Bloomberg Law
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Law
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

Payday Lenders Seek ‘Simpler’ Court Path to Undo CFPB Rules

May 9, 2022, 10:24 PM

The CFPB’s payday lending regulations should be struck down without delving into questions over whether the bureau itself is unconstitutional, industry lawyers told the Fifth Circuit Monday.

A 2020 rule that limited lenders from accessing borrowers’ bank accounts to collect payments runs afoul of federal rulemaking procedures and Supreme Court precedent, attorney Christian G. Vergonis told a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit.

Those reasons are enough to strike down the regulation, without looking into whether the CFPB’s independent funding—which comes through the Federal Reserve without any Congressional input—violate the U.S. Constitution, said Vergonis, ...