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Financial Services Law Insights and Observations

District Court denies motion to dismiss for lack of jurisdiction

Courts CFPB Enforcement CFPA Consumer Finance CIDs


On March 21, the U.S. District Court for the Western District of Virginia denied defendants’ motion to dismiss for lack of subject matter jurisdiction in a suit alleging that they misrepresented the cost of immigration bond services and deceived migrants to keep them paying monthly fees, including by making false threats of deportation for failure to pay. The defendants argued that “the CFPB lacks authority to exercise any power to enforce the CFPA with respect to [the defendants] because these corporations are regulated by state insurance regulators (12 U.S.C. § 5517(f)) and are merchants, retailors, or sellers of nonfinancial goods or services.” However, the district court noted that “limitations on the CFPB’s regulatory authority do not equate to limitations on this court’s jurisdiction.” The defendants also argued “that the exclusions to CFPB jurisdiction enumerated in the CFPA are jurisdictional limits on the court.” The district court found the defendants were “mistaken” and that “Congress did not expressly state that any threshold limitation on the CFPA’s scope shall count as jurisdictional limitations on the court. For these reasons, the court finds that it has subject-matter jurisdiction in this case.”

As previously covered by InfoBytes, the U.S. District Court for the District of Columbia denied the defendants’ request to enforce a modified Civil Investigative Demand (CID) and prevent the CFPB from obtaining personal information about the defendants’ clients via CIDs to third parties. In August 2017, the CFPB issued a CID to the defendants requesting various documents and information. The CFPB filed the present lawsuit in February 2021.