The plaintiffs in the lawsuit filed in Massachusetts federal district court challenging the CFPB’s creation of its Taskforce on Federal Consumer Financial Law have filed their opposition to the CFPB’s motion seeking the lawsuit’s partial dismissal.

The CFPB created the Taskforce in October 2019 to examine ways to harmonize and modernize federal consumer financial laws.  The Taskforce is charged with examining the existing legal and regulatory environment for consumers and financial services providers and making recommendations to the Bureau’s leadership for improving consumer financial laws and regulations, with a focus on harmonizing, modernizing, and updating the enumerated consumer credit laws, and their implementing regulations.

The plaintiffs in the lawsuit are the National Association of Consumer Advocates (NACA), U.S. Public Interest Research Group (U.S. PIRG), and Professor Kathleen Engel.  Professor Engel, currently a Research Professor of Law at Suffolk University, unsuccessfully sought membership on the Taskforce.

The plaintiffs’ complaint included the following claims:

  • First Claim: The Bureau did not meaningfully consult with the General Services Administration (GSA) before creating the Taskforce or satisfy other requirements of the Federal Advisory Committee Act (FACA) regulations.
  • Fourth Claim: The Bureau failed to comply with FACA’s requirement that an advisory committee be “fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee.”

In its motion for partial dismissal, the Bureau asked the court to dismiss the plaintiffs’ first and fourth claims and dismiss the following elements of their prayer for relief: a declaration that the creation and establishment of the Taskforce is unlawful; setting aside the Taskforce’s charter and appointments of Taskforce members, an injunction barring the Taskforce from meeting, advising the Director, or otherwise conducting business, and an injunction barring the Bureau from relying on or using any Taskforce recommendations or advice.

In their opposition to the Bureau’s motion to dismiss, the plaintiffs make the following arguments:

  • The CFPB asserted that the plaintiffs do not have standing to challenge the procedures used by the Bureau to establish the Taskforce because they have not identified any way in which the Bureau’s failure to follow such procedures caused the informational injury they claim—preventing them from studying the Taskforce and reporting on it to the public—or shown that they were deprived of information the Bureau was required to provide.  In their opposition, the plaintiffs claim that the Bureau failed to publish various findings regarding the Taskforce’s formation as required by the FACA, including that the Taskforce is in the public interest.  According to the plaintiffs, the Bureau’s creation of the Taskforce in a non-transparent manner that deprived them of required information impedes NACA’s and U.S. PIRG’s ability to conduct mission-driven educational activities and prevents Professor Engel from carrying out her academic work.
  • The CFPB asserted that the plaintiffs do not have standing to challenge the Taskforce’s membership.  With respect to the rejection of Professor Engel’s application for Taskforce membership, the CFPB argued that she had no entitlement to Taskforce membership and the relief sought by the plaintiffs would not result in her addition to the Taskforce or otherwise redress the denial of her application.  In their opposition, the plaintiffs assert that it is not relevant whether Professor Engel had an entitlement to membership and that she suffered a constitutionally cognizable injury by the loss of an opportunity to have her membership application fairly adjudicated.  They also claim that the alleged injury to her would be redressed by dissolution of the Taskforce because her injury is not limited to exclusion from the Taskforce but also includes the “ongoing operation of a secretive, unlawful committee.”  With respect to the CFPB’s argument that the plaintiffs’ speculation about possible consumer harm resulting from hypothetical Taskforce recommendations is not sufficient to establish standing, the plaintiffs assert that the complaint states “a plausible claim that the Taskforce will recommend policies adverse to Plaintiffs’ interests” because “each of the Taskforce’s current members is a staunch opponent of consumer protections.”
  • The CFPB asserted that the plaintiffs’ remaining claims (that the Bureau violated FACA by failing to give notice of Taskforce meetings and make records publicly available) do not give the plaintiffs standing to seek declaratory or injunctive relief that would shut down the Taskforce and preclude the Bureau from using its recommendations.  In their opposition, the plaintiffs assert that there is no basis to dismiss any part of their prayer for relief because they have standing to assert all of their claims and, in any event, it would be premature to assess on a motion to dismiss whether they are entitled to their requested remedies which might require additional factual development and briefing.