On March 1, and despite recent policy shifts under the new administration, the CFPB sent a letter to the judge overseeing its lawsuit against a fintech lender in the United States District Court for the Southern District of New York, stating that it would proceed with its filed action. The lawsuit, originally filed in September 2022, alleges violations of the Military Lending Act’s (MLA) restrictions on extensions of credit to covered servicemembers. The complaint further alleges violations of the Consumer Financial Protection Act’s (CFPA) prohibitions on unfair, deceptive, or abusive acts or practices (UDAAPs). 

The CFPB’s letter follows the court’s denial of the lender’s request to stay the case. In its letter, the lender argued that the new administration needed time to reassess whether the enforcement action aligned with its regulatory priorities. Citing the CFPB’s broader enforcement pause under new leadership (previously discussed here), the lender contended that the lawsuit should be temporarily halted. However, the court rejected this argument and required the CFPB to clarify its position.

Specifically, the complaint alleges that the lender:

Putting It Into Practice: The CFPB’s decision to continue litigating this case signals that, despite leadership changes and the withdrawal of multiple lawsuits initiated by the previous administration (previously discussed here), certain Bureau enforcement priorities persist. Lenders should continue to monitor how the CFPB’s enforcement posture evolves under the new administration and adjust compliance strategies accordingly.

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