The Consumer Financial Protection Bureau alleged in 2020 that Citizens failed to investigate certain fraud claims and billing disputes. A key allegation was that the bank required customers to provide a notarized affidavit to support a fraud claim.
The Community Home Lenders Association sent a letter to the Consumer Financial Protection Bureau’s Director Rohit Chopra stating that smaller- and mid-sized mortgage bankers should be governed on assets, volume size and the extent of state oversight.
On June 1, 2021, the Ninth Circuit, in
CFPB v. Seila Law LLC, No. 17-56324, granted Seila Law LLC’s motion to stay the mandate requiring its compliance with a civil investigative demand, while it petitions the U.S. Supreme Court for a writ of certiorari on the question of whether the ratification of the Consumer Financial Protection Bureau’s (CFPB) demand is an appropriate remedy for the separation-of-powers violation identified by the Supreme Court last year. The panel ordered that the mandate would be stayed for a period of 150 days, or until final disposition by the Supreme Court. If certiorari is granted, it would be the second time that the CFPB and Seila Law face off in the high court, and the Court’s decision could resolve lingering questions that have emerged in the wake of the parties’ prior contest.
The court’s decision may impact other pending CFPB enforcement actions where ratification occurred outside the statute-of-limitations period. Editor’s note: This article is published with permission Mayer Brown.
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Another day, another major pronouncement from the Consumer Financial Protection Bureau (CFPB or Bureau), which just took two important actions. First, it rescinded seven different policy statements that offered flexibility to financial institutions during the COVID-19 pandemic and the resulting economic downturn. Second, it dropped what many viewed to be an important supervisory tool. We explain what happened and why it matters.
What Happened
If it was not apparent before today, the era of COVID-19 accommodations for industry is coming to a screeching halt. On March 31, 2021, the CFPB rescinded seven policy statements, all issued from March to June 2020 during the tenure of then-Director Kathy Kraninger: