Litigation

Nobody likes Vullo v. OCC, New York's challenge to the nondepository national fintech charter half a decade ago. For most people in the industry, the case stands for the idea that the OCC can’t charter national banks that don’t take deposits, unless the bank is restricted to trust company activities. The OCC dislikes this for a few reasons, but mostly because it isn’t true. The lower court’s decision against the OCC was reversed on procedural grounds, and the case went away after the applicant at issue applied for deposit insurance. Had the lower court’s substantive reasoning been put to the...

On Friday, May 30th, the CFPB filed a motion for summary judgment in Forcht Bank v. CFPB asking the court to vacate the entire rule implementing Section 1033 (Rule). The motion argues that the Rule is unlawful under the Administrative Procedure Act (APA) as it exceeds the agency’s statutory authority and is arbitrary and capricious. The CFPB states that the change in position is the result of the agency’s review of existing rules under Executive Order 14219 to ensure they are based on the best reading of the underlying statute and do not impose undue burdens on small businesses and impede...

The en banc DC Circuit, citing Humphrey's Executor, has vacated the panel's stay of the district court's order restoring the fired MSPB and NLRB members. Especially interesting for financial services given the panel draw in the CFPB injunction appeal -- two of four dissenting judges are on the three-member CFPB panel. The court: "The Supreme Court has repeatedly told the courts of appeals to follow extant Supreme Court precedent unless and until that Court itself changes it or overturns it."

In Corner Post v. Board of Governors, FRS, the U.S. Supreme Court determined that a claim under the Administrative Procedure Act (“APA”) does not accrue for purposes of the applicable statute of limitations until the plaintiff is injured by final agency action. Corner Post is a North Dakota truck stop and convenience store that opened in 2018. Like most merchants, it accepts debit cards as a form of payment and therefore pays an interchange fee to the bank that issued the card. The allowable amount of the interchange fee is set by the Federal Reserve Board (“Board”) pursuant to its authority...

On May 16, 2024, the U.S. Supreme Court affirmed the mechanism established by Congress to fund the Consumer Financial Protection Bureau (CFPB). The case was brought by trade associations whose members were adversely impacted by a CFPB rule. The plaintiffs argued that the method by which funds are made available to the CFPB violates the Constitutional Appropriations Clause that provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” By a 7 to 2 majority, the Supreme Court disagreed, and upheld the constitutionality of the funding system....