Texas judge rebukes CFPB over anti-discrimination policy
Rohit Chopra, director of the Consumer Financial Protection Bureau, had amended its examination manual to instruct bank examiners to look for signs of discrimination in non-lending products and services. On Friday a judge ruled that the bureau overstepped its authority with the change.
A federal judge has ruled that the Consumer Financial Protection Bureau overstepped its authority by adopting a sweeping anti-discrimination policy last year in a major victory for banks and the trade groups that sued the agency.
In a ruling late Friday, Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas, vacated a CFPB policy that directed the agency's examiners to root out discriminatory behavior when conducting routine exams of financial institutions.
The CFPB adopted the policy in March 2022 by stating that discrimination in any financial product is an "unfair" practice that can trigger liability under the federal prohibition against "unfair, deceptive or abusive acts or practices," known as UDAAP. The judge ruled that Congress did not give the CFPB broad authority to look for discrimination beyond those areas specified in the statute. The ruling puts a major dent into the CFPB's efforts to apply anti-discrimination principles to non-lending products such as advertising.