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On November 15, 2018, in response to a November 7, 2018 letter from Republican Senators, FDIC Chairman Jelena McWilliams announced that the FDIC has engaged outside counsel to investigate the Obama-era Operation Choke Point, under which the FDIC and other government agencies pressured banks not to do business with payday lenders. In her letter, McWilliams said that “[r]egulatory threats, undue pressure, coercion, and intimidation designed to restrict access to financial services for lawful businesses…
On September 17, 2018, four Amici filed briefs in the CFPB’s case against All American Check Cashing, which is now before the Fifth Circuit Court of Appeals. The Court is considering whether the structure of the CFPB is constitutional and what impact its structure, right or wrong, has on its ability to continue to prosecute claims against regulated entities. The Amici, all supporting the CFPB, were as follows: Certain current and former Members of
The BCPB has historically taken the position that it can use investigations to conduct compliance “sweeps” of entire industries. Indeed, a version of the BCFP’s Enforcement Policies and Procedures Manual made available to the public through a FOIA request in 2016 stated that: “It is not necessary to have evidence that a law has in fact been violated before opening a formal investigation. That means, for example, that the Bureau could conduct a ‘compliance’ sweep…
It appears that Acting Director Mulvaney’s BCFP is about to settle a case that former Director Cordray’s CFPB filed in 2015 against D&D Marketing, which allegedly engages in lead generation for payday, tribal, and offshore lenders under the name T3 Leads.  Based on the docket, the case appears to have been in active, heated litigation from the time it was filed until just recently.  So, it is not clear why the BCFP would suddenly change…
On June 21, 2018, Judge Preska of the Southern District of New York (“SDNY”) issued a decision finding that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional.  In doing so, the SDNY held that Title X of Dodd-Frank—the title that created the CFPB and established its regulatory, supervisory, and enforcement authority—should be stricken in its entirety. The SDNY went further in finding that Mulvaney’s ratification of the CFPB’s decision to bring the lawsuit was inadequate to cure…
On May 7, 2018, at the Practicing Law Institute’s 23rdAnnual Consumer Financial Services Institute in Chicago, panel members Kristen Donoghue, the CFPB’s top enforcement official, and Allison Brown, from the Bureau’s Office of Supervision Policy, discussed how the Bureau has changed under Acting Director Mulvaney’s leadership, and how it has not changed.  Alan Kaplinsky, who leads Ballard Spahr’s Consumer Financial Services Group, moderated the panel, which also included Chris Willis, the leader of…
On January 31, 2018, the en banc D.C. Circuit handed down its opinion in the PHH v. CFPB case, which we’ve discussed at length. It held, 7 to 3, that the CFPB’s single-director-removable-only-for-cause structure is constitutional but that the CFPB’s interpretation of RESPA was wrong. En Banc Court Reinstates Panel’s RESPA Ruling The en banc Court reinstated the RESPA-related portions of the D.C. Circuit’s October 2016 panel decision. The panel had held that…
On January 30, 2018, the federal district court hearing Leandra English’s action seeking a declaration that she is the lawful Acting CFPB Director granted the parties joint motion to stay further proceedings pending a decision from the D.C. Circuit in her appeal of the district court’s denial of her preliminary injunction motion. Leandra English also filed her opening appeal brief with the D.C. Circuit on January 30.  In her brief, English argued that the district…
On January 26, 2018, the CFPB published a “Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes” (“Request”) in the Federal Register. In the Request, the CFPB asks industry and attorneys who regularly practice before the Bureau to comment on its processes surrounding Civil Investigative Demands (“CID”) and investigational hearings. Comments are due by March 27, 2018 and can be submitted electronically, by email, by regular mail, or by hand-delivery. The…
On January 12, 2018, the U.S. Supreme Court agreed to hear the Lucia case in which Raymond J. Lucia is challenging how the SEC appoints administrative law judges (“ALJs”). He argues that ALJs are “inferior officers” who must be appointed by the President, the courts, or a department head in accordance with the Constitution’s appointments clause. Lucia filed a petition for certiorari with the Supreme Court after the D.C. Circuit rejected his argument. A…