TYLER, Texas – Fourteen Attorneys General, including West Virginia’s Patrick Morrisey, have filed an amicus brief opposing a new rule implemented by the federal Consumer Finance Protection Bureau.
The AGs, in the brief filed December 7, say the new rule seeks to unlawfully expand the CFPB’s authority to encompass many practices Congress chose not to give the agency such as the power to regulate, including the investigation and punishment of all acts of supposed discrimination in the consumer finance industry.
“It’s really very simple: these unelected bureaucrats can only function within the authority and limits provided to them by Congress,” Morrisey said. “Anything beyond that is overreach. I will do everything I can within the confines of the law to stop any kind of federal encroachment.”
Morrisey
The Dodd-Frank Act, which was signed into law by President Barack Obama, gives the CFPB specific authorities for regulating the consumer finance industry. It does not allow the agency to investigate or punish general discrimination.
But, the AGs allege CFPB has claimed the power to police all acts of discrimination, as defined by the agency, which could include even so-called disparate impact claims. They say this rule was introduced as part of an update to the CFPB’s examination manual and without any opportunity for public notice and comment.
In their brief, filed in federal court in Texas, the AGs say the rule exceeds the authority of the CFPB, illegally bypassed notice and comment and seeks to avoid judicial review.
Morrisey joined the Georgia-led brief with attorneys general from Alabama, Arizona, Arkansas, Idaho, Indiana, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, Texas and Utah.
The lawsuit was filed in September by the U.S. Chamber of Commerce and other plaintiffs. (The Chamber’s Institute for Legal Reform owns The West Virginia Record.) The plaintiffs allege the failure by Congress to grant authority to the CFPB raises a “major questions” issue as recently decided by the Supreme Court and likely will result in the disappearance of products consumers currently enjoy and benefit from.
“For example, no-fee checking accounts are more often offered to customers with higher balances, which often are individuals further into their careers as opposed to those who are just beginning to work,” the Chamber complaint noted. “A disparate impact analysis could find that no-fee policies for customers with larger balances constitute age discrimination against younger customers, and therefore banks may no longer be willing to offer such products to consumers for fear that they will be declared unlawful.
U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley said the CFPB is rewriting the law.
“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,” he said. “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. …
“The CFPB has important responsibilities to protect consumers, including against discrimination, but rather than focusing on that work, the CFPB is attempting to pretend that they are Congress and impose new theories of disparate impact through an extra-legal process. By doing this, everyday consumers will find they have less access to banking and credit products as companies will be forced to divine what the CFPB may or may not say is now illegal under the undefined standard they have created.”
The Chamber is asking the court to intervene to ensure the CFPB is held accountable to the rule of law to ensure consumers are protected and have access to financial products they rely on.
U.S. District Court for the Eastern District of Texas case number 6:22-cv-00381
