The Consumer Financial Protection Bureau is being sued over an interim final rule it issued saying that collectors may face prosecution under the Fair Debt Collection Practices Act for not providing written notices to individuals being evicted, with plaintiffs claiming their First Amendment rights under the Constitution are being violated because they are being required to lie.
A copy of the complaint in the case of The Property Management Connection et al v. Consumer Financial Protection Bureau can be accessed by clicking here.
Along with the complaint, the plaintiffs have filed a motion for a temporary restraining order, seeking to prohibit the CFPB from enforcing the interim rule, which went into effect on Monday. The rule violates the Administrative Procedures Act, the plaintiffs allege, because it is not authorized by the FDCPA.
Under the rule, collectors, including attorneys, are required to provide a clear and conspicuous written notice to tenants on the same date as the eviction notice or on the date the eviction action is filed, in response to an eviction moratorium put into place by the Centers for Disease Control and Prevention. The rule is aimed at protecting individuals who have been impacted by the COVID-19 pandemic. The CFPB has estimated that nearly 9 million renters are behind on their payments and that “tens of thousands of renters are being evicted every week, often without being told of their rights under the CDC moratorium.”
But a number of courts have held that the eviction moratorium put in place by the CDC is unlawful, including a court in Tennessee, where this complaint was filed. The Sixth Circuit Court of Appeals has also said that the CFC overstepped its authority by issuing the eviction moratorium.
The “CFPB is requiring plaintiffs to lie about the lawfulness and availability” of their rights under the moratorium, the complaint alleges.
The plaintiffs are represented by the New Civil Liberties Alliance. The “CFPB is supposed to protect consumers against false and misleading statements, not force housing providers to falsely inform tenants that they don’t have any obligation to pay their rent,” said Caleb Kruckenberg, one of the lawyers representing the plaintiff, in a statement. “This rushed and sloppy rule is just a political statement masquerading as the law.”