In a recent decision, the US District Court for the Eastern District of Texas overruled a previous policy by the Consumer Financial Protection Bureau (CFPB). On September 8, 2023, the court decided that the CFPB had exceeded its authority when it had issued a new policy describing certain discriminatory behaviours and practices relating to noncredit products and services as “unfair”.
The controversial policy was part of an update to the CFPB’s examination manual. As a result of the court’s ruling, this update to the manual has been vacated. Furthermore, the CFPB has been enjoined from enforcing this policy, providing a significant relief for the members targeted by it.
The decision represents a notable constraint on the CFPB’s attempt to assert its authority onto noncredit financial products and services. Critics of the CFPB argue that this ruling underscores the limits of the Bureau’s authority and protects important business practices from overregulation.
Further details about the court’s decision and its implications are available on this JD Supra article, written by the law firm Cooley LLP.