The U.S. Chamber of Commerce has filed a motion for summary judgment in its lawsuit filed in September 2022 against the CFPB challenging the CFPB’s recent update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of its examination manual to include discrimination.  The other plaintiffs in the lawsuit, which was filed in a Texas federal district court, are American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Longview Chamber of Commerce, Texas Association of Business, and Texas Bankers Association.

The plaintiffs argue first that they are entitled to summary judgment based on the decision in Community Financial Services Association of America Ltd. v. CFPB, in which a Fifth Circuit held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution.  They assert that they can show harm resulting from the unconstitutional funding because without such funding, the Bureau lacked the means to issue the manual update or exercise any authority over discrimination. 

While arguing that they are entitled to have the Court set aside the manual update and permanently enjoin the CFPB from taking any action based on it based on the CFSA decision, they also ask the Court to hold that they are entitled to those remedies under the Administrative Procedure Act (APA).  According to the plaintiffs, a ruling on their APA claims will preserve resources and avoid harm to plaintiffs’ members because, “whatever the Supreme Court decides in Community Financial, Plaintiffs’ members will be protected from irreparable harm and this case will be ready for appellate review.”  (The CFPB has filed a certiorari petition seeking review of the CFSA decision and asked the Supreme Court to hear the case this Term.)

As previously set forth in their complaint, the plaintiffs claim that the manual update violates the APA and should be set for the following reasons:

  • The update exceeds the CFPB’s UDAAP authority in the Dodd-Frank Act because such authority does not encompass discrimination.
  • The update is “arbitrary and capricious” because the CFPB’s interpretation of “unfairness” contradicts the historical use and understanding of the term.
  • The update violates the APA’s notice-and-comment requirement because it is a legislative rule that imposes new substantive obligations on regulated entities.