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06-0409-cv Cohen v. JP Morgan Chas e & Co. UNITED STATES COURT OF APPEALS F OR THE S ECOND C IRCUIT

Au gus t Te rm, 2006 (Argued: September 27, 2006 Decided: August 6, 2007) Do cke t No
. 06-0409-cv

S YLVI A C. C OHEN , on b ehalf

of h erself and all other per sons si milarly si tuate d Plain tiff-Appellant ,

— v. — JP M ORGAN C HASE & C O . and JP M ORGAN C HASE B ANK , Defendants-

Appellees

. Before: W ALKER , K ATZMANN , and R AGGI , Circuit Judges.

__________________ Appeal from a judgment of t he United States Dist

rict Court for t

he Easter n Distri ct of New York (Charles P. Sift on, Judge ), di smissi ng complaint that an undivided une arned fee charged i n connecti on with the r efinanci ng of a home mortgage vi olate d Section 8(b) of the Rea l Esta te Settle ment Procedure s Act of 1974, 12 U.S. C. § 2607(b), and New York Gen er al Bus in es s Law § 349. VACATED and R EMANDED.-2- C ATHERI

NE E. A NDE RSON , Gis kan & So lotar off , Ne w Y ork , Ne w Y ork , for Plaint iff -Appellant . G ARY C. T EPPER , Arent Fox PL LC, W ash ing ton , D.C ., for DefendantsAppellees

. C HRIST INE N. K OHL , Civi l Divis ion, Unit ed State s Depar tment of Justi ce, Washington, D.C ., for Amicus Curi ae the United States Department of Housing and Urban Development in support of Plai ntif

f-Appellant

.

R EENA R AGGI , Circuit

Judge : Plaintiff Syl via C. Cohen sued defendan t s JP Morgan Chase & Co. and JP Morgan Chase B ank (here inafter referred to c ollectively as “Chase” ) in the Unit ed State s District Cou rt for the Eas tern Dis tri ct of New York (Charles P. S ifton , Judge ), al leging that Chase ’s colle ctionof an unearned “pos t-cl osing fee” in connect ion with it s refi nancing of h erhome mortgage violat ed Secti on 8(b) of t he Real Estat e Settl ement Procedur es Act of 1974 (“RE SPA ”), 12 U.S.C. § 2607( b), an d N ew Yo rk G ene ral B usin ess L aw § 34 9. In a ju dgme nt entere d on M arch 16, 2 005 , Cohen v. J.P. Morgan Chase & C o. , No. CV-04- 4098(CPS) (E.D.N.Y. Mar. 16, 2005), the dis tri ct court dismis sed Cohen’s complai nt on the gr ound that it fai led to s tate a clai m under RESPA § 8(b) becaus e (1) t he fee at i ssue was analogous to an “ov erch arg e,” which Kru se v. W ells Fargo Home M ortgage, Inc. , 383 F.3d 49, 55-57 (2d Cir . 2004), held was not pr ohibit ed by § 8(b); and(2) pl ainti ff had, i n any

even t, fail ed to ple ad that the chall enged fee repr esented part of a c harge spl it bet ween Chase-3-

and one or more third parties. Th e district c ourt sim ilarly conclu ded th at Co hen failed to state a decepti ve practi ces clai m under stat e law because t he pleaded fac ts demonst rated t hat the chal lenged fee was di sclose d. For the rea sons st ated her ein, we conclude that Kruse v. Well s Fargo Home Mortgage, Inc. , 383 F.3d at 55- 57, does not controlthis case. We further conclude that RESPA § 8(b) is amb ig uous as to whether it s prote ctions can apply to undivi ded, as wellas divi ded, unearnedfees. Becaus e the Department of Housing and Urban Development (“HUD”), the agency cha rged with admi nist ering RESPA, reasonably r esolves this ambigu ity by cons truin g the statute to apply to u ndiv ided fees, w e acc ord th at con str uctio n deferenc e pur suan t to Chevron U.S .A. Inc . v. Na tural R esou rces D efen se C oun cil, Inc. , 467 U.S. 837 (1984) , and

we vacate the dis missalof Cohen’s federa l cla im. We simil arly vacate t he dismis sal of Cohen’s state cl aim because, if she can show that t he chall enged fee viol ated RESPA, that factmigh t allow her to e stablish a dec eptive busin ess pra ctic e u nde r Ne w York l aw. A cc or di ng ly, we rema nd th is case to the dis tri ct court for rei nstat ement of the c omplaint and further proceedi ngs consis tent wit h this opinion. I. Factual

Background In Se ptember 2003, whe n Sylvia Cohen refinanced her home m ortgage, Chase present ed herwith a cl osing stat ement li sti ng various fees inc urred i n connecti on with that trans acti on. Amo ng these was a $225 “post- closi ng fee,” which Cohen pai d. Cohen alleges that Chase provided no s ervice s for this fee. Altho ugh Chase di sputes t his cont ention, on1 Because the di stri ct cour t dism issed C ohen ’s com plaint for failu re to st at e a c la im,

it had no o cca sion to co nsid er th e pr opr iety of her pro cee din g on beh alf o f a c lass. -4- review of a judgment of di smissal , we must ass ume its t ruth. See , e.g. , McCarthy v. Dun & Bradstr eet Corp. , 482 F.3 d 18 4, 19 1 (2 d C ir. 20 07)

. On September 22, 2004, Cohen institut ed this acti on, suing on behal f of hersel f and

a puta tive cla ss of persons wh o had also re finan ced h om e mo rtgage s with Ch ase an d paid simil ar unearn ed fees. See Fed. R. Civ. P. 23. 1 Following t he dist rict court’ s grant

of Chase ’s motion t o dismis s and it s denialof Cohen’s motionfor reco nsid erati on, see Cohen

v. J.P. Morgan Chase & C o. , No. CV-04-4098 (CPS ), 2006 WL 20596 (E.D.N.Y. Jan. 4, 2006), Co hen filed this a ppe al. II. Discussi on A. Co hen’ s RE SPA Claim 1. RESPA § 8(b) and t he Standard of

Review Cohen’s federal claim against Chase is premised on RES PA § 8 (b), which states: No person shal l give and no person shal l accept any por

tion, sp lit , or percent age of any ch a rge m ade o r receiv ed fo r the ren dering of a re al estate sett lementservi ce in connecti on with a trans ac tion involving a fede rally relate d mortgage l oan other t

han for ser

vices ac tually per formed. 12 U.S .C. § 260 7(b ). Ina f ormalpol ic yst at eme nt , H UD has construed thi s stat utory secti on to proscribe unearned fees in three contexts : [where] (1) [t ]wo or more persons spli t a fee for sett lementser vices, any porti on of which is unearned; or (2) one se ttl ement servi ce provider marks-up the cost of s ervice s perfor med or goods provide d byanother s ettl ement servi ce2 The Policy Statement ’s fi rst number ed provis ion prosc ribes unearnedfees that make up an ypor

ti on o f afe e s pl it

be twe en two or more persons, what we refer to hereinafter as a “div ided une arn ed fee.” -5- provider without pr oviding additio nal ac tual, necessary, and distinct ser vices, goods, or faci lities to justify the additional charge; or (3 ) one servi ce provide r charges the consumer a

fee where no, nominal , or dupl icat ive work is done , or the fee is in excess of t

he reasonabl e value of goods or faci lities pr ovided or the ser vices ac tually per formed. Statement

of Policy

2001-1, 66 Fed. Reg. 53,052, 53,059 (Oct. 18, 200 1) (codi fied at 24 C.F .R. § 350 0.14( c)) (“P olicy Statem ent”) (e mp hasis added). The t hird numbered provisi on in fact r eferences two circumst ances. Cohen r elie s on the first, h ighligh ted circ um stance in pursuing her cla im that

“one servi ce provide r,” s uch as Chase, c annotcharge aconsum er a fee for which “no . . . work i s done,” what we re fer to he reinaf ter as an “undivide d unearned fee .” 2 The second, unhi ghlight ed circ umstance prohibits charges over and above “reaso nable valu e.” We invalidat ed this part of the third pro visi on in Krus e v. Well s Farg o Home Mortgage, Inc
. , 383 F.3d at 57 , dis cussed infra at [6-8]

. We review the distric t court’s decisio n to di smi ss Cohe n’ s § 8 (b ) c la im de novo , both because it is a ruling of la w pu rsua nt to Fed eral R ule o f C ivil P roc edu re 1 2(b )(6), see McCarthy v. Dun & Bradstreet Corp. , 482 F.3d at

191, and becaus e it de pends on statutory constr uction, see Kruse v. Well s Fargo Home Mortgage, Inc. , 383 F.3 d at 5 4. Further , “the questi on of the appr opriat e levelof deference to accord agency regulations i s one purel y of law, subje ct to de novo review.” Coke v. Long Isl and Care at Home, Ltd. , 376 F.3d 118, 122 (2d Cir . 200 4), vacated on ot her grounds , 546 U .S. 1147 (20 06).3 In so ruli ng, we reje cted the views o f three sister circuits that § 8(b)’s ph rase, “[n]o

person shallgive and no per son shallaccept” r equires both a culpable gi ver andacceptor of the chall en ged fee for ther e to b e a v iolat ion of la w. See Krus e v. Well s Farg o Home Mortgage, Inc. , 3 83 F .3 d a t 5 7- 58 (re je ct in g vi ews of Fourth, Seventh, and E ighth C ircuits in Boulware v. Cross land Mor tgage Corp. , 291 F .3d 26 1, 265 (4th Cir . 200 2), Krzalic v. Rep ublic Titl e Co. , 314 F.3d 875 , 879 ( 7th Cir. 2002) , and Hau g v. Ban k of Americ a, N. A. , 317 F.3d 832 , 838 ( 8th Cir. 2003) , in favor of those expresse d by Ele venth Circ uit in Sosa v. Chase Manhattan Mortga ge Corp. , 348 F .3d 97 9, 983 (11th Cir. 2003 )). -6- 2. Kruse Does N ot Control This Case Because the dis tri ct court ruledthat

Cohen’s claim was precluded as a matter of law byour constructi on of RESPA § 8(b) i n Krus e v . We l ls Fargo Home Mortgage, Inc. , 383 F.3d at 57, we consider at t he ou t se t wh et

he rt ha t de ci si ondo es , i n f ac t , co nt r olt hi s c as e. We

conc lude th at it doe s not. In Kruse , we c onsid ered tw o par ts of th e quo ted P olicy Statem ent: numb ere d provisi on 2, refe rencing mar k-ups; and the second part of numbered provi sion3, refe rencing fe es in excess of r easonable value. The Kruse plaintiffs al leged that Wells Fargo had violat ed § 8(b) by marki ng up the pri ce of servi ces provi ded by a t hird par ty . We concluded thatRESP A § 8(b) was “not cl ear and unambiguous with res pect t o its coverage of mark

ups .” Id. at 58. 3 Because the s econd prong of HUD’s Policy Statement

reasonably r esolved that ambiguit

y t o prohibi t mark-ups , we accorded Chevron defe rence to th at agency inter pretation. See id. at 58, 61. The Kruse plaintiffs fur ther alle ged that

defendants violat ed § 8( b) by charging fees in excess of the re asonable va lue of servi ces that they did provi de. We held that thi s a gency interpr etat ion, whic h effecti vely imposed pri ce contr ols on-7-

sett lementfees, was contra ry to the pla in me anin g of the s tatut e. See id. at

56

. We explai ned that RESPA § 8(b) does not authori ze court s to bre ak down a single c harge into “r easonable ” and “unreasonable ” co mp one nts. Id. (“Whatever i ts si ze, such a fee is ‘ for’ t

he servi ces rendered bythe ins tit

ution and r eceived by

the borr ower.”). Thus, we inval idate d that part of the Poli cy St atement’ s thi rd prong proh ibiting fees ex ceed ing the “reaso nable value” of the s erv ices ren der ed. Id. On this appeal, Cohen reli es on neit her of the Policy

Statement

prov isions a t issue in Kruse to support

her § 8(b) clai m. Inst ead, she invokes only that part of t

he third numbered provisi on wh erein H UD interpre ts § 8(b) t o prohibi t undivi ded unearnedfe es ch ar ge d b y a single servic e pro vider. E ach p arty to thi s acti on neverthe less c ontends that Kruse com pels resol utionof this appeal in its fav or. Co hen ( with the su ppo rt of H UD ) argu es that th e twin ruli ngs in Kruse effecti vely establ ish that, while § 8(b) does not aut horize price c ontrol s for servi ces actual ly

performed, it does proscribe fee s for no services, whether str uctured as a divided or undivi ded charge. Ch ase co unters that Kruse approved the applic ation of § 8(b) to mark-ups onl y because a mark-up, by allowing one person t o piggy -back an unear ned fee onto the charg e of a third-p arty service prov ider, effectiv ely consti tutes a divide d charge. For its part, t he district

court concluded that Cohen’s claim failed because the chal lengedfee was suff iciently analogous t o the over charg es that Kruse held were bey on d the reach of t he statu te. In fac t, Kruse had no occasi on to consi der and, t herefore, did not addr ess the critical-8-

issue on this appeal: whether RESPA § 8(b)’s refe rence t o “any por tion, split, or percent age of any cha rge” c learly and un ambigu ously indicates Con gress’s intent to prohibit unearned fees only

when incorporat ed in c harg es div ided among two or more per sons, t hereby precluding HU D’s c onstru ction o f the sta tute to p rohib it “one se rvice provider” f rom “charg[i ng] the consumer a fee where no, nomina l, or duplicative work i s done,” Pol icy Statem ent, 66 F ed. R eg. a t 52 ,052

. In thi s quoted l anguage, HUD’s focus is not on lende rs who overch arge for s ervice s actual ly provided; it i s on lender s who charge fees for no servi ces at a ll. A cc or di ng ly, Kruse ’s holding that RESPA § 8(b) is clear ly not a pri ce contr ol statute d oes n ot reso lve this ap pe al. Si m ila rly, the quoted Policy Statemen t language here is dist inct f

rom the provi sion concer ned with mark-ups

. Th us, Kruse ’s ho ldi ng that RESPA § 8(b) is amb iguo us w ith rega rd to m ark-u ps, an d that th e seco nd p rong of the Poli c y Statement

reaso nably res olves this am bigu ityby establishing their ille ga lity, tell s us nothing about whether § 8(b) also pr ohibit s undivi ded une arn ed fees . To resolve t hat is sue, we must again interpre t § 8(b ) acco rding to the tw o-step proc ess ou tlined in Chevron U.S.A. Inc. v. Natural Resources Defense Counci l, I nc. , 467 U.S. at 842-43 , t hi s t ime focusing on R ESP A’s refe ren ce to “an y portio n, sp lit, or p erce ntag e of any c har ge.” 3. Chevron An alysis Sup ports H UD ’s Co nstruc tio n of R ES PA § 8(b ) to Prohibi t Lenders f

rom Accepting Undivi ded Unearned Fees

a. Chevron An alysis At Chevron step one, we considerwhether Congres s has clearly

spokenin RESPA § 8(b) t o the is sue of

und ivided unea rned fees. “ If the in tent of Co ngre ss is clear , that is the-9-

end of the matte r; for the cour t, as w ell as the agen cy, must g ive effect to the un amb iguo usly expresse d intent

of Congress. ” Id. ; accord Chauffeur’s Tra ining Sch. , Inc. v. Spellings , 478 F.3d 117 , 125 (2d Cir . 200 7). To a scertain Co ngre ss’s inten t, we b egin with the s tatutorytext because if its la ngu age is un am big uou s, no fur ther inq uiry is n ece ssar y. See Zuni Pub. Sch. Dist. v. Dep ’t of E duc. , 127 S .Ct. 15 34, 15 43 (2 007 ); Robinson v. Shel l Oil Co. , 519 U. S. 337, 340 (199 7); Daniel v. Am. Bd. of Emergency Med. , 428 F.3d 408, 423 (2d Cir. 2005 ). If the statut ory language is ambiguous, however, we will “resort fir st to canon s of statutory constr uction, and, i f the [st atutor y] meaning remains ambiguous, to legisla tive h istor y,” Daniel v. Am. Bd. of EmergencyMed. , 428 F.3d at 423 (int ernal c itations omit ted), to see if these “ interpre tive clu es” p ermit u s to identi fy Congres s’s cl earinten t, General Dynami cs Land Sys. , Inc. v. Cline , 540 U.S. 581, 586 (2004). If we still cannot conclude that Congress has “direc tly

addresse d the pre cise qu estion a t issue,” w e w ill proce ed to Chevron step t wo, which instructs us to defer to an agency ’s int erpret at ion of the statute, so long as it is “rea son able .” Chevron U.S.A. Inc. v. NaturalRes. Def. Council , Inc. , 467 U.S. at 843- 44; accord Kruse v. Well s Fargo Home Mortgage, Inc. , 383 F.3 d at 5 5.

b. The Statut oryPhrase “AnyPorti on, Split , or Per centage of Any Charge” Is Ambiguous with Res pect to Co ngre ss’s Inte nt to Prohibi t Undivided Unear ned Fees Accepting as true the all egations in Cohen’s c omplaint , we assume that the c halle nged $225 post-c los ing fe e cou ld con stitute a “ charg e” fo r wh ich no “serv ices [w ere] ac tually performed” under RE SP A § 8(b ), i.e

. , an un ea rn ed fe e. 1 2 U .S .C . § 2 60 7( b) . A cc or di ng ly,-10-

at the fi rst s tep of Chevron analysis, we mu st decide w hether § 8(b )’s referenc e to “any porti on, spli t, or

percent age of” an unearne d charge dem onstra tes C ong ress’s c lear inten t to proh ibit unearned fees only when reflect ed in char ges divided among tw o or more persons. Chase submits that s uch intent is ap par ent f rom the p lain m ean ing of th e w ord s “p ortio n,” “sp lit,” and “pe rcen tage .” To support Cohen’s clai m, HUD counters that § 8(b)’s r eference to “ anyporti on, spl it, or percent age of anycharg e” s ig nal s Co ng ress’s b road er inten t. Because the te xt is , in fa ct, subject to “dive rgent, but plaus ible, constr uctions ,” on the is sue of und ivid ed u nea rne d fe es, Krus e v. Well s Farg o Home Mortgage, Inc
. , 383 F.3d at 58, we

conc lude th at it is am bigu ous in revea ling C ong ress’s in tent on this sub ject. To explain, w e begin b y considering the “o rdinary meaning” of the nouns atthe cent er of the c ont este d ph rase . Gon zales v. Carh art , 127 S.Ct. 1610, 1630 (200 7); accord Tafari v. Hues , 473 F.3 d 44 0, 44 2 (2 d C ir. 20 07) . T he w ord “ porti on” is com mo nly und erstoo d to

mean “an indi vidual’ s part or share of something” or “a part of a whole.” We bster’s Third New International D ictionary 1768 (2002). “Split ” means “a product of divis ion by

or as if bysplittin g,” or “a s hare (as of booty , winnings , profi ts). ” Id. at 220 2. “Pe rcenta ge” is

com mo nly underst ood to mean “a part of a whole express ed in hundredt hs.” Id. at1675. To the extent

the words “share” and “part” recu r in thes e definitions, w e note that “sh are” is

com mo nly defined as “a porti on belonging

. . . to an individual, ” id. at 2087, wh ile “pa rt” is definedas “on e of

th e equalorune qua l p orti ons in to whi ch s ome thing i s or is regarded a s divided” or “something less t han a whole,” id. at 1645. Thus, because the w ord s “p ortio n,”-11-

“sp lit,” and “percent age” are commonly und erst ood to refe rence things that have been divided and th at are les s th an a who le, their us e toge ther in R ES PA § 8(b ) cou ld plau sibly be underst ood to si gnal a legisla tive inten t to proh ibit unea rned fees o nly wh en reflected in divided charges. Our task at Chevron step one, ho wev er, is not simply to int erpret

indivi dual words but to construe stat

utes. In so doing, we follow “the cardinal rul e that stat utory l anguage mu st be read in context since a phrase gather s meaning from t he words around i t.” General Dynamics Land Sys. , Inc. v. Cline , 540 U .S. at 596 (internal qu otation mark s omitted). In RESPA § 8(b), Congress pla ced the words “por tion, spli t, or

percentage” within the phrase

“ anyporti on, spl it, or percent age of anychar ge.” 12 U.S.C . § 2607(b ) (emph asis added ). As th e S up re m e C ou rt h as fr eq ue nt ly o bserved, us e of the word “any” in st atutor y t ext gene rally indicates Cong ress’ s int ent to s weep broadly to reac h all varieties of t he ite m referenc ed. See , e.g. , United Stat es v. Gonzale s , 520 U .S. 1, 5 (1997) (quoting We bster’s Third New International D ictionary 97 (1 97 6) in co nc lu di ng th at, “[ r]e ad na tu ra lly, the word ‘a ny’ has an expansi ve meaning, t hat is , ‘one or

some indis criminately

of wha tever kind’”); accord HUD v. Ruck er , 535 U .S. 125, 131 (2002) (sam e); Ruggiero v. County of Orange , 467 F.3d 170, 175 (2d Cir. 2006) (not ing that “Congress made [the phrase at issue] even broaderwhen it chose t

he expansive word ‘any ’ to pr ecede the l ist ” (int ernal quotati on marks omitted)). The Cou rt most recently applie d this principle in interpr eting t he phrase “‘ anyair pollution agent or combination of such agents, in cluding anyphysi cal, c hem ical . . .4 The parti es do not point us to any use of the phras e “anyspli t of” i n the Unite d States Code other than in RES PA § 8 (b), and we have identified none ourselves. -12- substanc e or matte r which is emitt ed into or otherwis e enter s the ambie nt air ’” in t he Clean Air Ac t. Massachus ett s v. EPA , 127 S. Ct. 1438, 1460 (2007) (quoting 42 U.S.C . § 7602(g )) (ellipsis and emphases in original). It concluded that “[o]n its face, ” the quot ed language “embraces all airborne com pound s of w hatever s tr ipe, and underscor es that intent through the repe ated use of

the word ‘any .’” Id. The Court has cautioned that, in some circumst ances, t he word “any” may

warranta

narrowerinter pre tatio n. See , e.g. , Small v. United States , 544 U.S. 385, 388 (2005) (“ [E]ven though the wo rd ‘any’ d em ands a b road interpretation, w e must loo k beyond tha t word itself .” (int ernal quot ationmarks o mitted)); Nixon v. MissouriMun. League , 541 U.S. 125, 132 (200 4) (“‘[ A]n y’ can an d do es m ean d iffere nt thing s dep endin g up on th e setti ng.” ); Lew is v. Unite d States , 523 U.S. 155, 160 (1998) (avoidi ng “lit eral r eading of t he words ‘any enactm ent’” that “w ould dram atically sepa rate the statute from its intende d purpose”) . This precedent

