The defendants in the lawsuit brought by Benjamin Lawsky, the Superintendent of the New York Department of Financial Services, using his Dodd-Frank enforcement authority have filed an appeal with the U.S. Court of Appeals for the Second Circuit. Under Dodd-Frank Section 1042, a state AG or regulator is authorized to bring a civil action for a violation of the Dodd-Frank prohibition of unfair, deceptive or abusive acts or practices.
The defendants, a large subprime auto lender and its individual owner, are seeking to overturn the district court’s order denying their motion to modify a preliminary injunction entered by the court freezing the defendants’ assets and enjoining them from engaging in new loan business. In their motion, the defendants also sought to reduce the fees of the receiver appointed by the district court. The defendants must file their brief by December 8.
In addition to Mr. Lawsky’s lawsuit, we have also been following lawsuits filed by the AGs of Illinois and Mississippi using their Dodd-Frank enforcement authority.