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CFPB Exceeds Jurisdiction

Articles by: Dan Bucherer

A mortgage lender and its owner have won a decisive victory against the CFPB in federal court. In Bureau of Consumer Financial Protection v. Townstone Financial et al., the U.S. District Court for the Northern District of Illinois invalidated the CFPB’s contention that it can police for discrimination against prospective applicants for credit.

The Equal Credit Opportunity Act (ECOA) makes it unlawful for creditors to discriminate against applicants for credit based on certain protected factors. Regulation B, which implements ECOA, goes further than the statute by providing protection to “prospective applicants.”

The defendants were alleged to have discouraged prospective applicants to apply for credit based on race, which would violate Regulation B. In assessing this allegation using the Chevron Test, the court found that ECOA “only prohibits discrimination against applicants,” not prospective applicants.

The court disregarded the Bureau’s argument that other provisions of law permitted it to exceed ECOA’s limits, ruling that only the Chevron Test should be used to determine the validity of an agency interpretation.

Time will tell whether other courts will continue to rule in this direction, but this ruling calls into question the CFPB’s interpretation of Regulation B more broadly and to bring the CFPB’s interpretations in line with statutory authorities.

CFPB Exceeds Jurisdiction
Feb 09, 2023

A mortgage lender and its owner have won a decisive victory against the CFPB in federal court. In Bureau of Consumer Financial Protection v. Townstone Financial et al., the U.S. District Court for the Northern District of Illinois invalidated… Read the rest

FTC, CFPB Miss on Fees
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The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission are issuing proposed rules on fees and unfortunately, both have missed the mark.

Today, AFSA responded to the FTC’s proposed rule on fees. The work the FTC… Read the rest

2023 Independents Conference & Expo Keynote Announcement
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AFSA is pleased to announce change-agent CEO, author, and one of America’s most popular corporate speakers, Amanda Gore, as an Independents Conference & Expo Keynote Speaker.

For more than 25 years Amanda has used her expertise in emotional… Read the rest

AFSAEF EDGE & Leadership Development Program Registration Open
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Registration for the 2023 AFSA Education Foundation leadership programs are now available.

The 2023 edition of THE EDGE (Education, Development, Growth & Enrichment) program will be held June 11-16 at Mercer University in Atlanta,… Read the rest

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The Featured Business Partner for the month of February is Cox Automotive.

The Cox Automotive family of brands is transforming the way the world buys, sells, owns and uses vehicles by providing financers, dealerships, and others the connectivity… Read the rest

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AFSA released its 2023 Federal Priorities this week, focused on the protection and expansion of access to safe, responsible credit for all Americans. Some 22 different federal laws spanning eight different agencies create a layered system… Read the rest

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If you joined us at the 2023 Vehicle Finance Conference & Expo this week, then you already know that more than 750 auto finance executives – an attendance record – joined us in Dallas to discuss the state of the industry and the… Read the rest

LISTEN | Attracting Millennial + Gen Z Talent
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In this episode of the AFSA Extra Credit Podcast Dan chats with Terri Horn, Managing Director of People Strategies, a boutique firm specializing in executive search, recruiting, and Human Resources consulting. We cover one of the hottest… Read the rest

New Mexico Advocacy Group Celebrates Credit Desert
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This week in the Albuquerque Journal, the group Think New Mexico applauded imposition of a 36% rate cap in the state. But new data and research indicates that rather than helping New Mexico consumers, financial pain and hardship is on its way… Read the rest


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