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On March 29, CFPB acting Director Dave Uejio and FTC acting Chairwoman Rebecca Kelly Slaughter issued a joint statement indicating staff at both agencies will be monitoring and investigating eviction practices to ensure that they comply with the law. The statement follows the CDC’s March 28 announcement extending its current moratorium on residential evictions for three additional months, through June 30. Uejio and Slaughter noted that the agencies are coordinating with the CDC to ensure renters are informed of their rights under the eviction moratorium and understand how to complete declarations needed to stop evictions. Additionally, the agencies are monitoring consumer complaints for spikes and trends in potential Covid-19-related violations of the prohibitions against deceptive and unfair practices, including those under the FDCPA and the FTC Act.
On February 25, the U.S. District Court for the Eastern District of Texas granted plaintiffs’ motion for summary judgment, ruling that decisions to enact eviction moratoriums rest with the states and that the federal government’s Article I power under the U.S. Constitution to regulate interstate commerce and enact necessary and proper laws to that end “does not include the power” to order all evictions be stopped during the Covid-19 pandemic. The Centers for Disease Control and Prevention (CDC) issued an eviction moratorium order last September (set to expire March 31), which “generally makes it a crime for a landlord or property owner to evict a ‘covered person’ from a residence” provided certain criteria are met. The CDC’s order grants the DOJ authority to initiate criminal proceedings and allows the imposition of fines up to $500,000. The plaintiffs—owners/managers of residential properties located in Texas—argued that the federal government does not have the authority under Article I to order property owners to not evict specified tenants, and that the decision as to whether an eviction moratorium should be enacted resides with the given state. The CDC countered that Article I afforded it the power to enact a nationwide moratorium, and argued, among other things, that “evictions covered by the CDC order may be rationally viewed as substantially affecting interstate commerce because 15% of changes in residence each year are between States.”
However, the court disagreed stating that the CDC’s “statistic does not readily bear on the effects of the eviction moratorium” at issue, and that moreover, “[i]f statistics like that were enough, Congress could also justify national marriage and divorce laws, as similar incidental effects on interstate commerce exist in that field.” The court determined that the CDC’s eviction moratorium exceeds Congress’ powers under the Commerce Clause and the Necessary and Proper Clause. “The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium,” the court wrote. “It did not do so during the deadly Spanish Flu pandemic. . . .Nor did it invoke such a power during the exigencies of the Great Depression.  The federal government has not claimed such a power at any point during our Nation’s history until last year.”
The DOJ issued a statement on February 27 announcing its decision to appeal the court’s decision, citing that the court’s order “‘does not extend beyond the particular plaintiffs in that case, and it does not prohibit the application of the CDC’s eviction moratorium to other parties. For other landlords who rent to covered persons, the CDC’s eviction moratorium remains in effect.’”
- Jonice Gray Tucker to moderate “Pandemic relief response and lasting impacts on access, credit, banking, and equality” at the American Bar Association Business Law Section Spring Meeting
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Sherry-Maria Safchuk to discuss UDAAP at an American Bar Association webinar
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference