The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) is a U.S. government agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is the first federal agency tasked solely with the mission of consumer financial protection. To this end, Congress has vested it with enforcement, supervisory, and rulemaking authority. In an effort to stay apprised of significant industry changes affected by the CFPB, Burr & Forman’s CFPB Update will serve as a periodic briefing on recent case law, news, and developments related to the CFPB.
Lawsuit Challenging CFPB Leadership Under Mick Mulvaney is Dismissed:
Lower E. Side People’s Fed. Credit Union v. Trump, 289 F. Supp. 3d 568 (S.D.N.Y. 2018)
On February 1, 2018, the District Court for the Southern District of New York (“District Court”) granted the Consumer Financial Protection Bureau’s (“CFPB”) motion to dismiss a lawsuit brought by a non-profit credit union, Lower Eastside People’s Federal Credit Union (“Credit Union”). The Credit Union challenged the legality of President Trump’s appointment of Mick Mulvaney (“Mulvaney”) as Acting Director of the CFPB in a complaint filed on December 5, 2017 that sought a preliminary injunction. The Credit Union argued it had standing because it is regulated by the CFPB, CFPB actions under Mulvaney have harmed the Credit Union’s mission of improving the financial health of underserved communities, “the CFPB’s decision to effectively gut the HMDA rules” will cause the Credit Union economic harm, and because the Credit Union has suffered injury as a result of uncertainty caused by the CFPB’s stated intention to engage in rulemaking regarding the Home Mortgage Disclosure Act (HMDA).
The District Court found that standing was not conferred just because the Credit Union is regulated by the CFPB. Instead, the Credit Union needed to allege a concrete and particularized injury caused by the CFPB under Mulvaney’s leadership. Similarly, the District Court found that the Credit Union did not have standing “based solely on alleged harm to it corporate mission.” The Credit Union’s argument that December 21, 2017 statements from the CFPB would “effectively gut the HDMA” by providing less incentives for banks to invest in community credit unions was also rejected because the statements were issued after the Credit Union’s complaint was filed, and because the Credit Union did not meet the redressability requirement for standing due to its reliance on hypothetical or speculative harm. Finally, the Credit Union’s argument that the CFPB’s December 21, 2017 statements regarding the HDMA caused it harm by having to invest resources in anticipation of alternate disclosure requirements was also rejected because the alleged injury flowing from agency intent was too hypothetical or conjectural to confer standing.
Download the full article, “CFPB Update: July 2018.”