Litigation and Court Decisions

In a blog post published at the end of last week, the CFPB announced that its payday lending rule (Rule) would go into effect on March 30, 2025.  Because the Rule’s ability to pay requirements were rescinded, the only remaining provisions of the Rule are its “payment provisions.”  Those provisions:

  • Prohibit lenders from attempting to withdraw payment for a covered loan from a borrower’s account after two consecutive attempts have failed due to lack of sufficient funds, unless the borrower specifically provides new authorization to do so; and
  • Require lenders to give consumers certain notices, such as advance notice before attempting to withdraw a payment for the first time and notice of the consumer’s rights when two consecutive payment attempts fail.
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On May 16, 2024, the U.S. Supreme Court ruled that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part I, we first discuss the SCOTUS decision, the status of the CFPB’s payday lending rule that was at issue in the underlying case, and a potential new challenge to the CFPB’s funding that has been the focus of recent attention.… Continue Reading

If this blog post gives our readers a feeling of déjà vu, there’s a good reason—the latest developments in the lawsuit challenging the CFPB’s final credit card late fee rule (Rule) are a rerun of earlier developments in the case.  In response to an emergency petition for writ of mandamus and administrative stay of transfer filed by the plaintiffs in the lawsuit, the Fifth Circuit stayed the latest district court order transferring the case once again to D.D.C. … Continue Reading

Last month, just a few days before the preliminary injunction hearing, Colorado’s attorney general filed a Motion to Dismiss the Complaint filed in federal district court in Colorado by three financial services industry trade groups challenging Colorado’s statute purporting to opt out (slated to take effect July 1, 2024) of a federal law that permits FDIC-insured state-chartered banks to “export” interest rates on interstate loans. … Continue Reading

On June 5, 2024, Minnesota Bankers Association and Lake Central Bank (“Plaintiffs”), filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit to appeal the Minnesota federal district court’s April 9, 2024 dismissal of the Plaintiffs’ lawsuit against the Federal Deposit Insurance Corporation (FDIC) challenging the FDIC’s guidance on non-sufficient funds (NSF) fees.… Continue Reading

Special guest Professor Hal Scott of Harvard Law School joins us today as we delve into the thought-provoking question of whether the Supreme Court’s recent decision in the landmark case of CFSA v. CFPB really hands the CFPB a winning outcome, or does the Court’s validation of the agency’s statutory funding structure simply open up another question: whether the CFPB is legally permitted to receive funds from the Federal Reserve if (as now) the Fed has no earnings.… Continue Reading

On May 30, 2024, in a unanimous decision, the Supreme Court reversed Cantero v. Bank of America, N.A., and remanded it back to the Second Circuit and instructed the appellate court to analyze whether New York’s law requiring interest to be paid on mortgage escrow accounts is preempted under the Dodd-Frank Act by applying the Barnett Bank standard.… Continue Reading

In a replay of earlier events, in response to an emergency petition for writ of mandamus and administrative stay of transfer filed by the plaintiffs in the lawsuit challenging the legality of the CFPB’s credit card late fee rule, the Fifth Circuit Court of Appeals on May 29, stayed a District Court order that would have transferred the case to the District of Columbia.… Continue Reading

(As a refresher, if you forgot where things stood the last time you read one of our blogs related to the CFPB credit card late fee rule litigation, click here.)

On Friday May 24, in response to the CFPB’s motion requesting the Fifth Circuit to accelerate the issuance of its mandate from July 9, 2024 with respect to its earlier dismissal of the plaintiffs’ appeal, the Fifth Circuit ordered that the mandate be issued “forthwith.”… Continue Reading

On May 16, Justice Thomas issued the majority opinion in which the Supreme Court held, by a 7-2 vote, that the CFPB’s funding mechanism comported with the Appropriations Clause of the Constitution which states, in relevant part, in Article I, Section 9, Clause 7:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law…”

Specifically, Justice Thomas held:

“Under the Appropriations Clause, an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes.… Continue Reading