The U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of lender PHH Corp. in its challenge against the penalty, which was imposed following accusations the South Jersey mortgage company initiated a kickback scheme. Calling the CFPB "unconstitutionally structured," the court said too much power rests with the regulator's sole director, Richard Cordray, who after the ruling could now be removed from his position by President Barack Obama or his successor.

Alan S. Kaplinsky, head of Ballard Spahr's consumer financial services practice, said while the perceived constitutional flaw will garner a lot of attention, the more important aspect to the court's opinion is that it believes the CFPB's interpretation of the Real Estate Settlement Procedures Act (RESPA) was incorrect.

Passed in 1974, RESPA was designed to help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.
"But that doesn't matter much because Obama will not remove Cordray and if she's elected, Clinton will not remove him either," Kaplinksy said. "And who knows what Trump would do."