Court Denies Trump Admin’s Motion to Dismiss Consumer Advocates’ Claims Against CFPB Taskforce; Rules Suit is Not Moot
Court Says Harms Caused By Trump Admin’s Violations Are “Sufficiently Real and Immediate”
Boston, M.A. — Today, a federal court denied the Trump administration’s attempt to dismiss a lawsuit brought by consumer advocates over former Trump Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger’s Taskforce on Federal Consumer Financial Law.
Last June, consumer advocates filed suit challenging the Taskforce’s unlawful creation and operation — which has since culminated in an unlawfully produced final report that was released on January 5 and aimed to legitimize industry-friendly policies. The CFPB stacked the Taskforce with champions of financial deregulation while excluding consumer advocates, and the Taskforce unlawfully conducted its work behind closed doors. The lawsuit seeks to bar the CFPB from relying on the Taskforce’s final report.
In today’s ruling, a Boston federal court denied the Trump administration’s motion to dismiss and ruled that the lawsuit is not moot. The court affirmed that the harms suffered by the consumer advocates “can be redressed by a use injunction, prohibiting the Defendants from relying on the report. … In the alternative, the Court could require the Defendants to attach a disclaimer to the report stating that it was produced in violation of FACA.”
In a joint statement, Democracy Forward, the National Association of Consumer Advocates, U.S. Public Interest Research Group, and consumer law expert Professor Kathleen Engel said:
“We brought this case because the Trump administration broke federal law to advance the interests of the financial services industry. Trump’s CFPB Director Kathy Kraninger created an illegal and unnecessary Taskforce on Federal Consumer Financial Law, stacked it with champions of financial deregulation while excluding consumer advocates, and produced a final report behind closed doors.
“We are pleased the court rejected the Trump administration’s attempts to evade accountability for its unlawful Taskforce, and we look forward to continuing our legal fight.”
Democracy Forward, the National Association of Consumer Advocates, U.S. Public Interest Research Group, and consumer law expert Professor Kathleen Engel filed suit on June 16, 2020, in the U.S. District Court for the District of Massachusetts. David A. Nicholas, Of Counsel to Wolf Popper LLP, is Massachusetts counsel on the case. Read the original complaint here, and learn more about the case here.
Democracy Forward is a nonprofit legal organization that represents organizations, individuals, and municipalities in impact litigation to keep corruption out of policymaking.
The National Association of Consumer Advocates (NACA) is a nonprofit association of private and public sector attorneys, legal services attorneys, law professors, and law students whose primary focus involves the protection and representation of consumers. NACA is actively engaged in promoting a fair and open marketplace that forcefully protects the rights of consumers, particularly those of modest means.
U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. U.S. PIRG is part of The Public Interest Network, which operates and supports organizations committed to a shared vision of a better world and a strategic approach to getting things done.
Kathleen Engel is a prominent scholar of consumer law and finance. She has written extensively on the law and economics of mortgage markets, as well as the subprime crisis, and she co-authored a prize-winning book on the 2008 financial crisis. Engel is a Research Professor of Law at Suffolk University and has held a number of public service positions, including on the Federal Reserve Board’s Consumer Advisory Council, the CFPB’s Consumer Advisory Board, and Vice-Chair of the Board of Consumer Reports.
(202) 452-1989, x101