On January 15, 2016, the CFPB filed a brief opposing a motion to dismiss in the Matter of Integrity Advance, LLC ("Integrity") asserting that there is no time bar for certain CFPB actions under its UDAAP authority. The CFPB's argument cites its own RESPA enforcement action, which is currently on appeal, in contending that the UDAAP statute of limitations only applies to "civil actions in court, not to administrative proceedings. . . ." In its brief, and in the related case on appeal, the CFPB relies heavily on the precedent set in BP America Production Co. v. Burton, 549 U.S. 84 (2006), which held that the three-year statute of limitations for RESPA actions is inapplicable to the CFPB's enforcement actions, and that time limits for such enforcement actions must be directly expressed by federal statute.
In response, Integrity claimed, among other things, that the CFPB's argument is contradictory and relies on one reading of the statute that, if accurate and consistently applied with respect to other sections of the statue, would significantly limit CFPB's UDAAP authority. Thus, according to Integrity's response, either the statute of limitations applies to administrative actions, or the CFPB has no authority "to pursue a UDAAP claim or recover costs," but the CFPB "cannot have it both ways."
If the CFPB's rationale regarding the inapplicability of a statute of limitations stands, it will add even more leeway for the CFPB to exercise its already unbridled UDAAP authority. This, in turn, would create more uncertainty for industry participants attempting to manage UDAAP compliance risks. Get out the Rolaids.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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