Judge Rules that CFPB Can’t Police Discrimination by Certain Groups

Ruling unlikely to impact credit unions directly.

David Baumann


Sep 11



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David Baumann

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David Baumann

A squiggly pink arrow pointing downward and to the right.
CFPB headquarters.

A federal judge ruled Friday that the CFPB cannot examine certain banks and members of the U.S. Chamber of Commerce for discriminatory practices.

U.S. District Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas ruled that the agency exceeded its authority when it added discrimination to its examinations of “unfair” acts or practices.

“The statutory definition of ‘unfairness’ makes no mention of discrimination,” he wrote.

Campbell also said that since his court is included in the Fifth Circuit, it is bound by a decision by the Fifth Circuit Court of Appeals that found that the CFPB’s funding scheme is unconstitutional because the agency is not funded through the annual appropriations process.

Who Will Be Impacted?

However, Barker said that the ruling will only affect members of the groups that filed suit challenging the addition of discrimination to agency examiner responsibilities. Those groups are the Chamber, the American Bankers Association, the Consumer Bankers Association, the Independent Bankers Association of America, the Texas Association of Business, the Texas Bankers Association, and the Longview Chamber of Commerce.

The limitation on groups covered by the decision is similar to another Texas case in which a federal judge barred the CFPB from enforcing its small business data collection rule on members of the American Banker Association, its Texas affiliate and Rio Bank. Obviously, the Texas federal courts have become a favorite venue for CFPB opponents.

Credit union groups were not part of either suit, and so credit unions in general will not be included in the prohibition. However, many credit unions may be members of the Chamber of Commerce and therefore might be included.

Backstory and What Happens Next

In March 2022, the CFPB added discrimination to its examinations of Unfair, Deceptive or Abusive Acts or Practices (UDAAP). The groups filed suit stating that the bureau was exceeding the authority it was given in the Dodd-Frank Act.

Campbell on Friday ruled in favor of the groups.

“The court will issue a final judgment declaring that pursuing any examination, supervision, or enforcement action against any member of a plaintiff organization based on the CFPB’s interpretation of its UDAAP authority announced in the March 2022 manual update would be unlawful as exceeding statutory authority and as based on unconstitutional funding,” the judge wrote.

The unfairness standard might be something that Congress could authorize, he added.


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