On September 8, 2023, the U.S. District Court for the Eastern District of Texas issued an opinion and order vacating a March 2022 anti-discrimination update to the UDAAP section of the Consumer Financial Protection Bureau's ("CFPB" or "Bureau") Supervision and Examination Manual ("Exam Manual"), holding that the Bureau exceeded its statutory UDAAP authority and that the Bureau's funding structure is unconstitutional. The court also declared unlawful any attempt by the Bureau to pursue any examination, supervision or enforcement action against members of the seven plaintiff trade associations (including the U.S. Chamber of Commerce), based on the Bureau's interpretation of its UDAAP authority as announced in the update, and enjoined such efforts as to those members.
The court's widely expected decision represents a major defeat for the Bureau, with significant implications for its ongoing efforts to expand consumer protection laws through regulatory actions not specifically authorized by Congress.
The Exam Manual Update
In March 2022, the CFPB announced that it would alter its supervisory operations to combat "illegal" discrimination, "including in situations where fair lending laws may not apply." Specifically, the Bureau stated that it would "require...
