CFPB ‘Push the Envelope’ Memo in Enforcement Gets Early Test

A debt settlement services provider asked a federal judge to dismiss a Consumer Financial Protection Bureau enforcement case, citing a recent memo that says the CFPB will take a new approach on such questions.
The Jan. 23 memo by budget director Mick Mulvaney, whose role as CFPB acting director is in dispute, said the CFPB will no longer “push the envelope” in its efforts to protect consumers. However, the memo also indicated that debt collection-related matters will continue to be an important focus.
Freedom Debt Relief, which has been sued by the CFPB, asked Magistrate Judge Elizabeth D. LaPorte of the U.S. District Court for the Northern District of California to dismiss the CFPB’s case, which alleges deceptive practices. Although the Jan. 23 memo said the CFPB will focus on “quantifiable and unavoidable harm to the consumer,” the CFPB’s complaint in this suit doesn’t meet that test, Freedom Debt Relief said. The CFPB’s complaint, it said, “contains no support for any quantifiable and unavoidable harm.”
Case: Cons. Fin. Protection Bureau v. Freedom Debt Relief LLC, N.D. Cal., No. 17-cv-06484, brief filed 2/5/18