A group of financial services organizations, along with the U.S. Chamber of Commerce, yesterday sued the Consumer Financial Protection Bureau, alleging the regulator overstepped its statutory authority when it warned companies about engaging in activities that could be found to be discriminatory and claiming that it is acting outside of the powers that it was given by Congress.
A copy of the complaint, filed in the District Court for the Eastern District of Texas, can be accessed by clicking here. The plaintiffs include the American Bankers Association, the Consumer Bankers Association, the Independent Bankers Association of Texas, the Texas Bankers Association, the U.S. Chamber of Commerce, the Texas Association of Business, and the Longview Chamber of Commerce.
Back in March, the CFPB announced it was updating its supervisory manuals to make sure those supervising and examining companies in the financial services industry were on the lookout for situations where individuals may be discriminated against, including those with debts in collection. Instances of discrimination could be found to be violations of the Unfair, Deceptive, and Abusive Acts or Practices (UDAAP) under the Consumer Financial Protection Act.
That decision was a bridge too far for the plaintiffs, which claim there are other agencies and statutes designed to eliminate discrimination and disparate impact.
“The Consumer Financial Protection Bureau is operating beyond its statutory authority and in the process creating legal uncertainty that will result in fewer financial products available to consumers,” said U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley, in a statement. “The CFPB is pursuing an ideological agenda that goes well beyond what is authorized by law and the Chamber will not hesitate to hold them accountable.”