only reinfor ces the rule that statutory terms ar e not int erpret ed in the abstr act but in the c ont ext o f su rrou ndi ng l ang uag e. Thus , we mu st consi der whether t he expansive modifier “any, ” when paired wit h the nouns “por

tion, spli t, or

percent age,” canplausibly be constr ued to inc lude an undi vided char ge. We conclude t hat it can. In reachi ng this conclusi on, we note that, although Congre ss appear s to have us ed the precise phrase “any

po rtion, s p lit , or per centage” only i n RESPA § 8(b), it has used the formulat ions “any por

tion of” and “anypercent age of” in ot her feder al statut es. 4 For5 Of course, this cas e present s us with no occ asion t o rule on t he meaning of any

statute exce pt RESPA § 8(b). We reference ot her st atute s merely

to il lustrate why

we c anno t confidently conc lude f

rom the tex t of § 8 (b) tha t Con gress c learly intend ed to proh ibit unearned fees only when they were divided among tw o or more persons. -13- example, 18 U .S.C. § 644 states: “W hoev er, not b eing a n auth orized depo sitory of p ublic moneys, knowingly receives . . . an y public money . . . or uses, transfers, converts, appropri ates or applies any por tio n of the publi c money for

any pur pose not pr escribed by law is guilty of e mb ezz lem ent” (em pha sis ad ded ). Sim ilarly, 18 U.S .C. § 648 and § 653 proscribe as “e mbezzlement” t he unauthori zed use, c onversi on, tr ansfer, or appli cati on of

“ anyporti on of

the pu blic m oney[s ] intruste d to [c ertain perso ns]” (e mp hasis a dded ). Title 19 U.S .C. § 1620 makes it unl awful for a feder al offi cial to accept or receive “ any por

tion of the moneywhich may accr ue to a ny per son m aking [a cus toms] det ecti on and seizur e” (emp hasis added). In none of these s tatut es does Congress ’s use of t he phrase “any portion of” ma nifest a clear in tent not to cri minali ze the pr oscri bed conduct when it involves the wh ole of the money s at i ssue. Indeed, s uch a conclus ion would appear to borde r on the absurd. 5 So too, t

he requir ement that

a financi al inst itution not col lect or att empt to col lect from a stud ent loa n recip ient “ anyporti on of the int erest

on the note which is pay able by the Secretary [of Education ], ” 20 U. S.C. § 1077 (a) (2) (E) (emp hasis a dded ), hardly sign als clear

con gre ssio nal in tent t o allo w in stitutio ns to colle ct the wh ole o f su ch in teres t. As for the phr ase “any percent age,” i n 42 U.S.C. § 1396a( l)( 4)(B), autho rizin g med ic al assistance gran ts, Congress u sed it to allow ce rtain states to “substitute for t h e percent age provided [e arli er in the section] any percentage ” (em phas is added). Becaus e the6 Our conclusi on is re inforce d by t he fact that Congress also r outinely use s the phrase “anypart of” in various federal st atute s tha t do n ot clea rly comm unica te an in tent to referenc e only parts less t han a whole. For e xample, t he federalracket eering s tatut e makes it “unlawful for

any per son who has recei ved anyin co m e d er iv ed , di re ctl y or in di re ctl y, from a patte rn of racket eering ac tiv ity . . . to us e o r in ve st, di re ctl y or in di re ctl y, any par t of such in come . . . [in] i nters tate commerce.” 18 U.S. C. § 1962(a) ( emphasis added) . A defendant who had invest ed all his ra cketeering-derivedin come in int erst ate commerce coul d not escape liabi lit

y by arguing t

hat Congress intende d to reach only persons who invested less than the w hol e of

their illicit p rof

its. See g enera llyLe ona rd B . San d et a l., Mo dern Federal Jury Instr uctions : Crimi nal , Instruc tio n 52-8 cmt. (June 2000) (observing t hat statut ory phrase “anypart of t

he income” has bee n charact erize d as “expansi ve, not restrictive” and “delib erately broad” (intern al quotation m arks om itted)). The sam e con clusion obtain s with respect to federal narcotics laws. See 21 U.S.C. § 854(a ) (making i t unlawful for any person who has deri ved in com e from violatio n of fede ral dru g law s “to u se or in vest, dire ctly o r in di re ctl y, any par

t of such income” i n inter stat e commerce (em ph as is a dd ed )). Si m ila rly, Con gress’s prohibi tion of t he use of force t o i ndu ce an y person emp loyed on a fed erally funded constr

uction project

to “give up any par

t of the compensat ion to which he i s enti tled under his c ont ract o f em plo ymen t,” 18 U.S.C. § 874 (em phasis added), hardly signals aclear -14- percent ages provided by the st atute include 75% and 133% , se e id. § 13 96(l)(2 )(A)(ii), it appears cle ar th at, in this co ntext a t least, C ong ress pla inly intend ed “a ny perce ntage ” to referenc e amounts equalto and evengre ater t han 100 %

. See also Wisconsin Dep’t of He alth & Family

Servs. v. Blumer , 534 U.S. 473, 481 ( 2002) (re ferri ng to “perc entage” in conte xt of 42 U.S .C. § 13 96r-5 , includ ing 1 50% ); Garelic k v. Sull ivan , 987 F.2d 913, 915 (2d Cir. 1993) (disc ussing “pe rcenta ges” o f “charg es” in contex t of 42 U .S.C. § 139 5w-4 (g)(2), including 1 15% ). Mindful that Con gress h as thus f requently use d the phras es “any porti on” and “any percent age” without

conveying a clear

intent to legisl ate only as to less th an th e wh ol e, we cannotconfident ly

conclude fr om their inclusi on inRESP A § 8(b) that, in that context , the y

unam bigu ously conv ey a narro w c ong ression al intent

. 6 Neverthel ess, we consider t heintent

not to criminal ize ext orti on of the wh ole of the vi ctim’s compensati on. -15- poss ibilitythat t

he sum may be m ore than it s part s and that the longe r phrase here at issue — “anyporti on, spl it, or percent age of any cha rge” — migh t conv ey Con gress’ s clear in tent to exclude an und ivided whol e. Three of our sist er circuits have, aft er all , embraced s uch a

narrow inter pre tatio n of RE SP A § 8(b ). See Hau g v. Ban k of Am. , N .A

. , 317 F.3d 832, 840 (8th Cir. 2003) (holdi ng that “ plain l anguage of Secti on 8(b) re quires plaintiffs t o pleadfacts showing that t

he defendant i llega lly

shared fees with a third party”); Krz alic v. R epub lic Title Co. , 314 F.3d 875 , 879 ( 7th Cir

. 2002) (re ason ing that defendant “di d not ‘acc ept any porti on, spli t, or

percent age of anycharge’” bec ause no o ne agreed “to divide” a fee); Bou lware v . Crossl and Mortgage Corp. , 291 F .3d 26 1, 265 (4th Cir. 2002) (“By us ing th e lan guage ‘portion, split, or percentage,’ C ongress w as clearly aiming at a shari n g

arr angement rath er th an a uni later al ov erch arg e.”). But see Sosa v. Ch ase M anha tt a n Mortgage Corp. , 348 F .3d 97 9, 983 (11th Cir. 2003) (holdi ng that “ a single p arty can v iolate subsect ion 8(b)”). The se circu its’ hold ings w ith respe ct to un divide d un earne d fee s can not, how ever, be divorced f

rom their co nstruction of § 8(b)’s phrase “[n]o person shal l give and

no pe rs on s ha llac ce pt ” t o r eq ui re at le as t t wo culpa ble parti es in any proscribed trans acti on. This cour t r ejecte d that c onstruc tion in our consi derati on of “mark-ups” in Kru se v. W ells Fargo Home M ortgage Corp. , 383 F.3d at 57-58. Thus, we do n ot assu me th at a guilt y gi ver and a guilty acceptor mu st parti cipat e in ever y unl awful unearned charge, a ci rcumstance more suggest ive of a di vided char ge.-16-

