Judge Grants Win in Lawsuit Over CFPB UDAAP Exam Manual

Posted: Sep 13 2023

Last Friday, a federal judge in Texas granted summary judgment to ABA, the Texas Bankers Association, the U.S. Chamber of Commerce and several other co-plaintiffs in their challenge to the CFPB’s UDAAP exam manual. In a sharp rebuke of the agency, the judge issued a final judgment setting aside the CFPB’s March 2022 interpretation of its UDAAP authority.
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The court granted additional protection to the plaintiffs’ members by issuing a final judgment prohibiting the CFPB from “pursuing any examination, supervision, or enforcement action against any member of a plaintiff organization based on the CFPB’s interpretation of its UDAAP authority.”
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The judge agreed that the CFPB clearly exceeded its statutory authority under the Dodd-Frank Act. In addition, the judge upheld ABA’s challenge to the exam manual on the grounds that it was the product of an unconstitutionally funded agency. (Texas is covered by an appellate court ruling, currently being appealed to the Supreme Court, that found the bureau’s funding violates the Appropriations Clause of the Constitution.)
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To view the court ruling, visit: https://bankingjournal.aba.com/wp-content/uploads/2023/09/gov.uscourts.txed_.217590.41.0.pdf