U.S. District Court Rules CFPB’s UDAAP Exam Manual Updates Exceed the CFPB’s Authority


On September 8, 2023, the U.S. District Court for the Eastern District of Texas granted a summary judgement in favor of a group of trade associations, concluding that the Consumer Financial Protection Bureau’s (CFPB) updates to its Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs) Chapter of its Supervision and Examination Manual (Exam Manual) to utilize its prohibition of “unfair” acts or practices to include discriminatory practices exceeded the CFPB’s statutory authority.


On March 16, 2022, the CFPB updated the UDAAP Chapter of its Exam Manual to assert that its statutory “unfairness” authority could be used to address discrimination. In response to these updates, on June 28, 2022, the group of trade associations including the American Bankers Association, the Consumer Bankers Association, the Independent Community Bankers Association, and the U.S. Chamber of Commerce (the Associations) issued a joint White Paper stating that “unfairness” and “discrimination” are distinct and that conjoining the terms conflicted with the Dodd-Frank Act. Further, on September 28, 2022, the Associations filed a complaint declaring that the CFPB’s updates to its Exam Manual exceeded its statutory authority, were arbitrary and capricious, and violated the Administrative Procedure Act.

Judge J. Campbell of the U.S. District Court ruled in favor of the Associations, stating in his order that the updates made to the Exam Manual exceeded the CFPB’s statutory authority and that the Dodd-Frank Act treats unfairness and discrimination as two distinct concepts. Campbell’s judgement applies only to actions against the members of the trade association plaintiffs.

It is unclear if the CFPB will appeal the court’s decision. If the CFPB decides to appeal to the Fifth Circuit and the decision is upheld, it will be a clear setback for the CFPB’s efforts to expand the scope of its UDAAP authority.

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