On September 29, 2022, Jonathan Pompan was quoted in Bloomberg Law on a banking industry lawsuit against the Consumer Financial Protection Bureau (CFPB) over new anti-discrimination guidelines.
According to the article, the agency under Director Rohit Chopra has shifted its interpretations of several laws and regulations using advisory opinions, circulars, interpretive guidance, and other tools that don't follow the notice and comment process required by the Administrative Procedure Act (APA). Banks and other companies under CFPB oversight have objected to some of those interpretations as being novel and have decried the process by which the CFPB reached those interpretations without input from industry.
Banking industry groups and the U.S. Chamber of Commerce alleged in a lawsuit filed in a Texas federal court that the agency violated the APA by using its examination manual to reinterpret its powers to go after discriminatory actions in bank account openings and other financial products that aren't covered by fair lending laws. The bureau instead used its Unfair, Deceptive and Abusive Acts or Practices (UDAAP) authority to claim oversight of such products. That change constituted a major "legislative rule" that should have been subject to notice-and-comment rulemaking, the groups allege.
The suit "is probably just the beginning of what is likely going to be a prolonged legal battle over the legality of the aggressive legal positions taken by Chopra," said Pompan. Other challenges may look different. It's more likely that individual companies affected by agency interpretations will look to challenge the CFPB when facing an enforcement action or other unwanted attention from the bureau, Pompan said.
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