News

The U.S. Supreme Court ruled 9-0 in favor of Quicken Loans in a lawsuit related to the Department of Housing and Urban Development’s decision to expand the reach of a law that prohibits real-estate providers from splitting fees.

The Real Estate Settlement Procedures Act, established in 1974 and now enforced by the Consumer Financial Protection Bureau, prevents title insurers and appraisers from splitting fees and taking kickbacks. In 2001, HUD expanded the scope of the legislation and said that RESPA’s reach was not limited to “situations where at least two persons split or share an unearned fee,” according to The Wall Street Journal.

As a result of HUD’s decision to expand the law, three married couples charged that Quicken Loans illegally split fees with itself.

The solicitor general sided with the plaintiffs and said that HUD not only had the right to interpret the statute and did so correctly but that the court should respect the agency’s decision. A senior litigator from the Consumer Financial Protection Bureau, which is now responsible for enforcing RESPA, also signed an amicus brief in favor of the plaintiffs.

The justices disagreed, however, and said that HUD’s assertion of its regulatory authority was a “palpable overreach,” The Wall Street Journal reports.

Justice Antonin Scalia said that HUD’s interpretation of RESPA was “manifestly inconsistent with the statute HUD purported to construe,” adding that the text of the law “clearly describes two distinct exchanges,” according to The Wall Street Journal.