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Borders & Borders Prevails Against Consumer Financial Protection Bureau

Jul 18th, 2017

Represents First Loss for the CFPB at the Federal Trial Court Level

LOUISVILLE, Ky. (July 17, 2017)—Borders & Borders announced today that the Consumer Financial Protection Bureau’s (CFPB) claims against it have been dismissed on a summary judgment ruling issued July 13, 2017 by the United States District Court for the Western District of Kentucky.  

From 2006-2011, Borders & Borders, PLC established and operated title insurance agencies that were organized as affiliated business arrangements pursuant to the statutory safe harbor available under the Real Estate Settlement Procedures Act (RESPA).  In October 2013, the CFPB filed suit after Borders & Borders refused to agree to a punitive consent decree demanded by the agency.  The complaint sought to enjoin the affiliated business arrangements as alleged violations of RESPA, despite the clear application of the safe harbor and the fact that Borders & Borders stopped operating the agencies in 2011.  The complaint did not concern current closing activities after 2011, and there was no allegation or claim of any consumer harm.  To the contrary, all consumers were fully informed of the affiliated business arrangements, and they selected the title agency that would issue title insurance at closings.

Borders & Borders engaged Stites & Harbison, PLLC to defend the lawsuit brought by the CFPB.  Following the close of discovery, Borders & Borders requested summary judgment from the Court because the proof was clear that the firm followed RESPA and all applicable law in the operation of the title agencies.  The Court agreed, and entered summary judgment in favor of Borders & Borders and dismissed the CFPB’s lawsuit.  

Upon learning of the dismissal of the suit, John Borders and Harry Borders stated, “We are pleased that the Court agreed with what we explained to the CFPB all along – our affiliated business arrangements were designed and operated to be fully compliant with federal law.  We appreciate the support of our clients and friends in the real estate community and beyond during this time.”

“The Court’s summary judgment ruling is a complete vindication for our client Borders & Borders, an honest and reputable family business that found itself in the crosshairs of a regulatory agenda,” stated Morgan Ward, a Member (Partner) with Stites & Harbison and one of the attorneys who defended Borders & Borders.  “The CFPB sought to nullify RESPA’s safe harbor for Affiliated Business Arrangements by sending a message to the industry that even if you follow the law, you are still subject to onerous prosecution.  This case was not about protecting consumers.  Instead, this was a classic example of the CFPB’s unfair practice of regulation by enforcement.  We are gratified with the Court’s ruling and are very pleased for our clients, who showed a great deal of courage in standing up to the CFPB and demonstrating that they followed the law.”

The case appears to be the CFPB’s first loss on the merits at the federal trial court level.

About Borders & Borders

Borders & Borders is a family-owned real estate law firm founded by J. David Borders that has operated in Louisville since 1971.  The firm is currently managed by his sons John Borders and Harry Borders, and it employs seven lawyers and 19 paralegals and staff.  For more information visit

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