bbourdages / AdobeStockOn February 18, the U.S. Court of Appeals for the Fifth Circuit granted the CFPB’s unopposed request to stay a pending appeal for 90 days to give the acting director, Russell Vought, time to review the CFPB’s position in this litigation. This litigation stemmed from the CFPB’s changes to its examination manual in March 2022, which stated that discrimination is an “unfair” practice under the Dodd-Frank Act. As previously covered by InfoBytes, the CFPB announced significant revisions to its UDAAP exam manual, in particular highlighting the CFPB’s view that its authority under UDAAP allows it to address discriminatory conduct in the offering of any financial product or service.
Several trade associations filed suit (covered by InfoBytes here) and argued this update imposed an interpretation of the prohibition on unfair practices that was contrary to the statute under the U.S. Supreme Court’s major questions doctrine and violated the APA’s procedural requirements. The district court agreed and, among other things, enjoined the CFPB from pursuing that theory of liability. The CFPB appealed and submitted briefs in support of its appeal, but it declined to present an argument at the February 3 hearing before the Fifth Circuit that occurred soon after the change in leadership at the CFPB.