Nor does the canon of constr uction nosc itur a so ciis permit us to identify a cl ea r congressi onal intent to limit § 8 (b) to div ided cha rge s. See 2A N orman J. Sin ger , Statut es and Statutory Construct ion § 47.16 (6t h ed. 2002) ( explai ning that “when two or more words

are grouped toget

her, and ordinari ly

have a simi lar meani ng, but are not equa lly comprehensive , the general word will be l imit ed and qualified by the spec ific word ”). As we have alr ea dy recogn ized, the common mean ing of all three nouns in the contest ed phrase refere nces s om ethin g th at ha s be en d ivid ed a nd i s less than wh ole. See supra at [10-11]

. Whether or no t any one nou n is m ore sp ecific in this r esp ect, the cri tica l int erpretive is sue in this case is not whether di st in ct io ns ca n be dr awn among these three nouns, but whether

use of the expans ive modifi er “any ” in conj unctionwith al l three w ords g ives rise to amb iguity regardi ng Congress’s intent with res pectto § 8(b)’s prohibi tion on undi vided unearned fees. We conclud e that it d oes. Congres s’s se rialreferenc e to “ anyporti on, spl it, or percent age of any charge” in § 8(b) can plausibly be constr

ued to demonstrate a l egisl ative intent to sweep broadly, prohibi ting al l unea rn ed fees , how eve r stru ctur ed. See g enera lly UnitedStates v. Dauray , 215 F.3d 257, 262 (2d Cir. 2000) (con cludin g that nosc itur a so ciis does no t re so lv e te xt ua l am bi gu ity where language pl ausibl y suppor ts both narrow and expa nsive readin g). W hile Co ngre ss cou ld certa inly have used cl earer l anguage to convey such intent, see , e.g. , 11 U.S.C. § 1301(a ) (bar ring cr editor s from coll ecti ng “ all or any part of a consumer debt” of debtor protected by Chapter 13 bankruptcy (emphasis added )), it could also have us ed clear er langua ge if i ts i ntent w as to exclude undivide d unearned fees-17-

from the st atute ’s rea ch. Faced with competi ng, plausibl e inte rpret ations , we conclude t hat the stat utory text is am big uou s in c onv eying Co ngr ess’ s inte nt. See Mizrahi v. Gonzales , No. 05-0010-ag, sli p at 21-22 ( 2d Cir. June 27, 20 07) (re cognizi ng ambiguit y arisi ng from competing, plaus ible inter pretatio ns); Kruse v. Wells Fargo Home Mortgage, I nc. , 383 F.3d at 58 (observing that “divergent, but plausible, constructions” of language at issue pr eclude finding of “clear

and unam bigu ous” cong ression al inten t); see also United Stat es v. Ga yle , 342 F.3d 89 , 92-93 (2d Cir. 2003 ) ( concludi ng that ph rase “a ny cour t” is am bigu ous a s to inclus ion of fo reign c ourts ); Cheu ng v. Unite d States , 213 F.3d 82, 90-91 (2d Cir . 2000) (observing that phrase “any foreign government ” is ambiguous as to i nclusi on of Hong Kong wh ere s tatut ory ter ms “ne ither com pel n or e xclu de” com petin g in terp retat ion s).

c. RE SPA ’s St ructur e, Pur pose , and H istory Do No t Clea rly Res olve th e Te xtual A mb iguity Whe n the te xt of

a stat ute is ambiguous, we l ook to “st ructur e, purpos e, an d h ist or y” to dete rmine whether

these cons truction devices c an convinci ngly resol ve the ambigui ty

at Chevron step one. General Dynamics Land Sy s., Inc. v. Cline , 540 U.S. at 600 . A high le vel of clari ty is neces sary

to res olve te xtual ambiguity i n this manner. At t he f irst step o f Chevron analy sis, a court’ s task i s not t o infer what Con gress might have sa id about t he issue in disput e if i t had consi deredthe m atter; a co urt dec ides o nly “w hethe r Co ngre ss has directly spoken to [that] pr ecise que sti on.” Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. at 842. Thus, we employ traditional tools of constr uction to determi ne only if the y compel a parti cular

con clus ion as to Co ngr ess’ s inte nt. See PensionBenefit Guar. Corp. v.7 As ena cted by C ong ress , RE SP A c ont aine d no sub sec tion titles. See RESPA , Pub.

L. No . 93-5 33, § 8 (b), 88 Stat. 1724, 1727 (1974). Accordingly, we note ti tles only for ease of refe ren ce, w itho ut g ivin g th em inter pre tive w eigh t. See United S tates Nat’l Ban k of O r. v. Ind epe nde nt In s. A gen ts of Am ., Inc. , 508 U.S. 439, 448 & n.3 (1993) (s tating that Statut es At Large const itut e “legalevidence of l aws” unless Congre ss has expr essly ena ct ed U.S. Cod e title as positive law). -18- LTV Corp. , 496 U .S. 633 , 649 ( 199 0); see also Ge ner al D ynam ics L and Sys., Inc. v. Cline , 540 U.S . at 586 , 590 ( obse rving that “ interpre ti ve c lues ” sp oke “alm ost u nan imo usly,” establ ishi ng Co ngre ss’s inten t “beyon d reas onab le dou bt”); FDA v. Brown & W ill iamson Tobacco Corp. , 52 9 U .S . 120, 143, 158 (2000) (c oncluding t hat Congress ’s prec lusi on of agencyposit ion was “ines capable” and “un mistakab le”); cf. JapanWhal in g Ass ’nv. Am. Cetacean Soc’y , 478 U.S. 221, 240 (1986) (obs er ving that “scatte red sta teme nts” in legis lative history “hinting at” cong ressional intent are insufficient to resolve am biguity). In th is ca se, th ey do not . (1) Structure RESPA is struc tured s o that Sec tion 8, entitled “Prohibiti on against kickbacks and unearnedfees,” is di vided i nto thre e su bpa rts. S ectio n 8( a), en titled “B usin ess r efe rrals ,” 7 proh ibits payment s for re ferral s withi n t he re al es tate se tt le ment bus in es s. 12 U. S. C. § 2607(a). Section 8(b) , enti tled “ Sp litting cha rge s,” is t he p art at issu e in th is ca se. Id. § 260 7(b). A s alread y noted, it p rohib its any per son from givi ng or accept ing not only any split charge for whic h no servi ces were perfor med, but als o any por

tionor percent age of an unearned charge. Section 8(c), enti tled “Fees, sal aries, com pen satio n, or oth er p ayme nts,” specifi es that c ertain bona fide servi ce fees and di sclose d referr al fees are notprohibi ted by-19-

