UDAAP manual litigation
Chamber of Commerce of the United States of America v. Consumer Financial Protection Bureau
Date: April 30, 2025
Issue: The joint stipulation with the American Bankers Association and other co-plaintiffs in litigation challenging the legality of CFPB’s changes to its unfair, deceptive, or abusive acts or practices (UDAAP) examination manual by former Director Rohit Chopra in 2022.
Case Summary: ABA and CFPB filed a joint stipulation in the Fifth Circuit to end the UDAAP exam manual litigation.
In March 2022, CFPB announced it considered discrimination to be a UDAAP and would begin examining for discrimination and whether companies are adequately “testing for” discrimination in their advertising, pricing and other activities. The manual update directed examiners to use the agency’s UDAAP authority to access companies’ data, algorithms, operations, premises, and personnel for evidence of “discrimination,” including “disproportionately adverse impacts on a discriminatory basis,” or evidence of insufficient internal monitoring for those outcomes.
Judge Campbell Barker granted ABA’s motion for summary judgment, denied CFPB’s motion to dismiss, and ruled that CFPB exceeded its constitutional and statutory authority by using the manual update to enforce discrimination as unfairness. The court vacated the update and issued declaratory and injunctive relief to ABA and its co-plaintiffs’ members, though it declined to issue a national injunction. CFPB appealed, and in its opening brief, ABA argued the court properly found standing and venue, CFPB violated the APA, and the remedy was appropriate.
However, on April 30, 2025, the parties jointly filed a stipulation to voluntarily dismiss the appeal with prejudice, bringing the lawsuit to a close.
Bottom Line: In a press release, ABA CEO Rob Nichols said: “We welcome today’s joint stipulation with the CFPB to dismiss its appeal in the UDAAP manual case, which reaffirms that the Bureau exceeded its statutory authority when it ‘updated’ its exam manual and announced an open-ended and novel power to examine banks for alleged discriminatory conduct. We strongly support the fair enforcement of nondiscrimination laws, but the Bureau’s extraordinary expansion of its statutory authority crossed the line. We appreciate that the Bureau recognizes this and has agreed to dismiss its appeal with prejudice in this case.”
Documents: Joint stipulation
