Judge grants win to ABA, Chamber in suit over CFPB UDAAP examination handbook

A federal judge in Texas today given summary judgment to ABA, the Texas Bankers Association, the U.S. Chamber of Commerce and a number of other co-plaintiffs in their difficulty to the CFPB’s UDAAP examination handbook, in which the bureau unlawfully broadened the statutory meaning of “unfairness” to include discrimination. In a sharp rebuke of the firm, the judge provided a last judgment reserving the CFPB’s March 2022 analysis of its UDAAP authority.

The court approved extra security to the complainants’ members by releasing a last judgment forbiding the CFPB from “pursuing any examination, supervision, or enforcement action against any member of a plaintiff organization based on the CFPB’s interpretation of its UDAAP authority.”

“While we’re still reviewing the final judgment and its full implications, we’re pleased with today’s U.S. District Court ruling that makes clear the CFPB exceeded its statutory authority when it ‘updated’ its exam manual and announced an open-ended and novel power to examine banks for alleged discriminatory conduct,” ABA President and CEO Rob Nichols stated.

The judge concurred with ABA that the CFPB plainly surpassed its statutory authority under the Dodd-Frank Act. In addition, the judge promoted ABA’s difficulty to the examination handbook on the premises that it was the item of an unconstitutionally moneyed firm. (Texas is covered by an appellate court judgment, presently being attracted the Supreme Court, that discovered the bureau’s financing breaches the Appropriations Clause of the Constitution.)

While ABA repudiates discrimination of any kind, it argued in the event that the bureau’s unjust, misleading and violent acts or practices, or UDAAP, authority cannot be utilized to extend the reasonable financing laws beyond the bounds set by Congress. “We strongly support the fair enforcement of nondiscrimination laws, but the bureau’s extraordinary expansion of its regulatory reach crossed the line,” Nichols included. “We hope this ruling sends a clear message to the bureau and all federal regulators that they must operate within the boundaries set by Congress.”


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