The Consumer Financial Protection Bureau (CFPB) filed a complaint in October 2013 against Borders & Borders PLC, a Kentucky law firm, for allegedly violating RESPA. The bureau said the firm, and its principals, used a network of sham affiliated business arrangements (AfBAs) to pay kickbacks in return for referrals of real estate settlement business. The agency also claimed that Borders failed to provide its customers with adequate AfBA disclosures, which are required under RESPA and Regulation X.
Borders denied the CFPB’s allegations and decided to battle it out in court. On May 1, Borders asked the U.S. District Court for the Western District of Kentucky to dismiss the case.
The law firm filed a motion for judgment on the pleadings, arguing that the test the CFPB used to determine the AfBAs were shams was invalid.
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