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The CFPB is “Open for Amicus Suggestions”

September 5, 2012

 

The CFPB recently announced that it is soliciting recommendations for cases in which to file amicus briefs, following a strategy used by other regulatory agencies.

The Issue: On August 2, 2012, the Consumer Financial Protection Bureau (CFPB) published a page on its website that lists the cases in which it has filed amicus briefs and also announced that it is now inviting public recommendations for cases that should be considered as candidates for its amicus program. The CFPB has asked to be notified of “federal court of appeals or state supreme court” cases with “important legal questions about the interpretation or application of a federal consumer financial protection statute or regulation” that it interprets or enforces.[1]

Several other regulatory agencies have made similar solicitations. For example, the Securities and Exchange Commission solicits cases for amicus participation,[2] as does the Equal Employment Opportunity Commission.[3]

The CFPB has filed six amicus briefs thus far that have addressed three issues: (a) whether consumers must file a lawsuit within the three year statute of limitations period in order to rescind a loan under TILA, 12 U.S.C. §1635 (which we discussed here[4] and here[5] ); (b) whether a defendant who wins a Fair Debt Collection Practices Act (FDCPA) lawsuit can collect court costs from the plaintiff (which we discussed here[6]) and (c) whether activities intended to enforce a security interest (e.g., foreclosure) are immunized from FDCPA rules pertaining to debt collection.

Implication: The CFPB’s recent solicitation of recommendations for cases in which it should weigh in as a “friend of the court” confirms, following its filing of numerous amicus briefs already, that it plans to have an active amicus practice. This seems consistent with a general intent to be an active regulator. Only time will tell the full extent of the impact the CFPB’s amicus program will have in shaping judicial interpretation of consumer financial protection laws, although its mere participation is likely to influence the proceedings, and can be expected to do so even more in the future as it weighs in regarding interpretations of regulations it has written.[7] One indicator may be whether courts come to request that the CFPB file amicus briefs in cases that involve interpretation of laws and regulations under the CFPB’s purview. It is worth noting that not all courts have followed the position advocated by the CFPB as amicus.[8]

One controversial issue on which the CFPB might seek to file future amicus briefs is whether disparate impact analysis can be used to prove a violation of fair lending laws, such as the Equal Credit Opportunity Act or the Fair Housing Act.[9] The CFPB signaled support for disparate impact analysis in Bulletin 2012-04[10] and may now try to articulate that support in an amicus filing as such cases continue to make their way through the appellate courts. The banking industry, on the other hand, has argued against the use of disparate impact analysis, arguing as the American Bankers Association did as amici in Magner v. Gallagher that if Congress intended to prohibit facially neutral conduct that had a disparate impact, it would have used corresponding language, and that the pertinent language in the Fair Housing Act prohibits only intentional discrimination.[11]

Thus far, all of the amicus briefs filed by the CFPB have supported the consumer’s position in the litigation. It is reasonable to expect that record to continue. The CFPB’s establishment of an active amicus program also may invite increased amicus activity by the opposing litigants. Organizations representing and/or advocating for providers of consumer financial products or services may wish to plan for such amicus activity.

Randall W. Edwards (415) 984-8716 redwards@omm.com  
Elizabeth L. McKeen (949) 823-7150 emckeen@omm.com  
Dixie Noonan (415) 984-8973 dnoonan@omm.com

[1] Meredith Fuchs, Open for Amicus Suggestions, CFPB Blog (Aug. 2, 2012), http://www.consumerfinance.gov/blog/open-for-amicus-suggestions/  
[2] Request for Commission Amicus Participation in a Pending Case, http://www.sec.gov/litigation/briefs/amicusrequest.htm  
[3] Amicus Curiae Program, http://www.eeoc.gov/eeoc/litigation/amicus.cfm  
[4] TILA Rescission Rights and the CFPB’s Amicus Strategy, http://www.omm.com/tila-violations-05-18-2012/  
[5] TILA Rescission Rights, http://www.omm.com/tila-rescission-rights-06-18-2012/  
[6] Award of Costs in FDCPA Cases Won by Debt Collectors, http://www.omm.com/award-of-costs-in-fdcpa-cases-won-by-debt-collectors-06-18-2012/. In addition to the amicus brief filed by the CFPB on Jan. 26, 2012 in the 10th Circuit on this issue, on Aug. 16, 2012 the FTC and the CFPB filed an amicus brief before the Supreme Court. FTC Joins Amicus Brief Opposing Federal Court Finding On Consumers' Rights Under the Fair Debt Collection Practices Act, http://www.ftc.gov/opa/2012/08/amicus.shtm  
[7] There is an ongoing debate over the value and persuasive effect of amicus filings, which generally seems to depend on the type of party filing the amicus, the information being provided by the amicus and the attitude of the court. See, e.g., Linda Sandstrom Simard, An Empirical Study of Amici Curiae in Federal Court: A Fine Balance of Access, Efficiency, and Adversarialism, 27 Rev. Litig. 669, 697 (2008) (“Amicus curiae briefs offered by governmental entities were favored at all levels of the federal bench. Specifically, all three Supreme Court respondents indicated that amicus briefs offered by governmental entities, particularly the U.S. Solicitor General, tend to be very helpful to the Court.”); Voices for Choices v. Illinois Bell Tel. Co., 339 F.3d 542 (7th Cir. 2003) (the view of a court that restricts amicus filings); Neonatology Associates, P.A. v. C.I.R., 293 F.3d 128 (3d Cir. 2002) (the view of a court that broadly permits amicus filings).
[8] See, e.g., Brief for the United States as Amicus Curiae Supporting Petitioners, Freeman v. Quicken Loans, Inc., 2011 WL 6019905 (U.S., 2011).
[9] For example, on November 7, 2011 the Supreme Court had granted certiorari in the case of Magner v. Gallagher, to decide whether “disparate impact claims cognizable under the Fair Housing Act” and, if cognizable, whether the analysis should be done “under the burden shifting approach used by three circuits, under the balancing test used by four circuits, under a hybrid approach used by two circuits, or by some other test [.]” However, the parties voluntarily dismissed the appeal to the Supreme Court on February 14, 2012, shortly before scheduled oral argument. Magner v. Gallagher, No. 10-1032 (U.S.), docket available at http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/10-1032.htm  
[10] CFPB Bulletin 2012-04 (Fair Lending) (Apr. 18, 2012), available at http://www.consumerfinance.gov/pressreleases/consumer-financial-protection-bureau-to-pursue-discriminatory-lenders/  
[11] Brief of American Bankers Association et al. as Amici Curiae Supporting Petitioners, Magner v. Gallagher, 2011 WL 7038745, at *4 (U.S., 2011).