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At Freeman v. Quicken Loans, Inc." Justice Scalia refused to apply the chevron Doctrine (Chevron USA Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984)), in which the tribunal gives respect to the authorities (so-called "Chevron respect"). Both by decree and by a 2001 policy statement, the Department of Housing and Urban Development ('HUD') had provided that an undeserved arrangement charge, whether or not'split' between two parts, was forbidden by Section 8(b) of the MLA.
Despite this long-standing agency location, the tribunal ruled that Chevron does not hold if the law, as here, was clear. Angryly, the political factions had discussed the correct use of Chevron, the petitioner assigning nineteen plus pages in his pleadings, and the respondent fifteen plus pages in his letter. The applicant alleged that Chevron requested HUD to comply with the rules established by HUD.
HUD's regulatory approach seemed very clear: HUD had rigorously designed its regulatory approach to ban undeserved charges, regardless of whether they were shared or not. The petitioners claimed that the respect was also due to HUD's clear 2001 Declaration of Principles, in which RESPA Section 8(b) was construed to ban undeserved charges, whether allocated or not: "Paragraph [8(b)] prohibits[unearned fees] .... whether the whole fee is distributed or distributed among more than one individual or corporation or is withheld by an individual person" (emphasis added).
Declaration of Principles 2001. Fifth Circle panels had refused to respect the chevron because they found that the law was clear and required two parts - a donor and a recipient - i.e. a "split". "Moreover, HUD's policy statement does not deserve respect for Chevron as it does not comply with the directives of the Administrative Procedure Act.
The defendant in Quicken reasoned that RESPA Section 8(b) clearly did not achieve undivided charges. There was also an argument for the lenience rule: where a law provides for possible penal responsibility, any confusion should be solved in favour of a stricter interpretation. Regarding the use of the chevron warning, the defendant reasoned that the chevron only applied to the "gap filling", and in Section 8(b), Congress "left no gap: it directly addressed the question of what forbidden practice.
Regardless of what ambiguities were imaginable, it was "not the kind of ambiguities that invite agents to fill the legal spaces with their own technical political judgements. Justice Scalia controlled Quicken's advice on the respect issue: It is clear from the verbal arguments that the statutes are clear: they provide for two different exchange measures, i.e. a party who charges or receives a fee and another party who accepts a 'part, apportionment or percentage' of that fee.
Ergo, no need to use chevron. Thus, the discussion on declarations of principle (and other regulative announcements, views, etc. that do not carry everything that goes with the rigour of the APA Notice and Comment) remains for another tag. The next ones could be HUD's proposal on rules on fair credit allocation (disparate effects), Bureau of Consumer Financial Services' issue 2012-04 (Fair Lending) and the Interagency Task Force on Fair Setting Policy Statement on Discrimination in Setting of 1994, all of which take the view that a breach of rules on unfair credit allocation can be demonstrated by means of proof of disparate impacts, also known as an effect test:
Lenders have wondered whether equitable credit can be relied on "faceless" behaviour where there is no intention to discrimination, i.e. whether the rules as set out in declarations of principle are in breach of the statute. HUD's suggested rules are undoubtedly part of an agency's policy to ensure Chevron's respect should the dispute arise.
HUD maximizes the probability that the Supreme Court will rely on the HUD interpretations by applying the APA Note and Comment Method. In order to prevent this consideration, the lender may be obliged to take the definitive rules to court when they are made. And, of course, as we learnt from Quicken, everything can depend on whether the judges decide that the laws for equitable credit, such as RESPA, are clear and achieve only deliberate discriminatory action.