In its decision last week in Sackett v. Environmental Protection Agency, the U.S. Supreme Court issued a unanimous ruling that severely limits the federal government’s jurisdiction over wetlands and tributaries. Specifically, the Court rejected the Environmental Protection Agency’s (EPA) regulatory definition of what constitutes “Waters of the United States” subject to federal jurisdiction under the Clean Water Act (CWA). … Continue Reading
Litigation and Court Decisions
Housing Market Industry Group Urges Supreme Court to Preserve CFPB’s Mortgage and Real-Estate Regulations Regardless of Constitutional Question’s Outcome
As the financial services industry continues to monitor the proceedings in Community Financial Services Association of America v. Consumer Financial Protection Bureau, an industry group composed of the Mortgage Bankers Association (MBA), National Association of Home Builders (NAHB), and National Association of REALTORS® (NAR) has filed a brief as amici curiae cautioning the Supreme Court against a ruling that could call into question all of the CFPB’s regulations.… Continue Reading
CFPB defends constitutionality of its funding in SCOTUS brief
The CFPB has filed its brief with the U.S. Supreme Court seeking reversal of the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB. In that decision, the panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution and, as a remedy for the constitutional violation, vacated the CFPB’s payday lending rule (Payday Rule).… Continue Reading
SCOTUS to reexamine Chevron deference framework
The U.S. Supreme Court has agreed to hear a case in which the petitioners are challenging the continued viability of the Chevron framework that courts typically invoke when reviewing a federal agency’s interpretation of a statute. While Loper Bright Enterprises, et al. v. Raimondo involves a regulation of the National Marine Fisheries Service (NMFS), the Supreme Court’s decision could have significant potential implications for when courts should give deference to regulations issued by all federal agencies, including the CFPB, FTC, and federal banking agencies.… Continue Reading
This week’s podcast episode: CFSA v. CFPB moves to U.S. Supreme Court: a closer look at the constitutional challenge to the Consumer Financial Protection Bureau’s funding, with special guest, GianCarlo Canaparo, Senior Legal Fellow in the Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies
The U.S. Supreme Court has agreed to review the Fifth Circuit decision in CFSA v. CFPB that held the CFPB’s funding violates the Appropriations Clause of the U.S. Constitution. After reviewing the history of the case from its initial filing to the Supreme Court’s grant of certiorari, we discuss the Fifth Circuit’s interpretation of the Appropriations Clause and the Second Circuit’s conflicting interpretation in its recent decision holding that the CFPB’s funding is constitutional and assess the strength of each interpretation and the reasoning of each decision. … Continue Reading
Texas banking trade group and Texas bank file lawsuit challenging validity of CFPB Section 1071 final rule on small business data collection; Ballard Spahr to hold June 15 webinar
While it has only been a month since the CFPB issued its final rule to implement Section 1071 of the Dodd-Frank Act, the CFPB is already facing a lawsuit challenging the rule’s validity. The lawsuit was filed last week in a Texas federal district court by the Texas Bankers Association and Rio Bank, McAllen, Texas. … Continue Reading
Fourth Circuit holds GAP coverage financed with vehicle purchase is exempt from MLA
In a highly anticipated decision regarding the treatment of Guaranteed Asset Protection (“GAP”) under the Military Lending Act (“MLA”), a federal appellate court has ruled that a hybrid loan that finances GAP coverage along with a motor vehicle purchase is exempt from the MLA’s restrictions. The 2-1 decision on April 12, 2023 by the U.S.… Continue Reading
CFPB pushes the ECOA coverage envelope again
The CFPB has filed a Statement of Interest in a case pending before a Florida federal district court in which the plaintiffs allege that the defendant engaged in discriminatory targeting in violation of the Equal Credit Opportunity Act (ECOA).
In Roberson v. Health Career Institute LLC, the plaintiffs are students at a for-profit nursing school who allege that the school engaged in various unfair and deceptive practices and other unlawful conduct in connection with enrolling students in and operating its “functionally valueless” nursing program. … Continue Reading
SCOTUS decision allowing constitutional challenges to FTC and SEC to be brought in federal district court has broader implications
The U.S. Supreme Court ruled last week that parties seeking to challenge the constitutionality of the structure of the Federal Trade Commission and the Securities and Exchange Commission cannot be required to raise such challenges in the first instance before an administrative law judge (ALJ) and may bring such challenges directly in a federal district court. … Continue Reading
CFPB takes action against payday lender’s CEO for alleged fraudulent transfers to avoid payment of judgment
On April 5, 2023, the Consumer Financial Protection Bureau (CFPB) brought an action against James R. Carnes and Melissa C. Carnes, both individually and as co-trustees of the James R. Carnes Revocable Trust and the Melissa C. Carnes Revocable Trust, for allegedly hiding money through a series of fraudulent transfers in order to avoid paying more than $40 million in restitution and penalties for illegal payday lending activities. … Continue Reading