CBA Statement on Joint Stipulation with CFPB Ending UDAAP Litigation

WASHINGTON, D.C. – Consumer Bankers Association (CBA) President and CEO Lindsey Johnson today released the following statement in response to the Consumer Financial Protection Bureau (CFPB) filing a joint stipulation with CBA and other co-plaintiffs in litigation challenging the legality of changes the CFPB made to its Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) examination manual by former Director Rohit Chopra in 2022.

This joint stipulation effectively supports the U.S. District Court for the Eastern District of Texas’ final judgment from September 2023, which found the CFPB’s 2022 examination manual update to be “unlawful as exceeding statutory authority,” after which the then Biden-Chopra CFPB challenged this court’s decision. Today’s action ends the litigation and prevents the illegal changes to the UDAAP manual from taking effect:

“Our legal challenge was rooted in a fundamental principle: that the CFPB must operate within the authority granted by Congress and follow established rulemaking procedures. The Biden-Chopra CFPB’s decision to unilaterally expand its UDAAP authority would have unlawfully supplanted decades of well-settled law, regulation, and compliance management processes – without public input or statutory basis – and would have created significant regulatory uncertainty for America’s leading retail banks working to serve hardworking Americans across the country.

“We are very pleased that the Administration, and specifically the new CFPB leadership, recognize our concerns with the illegal, unilateral changes made to the CFPB’s UDAAP exam manual and took action to end the litigation. Regulatory clarity and procedural integrity are critical to ensuring America’s leading retail banks can continue to meet the needs of all consumers.

“We look forward to continuing to work with the Trump Administration, the CFPB, and other policymakers to advance consumer protection through lawful, collaborative policymaking.”

Background 

In September 2023, the U.S. District Court for the Eastern District of Texas’ final judgment declared that “the pursuit of any examination, supervision, or enforcement action against any member of a plaintiff organization based on the [CFPB’s] interpretation of its UPAAP authority” under the March 2022 Exam Manual “unlawful as exceeding statutory authority and as based on unconstitutional funding.” The full final judgment can be found HERE.

CBA Advocacy 

• To read CBA’s statement on the U.S. Director Court for the Eastern District of Texas granting co-plaintiffs’ motion for summary judgment in September 2023, click HERE.
• In February and March 2023, CBA President and CEO Lindsey Johnson authored op-eds calling for CFPB oversight and reform, particularly as it relates to its misguided views on its UDAAP authority. You can read the op-ed in American Banker HERE and RealClear Markets HERE.
• In September 2022, CBA and other trade associations filed a lawsuit challenging the CFPB’s changes to the UDAAP Exam Manual on several grounds, including the agency’s lack of statutory authority and failure to follow appropriate policymaking procedure. You can read the lawsuit HERE.
• In June 2022, after CFPB attempted to extend its UDAAP authority without legislative authority, CBA and other trade associations authored a white paper calling on the Bureau to rescind its decision. You can read the white paper HERE.