On December 23, 2022, the Consumer Financial Protection Bureau (CFPB) moved for dismissal, or in the alternative partial summary judgment, of the complaint filed by the U.S. Chamber of Commerce in September 2022 in the Eastern District of Texas that challenges the CFPB’s update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of its examination manual to include discrimination. At the same time, the CFPB also opposed the motion for summary judgment filed by plaintiffs U.S. Chamber of Commerce, American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Longview Chamber of Commerce, Texas Association of Business, and Texas Bankers Association on November 29, 2022.
In one of its arguments, the CFPB asserted that dismissal is required because the UDAAP manual is not a final agency action, which is required in order for the court to conduct a review under the Administrative Procedures Act (APA). As the CFPB noted, “while the Manual identifies for examiners the kinds of evidence to collect and what kinds of preliminary factual determinations to make, it does not bind examiners’ assessment of whether any particular conduct should be cited as an unfair practice.”
Further, in response to Plaintiffs’ summary judgment motion, which relied on the Fifth Circuit’s decision in Community Fin. Services Assoc. of Am. Ltd., No. 21-50826 (5th Cir. Oct. 19, 2022) finding the CFPB’s funding structure unconstitutional, the CFPB argued that Community Fin. Services was wrongly decided. However, in light of the fact that the Fifth Circuit’s decision is binding in the Eastern District of Texas, the CFPB argued that in the event the Court denied its motion to dismiss and opted to granted the Plaintiffs’ motion for summary judgment, the order should be limited to the constitutional issue, and the Court should not reach plaintiff’s claims relating to whether the update to the UDAAP section of the CFPB examination manual violates the APA. The Bureau argued that if the court considered the merits of those non-constitutional claims, it would be improperly rendering an advisory opinion.
On January 24, 2023, the CFPB filed its reply in further support of its motion to dismiss emphasizing again that Plaintiffs did not establish that the revisions to the UDAAP Manual were final agency actions, which “sinks” both Plaintiffs’ constitutional and non-constitutional claims.
This litigation is the culmination of a long campaign by the U.S. Chamber of Commerce against the CFPB during which the Chamber has accused Director Chopra of “trying to radically reshape the American financial services sector by breaking time-tested bipartisan norms and skirting the agency’s legal authority.” Oral argument is not yet scheduled on the Chamber’s summary judgment motion or the Bureau’s motion to dismiss.