RE SP A. Id. § 2607 (c). Chase argu es that, togethe r, t hese subsec tions support an inter pretation of § 8(b) that protec ts consumers fr om unearned fees only when included i n charges di vided among two

or more persons. Because the r eferralfees refe renced i n subsect ion (a) and the saf e harbor creat ed by subs ecti on (c) appear to r eference fees invo lving two or more parti es, Chase urges

us to con clude that C ong ress ne cessa rily intende d sub section (b) to p rohib it un earned fees only when c ha rges were di vided among multiple pers ons. However plaus ible t his re ading of the statu tory structu re, it is no mo re com pelling than C hase ’s simila r readin g of the tex t. It is equal ly

plausible that Co ngre ss cou ld hav e inten ded R ES PA § 8(b ) to pro hibit behavior sepa rate and dist inct f

rom subsect ion (a). Moreover, it s decis ion not t o provide a s afe harbor for unearned fees in subsec tion ( c) makes equalsense wh ether s uch fees are divide d or n ot. Because the structur e of the statute does n ot speak u namb iguously to Con gress’s intent with res pect t o undivided une arned fees, it cannot res olve te x tualamb iguity at Chevron step one . Cf. FDA v. Brown & Willi amson Tobacco C o rp. , 529 U.S. at 133-43 ( rejec ting age ncyinterpre tation a t Chevron step one as “incompatible with” and “precluded” b y “coheren t regulatory scheme ”). (2) Purpose In RESPA , Congress identi fied two concerns requi ring “ signi fi cant re forms in t he real est ate settlem ent pro cess” : (1) pro viding cons um ers w ith “gre ater an d m ore tim ely informat ion on the nat

ure and cost s” of that

process, and (2) pr oviding consum ers w ith “protec t[ion] from unnecessarily high sett lement charges caused by certa in abusi ve-20-

pra ctice s.” 12 U .S.C. § 260 1(a). To ad dress these co ncerns, C ongress ide ntified RE SPA ’s purpose as four-fold: (1) “ more effective adv ance disclosu re to hom e buyers and se llers of sett lementcos ts,” (2) “the eli mination of kickbacks or referral fees that tend to increase

unn ecess arily the c osts of c ertai n se ttlem ent s erv ices ,” (3 ) “ a r edu ct io n i n the amoun ts home buyers are required to pl ace in es crow accounts e stabl ished t o insure the pay ment of real estate taxes and insurance, ” and (4) “r efor m and modernization of loc al rec ordkeeping of landtitle inf

ormation. ” Id. § 26 01( b). Pointi ng to the a bsence of anyreferenc e to undivi ded unearnedfees in t

his st atement of pur

pose, t he Fourth Cir cui t has c oncl uded that RESPA § 8(b ) is lim ited t o di vid ed fees . See Boulware v. Cross land Mortgage C orp. , 291 F.3d at 268. We are not c onvinced, howev er, th at Congress ’s si lence on t he issue of undivide d unearnedfees d emo nstrates its direct c onsid eration of the issue, m uch le ss its clear intent to exclude such charg es fro m the protec tions § 8(b) a fford s con sum ers. First, as th e Supr eme Court has recogniz ed, “statuto ry prohib itions o ften g o beyon d the p rincipa l evil [ident ifie d byCo ngre ss] to co ver rea sona bly com parab le evils, an d it is ulti mately the provi sions of our laws rather

than the principal concer ns of ourlegislators by which w e are governed.” On cale

v. Sundowner Offshore Servs. , Inc. , 523 U.S. 75, 79 (1998). Indeed, RESPA pr ovisio ns, such as the prohibi tion on charges for the p rep arati on o f tru th-in -len din g sta tem ents , see 12 U.S .C. § 2610, go beyond the stated stat utory goal t o eliminate kickbacks and referral fees. Second, al th oug h RESP A’s st at eme nt of purpose nowhere r eferences undivided une arned fees, the pro hib it ionof s uch f ees is cons is te nt wi th RES PA’s overallgoal to protect8 The Senate bi ll was pas sed in l ieu of the House bill , and the House Conference

Repo rt ma kes no m entio n of the p rov ision that b eca me § 8( b). See S. R ep. N o. 9 3- 866 (1974), as rep rinted in 1974 U.S.C.C.A.N. 654 6; H.R . Rep. N o. 93-152 6 (1974 ) (Conf . Rep.), as rep rinted in 1974 U.S.C.C.A.N. 6569. -21- consum ers fr om “ab usiv e pr actic es” that r esu lt in “ unn ece ssar ily high settle me nt ch arg es.” 12 U.S .C. § 2601(a). In short , thi s is not a case where one r eading of ambiguous text c an be ruledout because i t wo ul d ha rm the v ery cla ss th at C ong ress inten ded to p rote ct. See General Dynamics Land Sy s., Inc. v. Cline , 540 U .S. at 58 6 (reac hing that co nclus ion w ith respect to age ncy’s construction of Age Discrimina tion in Em ployment A ct). Because RESPA ’s st ated purpos e neither requi res that § 8(b) be const rued to pro hibit undivided

unearnedfees n or pre clude s that inte rpretatio n, it does not r ender the stat utory text

unam bigu ous a t Chevron step one. (3) Legislative H istory Thi s court has general ly been rel uctant

to employ

legis lative hist oryat st ep one of Chevron analy sis, see Coke v. Long Isl and Care at Home, Ltd. , 376 F.3d at 127 & n.3, mindful that t

he “int erpretive cl ues” to be f ound in such hi story

will r arely

speak with suffici ent clari ty

to permit

us to c onclude “be yond r easonable doubt” that Congress ha s directly spoken to t

he preci se quest ion at iss ue, General Dynami cs Land Sys. , Inc. v. Cli ne , 540 U.S. at 590, 600. This c ase is no excepti on. The leg islative h istory of R ES PA § 8(b ) is set fo rth mo st autho ritatively in Se nate Repo rt No . 93- 866 (19 74) , as rep rinted in 197 4 U. S. C. C. A. N. 6546. 8 The S enate R eport describes Section 8 (then numbered Section 7) as follows:-22-

PROHIBITI ON AGAINST KICKBACKS AN D UNEARN ED FEES Section7 is i ntended t o prohibi t allkickback or referr al f

ee arra ngem ents wherebyany pay

ment is made or

“thing of

value” fur

nished for

the ref erralof real estate settlement business. The secti on also prohibits aperson or company that re nde rs a s ettl ement s ervi ce f ro m giving or

rebating any por

tion of t he charge to an y o ther pers on except i n retur n for services ac tually per formed. Rea sona ble payments in retur n for services actual ly performed or goods actual ly furnis hed are not

intende d to be prohibited. In a number of areas of the coun try , com petitive forc es in t he convey ancing industry have led t o the pay ment of refer

ral fe es , kic kb acks, r ebates, and unearnedcommissions as ind ucem ents to pers ons who are in a pos iti on to refe r sett lementbus ines s. Su ch p ayme nts ta ke v ario us f orm s. Fo r ex am ple, a title insuran ce c om pany m ay give 1 0% or m ore o f the title in suran ce pre mium to an attor ney who mayperform no ser vices for the title insurance company other than placin g a tele pho ne ca ll to the company or fil ling out

a simple a

pplication. A discount

or allowance for

the prompt payment

of a ti tle insurance pr emium or other charge for a s ettl ement servi ce maybe given to realtors or lenders as a rebate for the pla cement of busi ness with t he indivi dual or company giving the di sco unt . A n a tto rn ey m ay g iv e a po rtio n o f h is fee to an ot he r a tto rn ey, lende r, or real tor who simpl y r efers a pr ospecti ve cli ent to him. In s om e instances, a “co mmission” may be paid by

a title ins urance company to a c orporat ion that i s wholly -owned by one or more savings and loa n associations, even though that corpor ation pe rforms no subs tanti al ser vices on be ha lf o f th e ti tle in su ra nc e c om pa ny. In all of these i nstances , the payment or thing of va lue furni shed bythe pers on to whom the settl ement busine ss is referr ed tends t o increa se the cos t of sett lementservic es w ithout p rovid ing an y benefits to the h om e buyer. W hile the making of such pay ments may he retofor e have been n ecessaryfr om a competit ive standpoi nt in or der to obt ain or re ta inbus in es s, andinsom e areas may even be permit

ted by stat e law, i t is the int ention of secti on 7 to pro hibit such payments, kickbacks, rebat es, or unearned commissions. Id. at 6551. The examples i dentif

