By Nicole D. Prysby, J.D.
The Bureau argues that the consumer advocacy groups lack standing to bring claims that the Taskforce on Federal Consumer Financial Law is unlawful.
The Consumer Financial Protection Bureau (CFPB) filed a motion to dismiss claims brought by consumer advocacy groups that the CFPB’s creation and operation of the Taskforce on Federal Consumer Financial Law is unlawful. The plaintiff consumer groups have alleged that the CFPB violated the Federal Advisory Committee Act (FACA) in a number of ways, such as by failing to allow public participation in Taskforce meetings, failing to make Taskforce records public, and failing to include consumer advocates on the Taskforce. The CFPB’s brief, filed in the Massachusetts federal district court on Aug. 17, 2020, argues that the claims should be dismissed because the Plaintiffs lack standing: they have alleged no injury to themselves other than an informational injury, which is insufficient to support standing (National Association of Consumer Advocates v. Kraninger, D. Mass., Case No. 1:20-cv-11141-JCB).
In June 2020, Consumer advocacy groups National Association of Consumer Advocates and U.S. Public Interest Research Group, along with a consumer law expert, filed a complaint against the CFPB and Director Kathy Kraninger for unlawfully creating and operating the Taskforce on Federal Consumer Financial Law. The complaint alleged four claims under FACA. First, that the CFPB did not meaningfully consult with GSA before creation of the Taskforce, and did not prepare a Membership Balance Plan. Second, that the CFPB failed to give adequate advance notice of and allow public participation at Taskforce meetings. Third, that the CFPB failed to make the records of the Taskforce available to the public. Fourth, that the CFPB failed to comply with FACA’s requirement that an advisory committee be "fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee," and, more specifically, that the Taskforce does not include consumer advocates who endorse consumer protections (see Banking and Finance Law Daily, June 17, 2020).
The CFPB and Director Kraninger motioned to dismiss the claims. Their memorandum in support argues that the Plaintiffs lack standing with respect to their first and fourth claims for relief, which concern the Taskforce’s creation and composition, and that they lack standing to seek broad declaratory or injunctive relief related to the Taskforce’s creation and administration or to the CFPB’s use of the Taskforce’s recommendations. With respect to the first claim, the Plaintiffs did not allege any injury resulting from what they contend were the improper procedures that led to the formation of the Taskforce, the CFPB maintains. The only injury alleged at all in the complaint is an informational injury, and the Plaintiffs do not identify any way in which the CFPB’s alleged failure to consult with the GSA and prepare a membership balance plan caused Plaintiffs to suffer their alleged informational injury, that is, preventing them from studying the Taskforce’s work and reporting on it to the public.
The CFPB also argues that the Plaintiffs lack standing to challenge the membership of the Taskforce. The alleged injury (the CFPB’s failure to select the consumer law expert to serve on the Taskforce) does not support standing because that individual has no entitlement to Taskforce membership. And even if she did, a judicial decision would not address that injury because the Plaintiffs have not asked that she be included on the Taskforce. Plaintiffs’ alleged harm, based on the Taskforce potentially recommending deregulation, is speculative and lacks any allegations of harm to the Plaintiffs. The remaining claims, which allege that the Bureau has refused to provide Plaintiffs with sufficient access to the Taskforce’s records and meetings, do not give Plaintiffs standing to seek declaratory or injunctive relief that would shut down the Taskforce and preclude the CFPB from using the Taskforce’s recommendations. Therefore, the court should dismiss the Plaintiffs’ claims for declaratory and injunctive relief, the Bureau states.
Attorneys: Mary McLeod, General Counsel, John R. Coleman, Deputy General Counsel, Steven Y. Bressler, Assistant General Counsel, Christopher Deal, Senior Litigation Counsel, Lawrence DeMille-Wagman, Senior Litigation Counsel, for Consumer Financial Protection Bureau.
Companies: National Association of Consumer Advocates; U.S. Public Interest Research Group
MainStory: TopStory CFPB DoddFrankAct GCNNews
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