalty
Among the more surprising aspects of Director Cordray’s decision is his determination that civil money penalties are not appropriate. For an agency that has aggressively pursued such penalties in most of its enforcement actions, Director Cordray’s decision to forgo penalties in this case is notable. In reaching this determination, Director Cordray noted that penalties were only available for payments received by PHH after July 21, 2011, the effective date of Dodd-Frank, and that “the vast majority of PHH’s conduct over the period encompassed by its reinsurance agreements” preceded that date. PHH at 38. He also determined that the award of disgorgement was a “just and sufficient remedy” to fulfill the CFPB’s goals. Id.
On the one hand, the director’s decision seems uniquely limited to the facts and procedural posture of the case at hand — where he had already imposed monetary remedies nearly 17 times that ordered by the administrative law judge, and where the vast majority of the conduct at issue was not subject to penalties because it predated Dodd-Frank. Facing the likelihood of appeal, declining to impose civil money penalties was a way to mitigate the magnitude of his departure from the administrative law judge's order, without adopting precedential legal positions that would impact future CFPB cases.
On the other hand, the director specifically noted that some of the statutory factors governing the imposition of penalties did not favor mitigation (including PHH’s size, lack of good faith and the gravity of the violations), PHH at 37, yet he still declined to impose any penalties. Parties involved in CFPB enforcement proceedings should use this precedent to argue that civil money penalties are not appropriate in their case, because other remedies are sufficient to achieve the CFPB’s goals.
More Captive Reinsurance Cases?
To date, the CFPB has settled with five different mortgage insurers involved in captive reinsurance arrangements. The case against PHH was the CFPB’s only action involving a mortgage lender/reinsurer. Other mortgage lenders/reinsurers who were involved in the captive reinsurance arrangements that were the subject of the CFPB settlements may be on the CFPB’s radar screen. The CFPB enforcement staff may now feel emboldened by the director’s decision to pursue these additional parties. On the other hand, given PHH’s impending appeal, and the CFPB’s position that there is no statute of limitations applicable to administrative RESPA cases, those other parties may push back against CFPB efforts to take action against them before the court of appeals has a chance to rule on the myriad issues discussed above. It will be interesting to see whether the CFPB brings any additional cases in this area before PHH’s appeal is finalized.
Director Cordray has sent a clear message that he intends to exercise the full scope of his authority as the final decision maker in contested administrative litigation brought by the CFPB. While parties still must develop a factual record and present legal arguments to the administrative law judge in such cases, it is clear that the director will not necessarily afford deference to either the factual determinations or legal conclusions made by the administrative law judge. And while the director took two notable positions in favor of PHH — holding that the continuing violation doctrine does not apply and declining to impose civil money penalties — his decision as a whole is consistent with the CFPB’s approach to interpret the laws it is charged with enforcing in a manner most favorable to consumers.
Thus, Director Cordray’s rulings as to the applicable statute of limitations, the accrual of RESPA claims, the definition of referral and, most importantly, the scope of Section 8(c)(2) of RESPA all represent an expansive view of the agency’s authority in this area. PHH’s appeal will have ramifications on two fronts — both the CFPB’s interpretation of RESPA and the CFPB’s administrative authority in general. Depending on the substance and tone of the ruling, it could have important ramifications for the CFPB’s enforcement of RESPA and its conduct of administrative proceedings in the years to come.
 Notably, the CFPB has argued that the continuing violation doctrine applies in other RESPA cases. See CFPB’s Opposition to Defendants’ Motion for Judgment on the Pleadings, at 18-19, in CFPB v. Borders & Borders, No. 3:13-cv-01047-CRS-DW (W.D. Ky.), Dkt 42. Presumably, the director’s determination that the doctrine does not apply to cases involving Section 8 of RESPA will be binding on the CFPB in the Borders litigation as well.