ied in t he Senate Report

all a ppear to r eference charges divided among mu ltiple per sons . Such exam ples, ho we ver, ca nno t by them selves com pel a-23-

conclusi on that Congre ss dir ectl y cons idered and c learly rejec ted a prohibiti on of undivide d

une arn ed fees . See Pension Benefi t Guar. Corp. v. LTV Corp. , 496 U.S . at 64 9, rev’g 875 F.2d 1008 (2d Cir. 1989). When the Pen sion B enef it case w as before this court, we noted passages in ER ISA’s leg islative historyindicating t hat Congress had consider ed a parti cular circumst ance a valid basi s for re storation of pe nsion pl ans but had made no menti on of another possibl e circ umstance. We reasoned that , because the second circumstance was “not among the bases for

rest orati on byMembers of Congress, t hat body must have intended that the exist ence of [that

second circumstan ce] not be a reason for rest oring pens ion plans .” Id. (emp hasis in origi nal) ( summarizi ng analy sis appe aring at 875 F .2d at 1017 ). The S upr eme Cou rt rev erse d, ruli ng that t he legi slat ive his tory

did not “c ompel” such a nar row inter pre tatio n of

the s tatut e. Id. The Court explained: [T]he language of a s tatut e — pa rti cular ly language expr essly

granting an agencybroad authority

— is not to be reg arded as modif ied by examples set forth inth e l eg is lative hi st ory . A n example, after all, is just that: an illustration of the statute’s oper ation in practic e. It is not, as the C ourt o f A ppea ls appa rently tho ugh t, a de finit ive in terp retat ion of a statu te’s s cop e. We see no suggesti on in the legislative history that Congre ss int ended it s li st of exampl es to be exhaus tive. Unde r these circum stances, we conclud e that ER ISA’s legis lative history do es no t sugg est “cle ar con gressio nal i ntent” on the qu esti on of follow-on [pension] plans. Id. In th is ca se Con gr es s h as si mi larlygr an te d RES PA’ s a dmi ni st er in g a ge nc y , H UD, broad authori ty

“to pres cribe such rules and regulations” and “to make such interpr etat ions

. . . a s may be necessary to achiev e the purpo ses” of the statute. 12 U.S.C . § 2617. In these circumstances, Pen sion B enefit does not p ermit u s to conclude, merely from the abse nce of-24-

an example of undivi ded charges in RESPA ’s le gisl ative hist ory , that Congress t hereby expresse d its clear intent that § 8(b) not protect consu mers from any unearned fees except those refle cted i n divided c harges. The legis lative hist orymay demonstrate thatCon gress’s primary concern was divi ded charges, but that does not convincingly

establ ish that Congress “inte nded its l istof examples t o be exhausti ve” or “sugges t ‘cl ear congre ssionalintent ’” not to pro tect c ons um ers f

rom und ivid ed u nea rne d fe es. Pens ionBenef it Guar. Corp. v. LT V Corp. , 496 U.S . at 64 9. Because neithe r the structure, purpose , nor legislative history of R ES PA § 8(b ) clearly resol ves the ide ntif

i ed text ual ambigui ty

with res pect t o undivided une arned fees, we proceed to the s econd step of Chevron analysi s.

d. HUD Rea sona bly Const rues R ES PA § 8(b ) to Pro hibit Undivided Unearned Fees At Chevron step t

wo, we will defer

to a rea son able agenc y i nterpr etat ion of ambiguous statutory lan guag e “w hen it a ppea rs that C ong ress ha s deleg ated a utho rityto the agencygeneral ly

to make rul es carr

yi ng the forc e of law, and t hat the agencyinter

pretation clai ming de fer ence was promulgat ed in the exerci se of that authori ty .” United Stat es v. Mead Corp. , 533 U. S. 218, 226-27 (2001). A s previously noted, 12 U.S.C . § 2617 c onfers such autho rity on H UD . Mo reov er, in Kruse v. Well s Fargo Home Mortgage, Inc. , 383 F.3d at 58-61, t

his court rul ed that

HUD actedpursu ant to th is autho rity in prom ulgatin g its Policy9 The Policy Statement

was not promulgat ed by HUD pursuant t o notice -and-co mme nt rulemaki ng; nev erth eles s, Kruse concludedthat it refl ected suf fici ent agencyconsider ation and applic ation o f exp ertise to m erit Chevron deferen ce. See Kruse v. Well s Farg o Home Mortgage, Inc
. , 383 F.3d at 58-61. -25- Statement

re specti ng § 8(b). 9 We now hold that H UD ’s Po licy Statem ent rea sona bly interpre ts § 8(b ) com preh ensiv ely to proh ib it un earned fees , whether r eflect ed in a charge divided among multipl e parti es or an undi videdcharg e from a sing le lend er, as in th is case. In determi ning that

the stat utory referenc e to “any

porti on, spl it, or percent age of anycharge ” gives rise to an ambiguity as to Congress’s intent, we have already observed that the phrase

can plaus ibly be co nstrue d to sweep broadly , prohibiting unearned fees regardl ess of whether

or not they

are divi ded. The st

ructur e, pu rp ose, an d histo ry of R ES PA do n ot clea rly dem onstra te that Congre ss consi dered and re j ected such a con struction . Thu s, even if Con gress’s focus in pr opounding § 8(b) w as on un earned fees that the lending industry was routine lyincorpor ating into divi ded charg es, the sta tute can re ason ably be c onstru ed also to reach und ivid ed u nea rne d fe es. S uch an o utco me is ha rdly un usu al. “[S]t atutor y pr ohibitions often go b ehi nd t

he p ri ncipalevi l” pr omp ting cong ression al action “to co ver rea sona bly

com parab le evils .” Oncale v. Sundowner Offshore Ser vs., Inc. , 523 U.S. at 79. Fr om the perspective of thos e co nsum ers wh om C ongress so ught to protec t through § 8 (b), HU D’s inter pretation has the vi rtue of making that

protection depend sol ely on the fact th at a fe e is

un ear ne d, no t onwh et

he r t he l en de r ke ep s 9 9. 9% o f t he ch arge r at

he r t han 1 00 %. In a foo tnote to its main brie f, Ch ase arg ues th at HU D’s in terpreta tion is u nreas onab le because it i s an unexplai ned change from the agency ’s previ ous pos ition

. See M otor V ehicle-26-

Mfrs. Ass’n v. Sta te F arm M ut. A uto . Ins. C o., 463 U.S

. 29, 42 (198 3) ( “An agency changing its course . . . is obl igat ed to suppl y a r easoned anal ysi s for the change bey ond that whic h may be required . . . in the first instance.”). We are not convinc ed. In t he 1976 edit ion of its

consumerinform ation b ook let, wh ich H UD is requ ired by law to distribu te to borrowers and lenders, see 12 U.S.C. § 2604, the agencyadvised t hat it is “i llega l to charge or acc ept a fee

or part of afee where no servi ce has act ually been performed, ” 41 Fed. Reg. 20, 280, 20,289 (1976). The 1997 editi on of the i nformat io n booklet s imil arly stat es: “I t is also i llega l for anyone to accept

a fee or par

t of a fee for

servic es if tha t perso n has not ac tually performed sett lementservi ces for t he fee.” 62 Fed. Reg. 31,982, 31,998 (1997) . Thu s, e ven be fore adopting the 20 01 P oli cy St atement r elie d on by Cohen in t his cas e, the agencyhad

cons istently taken the po sition tha t § 8(b ) proh ibits un earne d fee s, in w hole o r in par t. At oral arg um ent, C hase furthe r challe nged the rea sona ble ness of H UD ’s inter pretation by poi nting t o a possibl e anomalous re sult in that a lender could be liabl e under RESPA § 8(b) for

charging an unearned $225 post -clos ing fee but, unde r Kruse , coul d not be liabl e if it cha rged a bor row er $2 25 m ore fo r a serv ice tha t was actua lly provid ed. Se e Krz alic v. Republi c Titl e Co. , 314 F. 3d at 880 (di scussi ng simil ar hy potheti cal). We have

no occa sion to consider the le galit

y of t he latter ac tion on t

his appeal . But, even assuming that Chase is cor

rect, the fact

that § 8(b) does not

safeguard ag ainst all means by which unscrupul ous lende rs cou ld imp ose “ unn ecess arily high settl ement charges” on consumers, 12 U.S .C. § 2 601 (a), doe s not re nder unre ason able H UD ’s interp retation with respe ct to undivided

unea rned fees. “ ‘The Sup reme Co urt rep eated lyhas inst ructed t hat nei ther t

he fact-27-

that a class ific ation may

be overinc lusi ve or un derinc lusive n or the fact tha t a general izat ion underlying a class ific ation i s subjec t to exc eptions renders the cl assif icat ion ir rati on al.’ ” Chen v. Ashcroft , 381 F.3d 22 1, 227 (3d Cir. 2004) (Ali to, J .) ( quoting Lofton v. Sec’ y of the Dep’t of Children & Family Servs. , 358 F.3d 804, 822- 23 (11th Cir. 2004 )). So too, mere

o v erinclusiveness or underi nclusi veness i s insuff icie nt to r ender an agency inter pretation

unre ason able a t Chevron step two . See id. Because we determine t

hat HU D re ason ably constr ues RESPA § 8(b) to prohibit “one servi ce provider ” from chargi ng the consumer a fee for which “no

. . . work is done, ” Policy Statem ent, 66 Fed. Reg. at 53, 057, we defer t o that interpr etat ion and conclude that Cohen adeq uately states a c laim under RESPA § 8(b) by alle ging that Chase coll ected an undi vided unearnedfee. Accordi ngly , we vacate t he Rule 12(b)(6 ) dismi ssal of this part of he r

com plaint. B. Co hen’ s State L aw Claim Cohen further

appeals t

he dismis sal of her de ceptive practices c laim und er New York General Bu siness L aw § 34 9. W e revie w th at dism issal de novo

. See Broder v. Cabl evisi on Sys. Corp. , 418 F.3d 187, 193 -94 (2d C ir. 2005). Section349 stat es: “Decept ive act s or prac tice s in the c onduct of any business , tr ade

or commerce or in t

he furnis hing of any

servi ce in this st ate ar e hereby declar ed unl aw ful.” N. Y. Gen . B us . L aw § 349. A § 349 clai m has three e lements: (1) the defendant’ s chall enged acts or practi ces must have be en direc ted at consumers, (2) the acts or practi ces must have been misleading in a material way, and ( 3) the pl ainti ff must have sustain ed inju ry as a resu lt.-28-

See M aurizio v. G oldsm ith , 2 30 F. 3d 5 18, 521 (2 d Ci r. 20 00) (ci ting Osw ego Laborers’ Local 214 Pension Fund v. Marine Midland Bank , 85 N.Y.2d 20, 623 N.Y.S.2d 529 (1995)). A s ucc essf

ul p laint iff c an r eco ver bot h tre ble d am age s an d atto rne y’s fee s. See N.Y. Gen. Bu s. La w § 349 (h). The elem ent at issu e on th is app eal i s the requisite misleading act. The N ew Y ork Cou rt of Appeals has adopt ed an objective defin it ion of “misl eading, ” under which the alle ged act must be “likely to misl ea d a reasonabl e consumer act ing reas onably under the circu ms tanc es.” Oswego Laborer s’ Lo cal 2 14 Pension Fund v. Marine Midland Bank , 85 N.Y.2d at 26, 623 N.Y.S.2d at 532-33 . The dis tri ct court conc luded that the $22 5 po stclosi ng fee c om plaine d of in this ca se co uld n ot be o bjectiv ely mislea din g because i t had been disclosed prior to c losing. New York law offers som e suppo rt for this c onc lusio n. See Zuckerman v. BMG Direct Mktg. , Inc. , 290 A.D.2d 330, 737 N.Y.S.2d 14 (1st Dep’t 2002) (holdi ng shippi ng and h andlin g fee s not d ecep tive w here a mo unts d isclose d); Sands v. Ticketmast er-New Yo rk, I nc. , 207 A.D.2d 687, 616 N.Y.S.2d 362 ( 1st Dep’ t 1 994 ) ( sa me

re: discl osed ticket se rvice fees); Lewis v. HertzCorp. , 181 A.D .2d 4 93, 581 N.Y.S.2d 305 (1st Dep ’t 1992) (sam e re: disclosed ren tal car refueling fe es). In none of these ca ses, ho wever, did t he courts have occasi on to consi der fees prohibi tedby other substantive laws. As Ch ase concedes, New York courts have held that colle cting fees in viol ation of other fe deral or

stat e laws may s atis fy t he mislea ding ele ment of § 34 9. See Negrin v. Norwest Mortgage, Inc
. , 263 A.D.2d 39, 50, 700 N.Y.S.2d 184 , 193 (2d Dep’t 1999) ( “Allegat ions of a bank’s uni late ral i mpositi on of ill egal and/ or unwarrant ed-29-

fees upon its customers stat e a vali d clai m [under § 34 9].”); Bartolomeo v. Runco , 162 Misc. 2d 485 , 490, 616 N. Y.S.2d 695, 699 (Yonkers City Ct. 1994) (hol ding repr esentation that “cell ar apartment

was a legal a partmen t . . . was false, misleading a nd dec eptive” un der § 349); cf. Lum v. New C entury Mortgage Corp. , 19 A.D.3d 558, 559, 800 N.Y.S.2d 408 , 410 (2d D ep ’t 2 00 5) (h ol di ng “n o m ate ria lly m isl eading statem ent” u nder § 34 9 w here yield spreadpremium disc losed t o plaintiff was not “pe r se il legal ”) . Cert ainly , Chase does not suggest that, in the a

bsence of

indications to the c ontrar y, a consumer might

not rea sona bly

as sum e that all fees charge d by a resp ected finan cial institutio n suc h as C hase we re lega l. We expr ess no opin ion as to whether Cohen will , in fa ct, show that the challe nged $22 5 po stclosi ng fee viol ates RESPA § 8(b), but while she pursue s that clai m, we cannot conclude simp lyfrom the fact

of discl osure that, as a matt er of law, the cha rge cannot consti tute a decepti ve pract ice i n violation of § 349. A cc or di ng ly, we vaca te the dism issal of Co hen’ s § 34 9 claim . We furthe r note th at, upon remand , the district court should al low Cohen to amend herstat e law clai m to include her b elated alle gation t hat pay ment of the cha llenge d post-c losi ng fee was coerced by the threat of forfei ting a $425 non- refundabl e appli cati on and apprai sal fee

. Wh ateve r the m erits of th is coe rc io n cl ai m, it cannot be rejected as a matter of law at this very early

stage of t

he litigati on. III. Conclusion To summarize: 1. We defer t o HUD ’s int erpret ation of RE SPA § 8(b ) to prohibi t unearne d fees-30- whether reflected in divided or undivided charges. 2. Because th e p os t-c lo sin g fee ch all en ge d i n t hi s c as e m ay v iola te RE SPA , its disclosure to the pl ainti ff before p ayment does not pr eclude a cl aim for decepti ve busines s pract ices under New Y ork General Busi ness Law § 349. The judgments of t

he dist rict court, entere d on March 16, 2005, andJanuary 4, 2006,

are VAC ATED , and the case i s hereby REM AND ED for reinst atement of t he complaint

and further proceedi ngs consis tent wit h this opinion.