A federal judge has ruled that the U.S. Consumer Financial Protection Bureau (CFPB) does not have broad authority to tackle discriminatory banking practices, handing a win to financial industry groups that sued the regulator, Reuters reported. The American Bankers Association, the U.S. Chamber of Commerce and several other industry groups in a lawsuit filed in federal court in Texas in September argued that Congress had not authorized the agency to root out discrimination. U.S. District Judge J. Campbell Barker ruled in favor of the groups on Friday, saying the Dodd–Frank Act, which created the CFPB, treats discrimination and unfairness as distinct concepts. The ruling bars the CFPB from enforcing the policy against the trade groups' members. The CFPB via a spokesperson on Monday said it was reviewing the decision and considering options for an appeal. Federal law prohibits unfair acts and practices that cause consumers "substantial and unavoidable harm," the CFPB said in a statement. The CFPB in March 2022 announced that it would examine consumer financial institutions' practices for illegal discrimination as part of its broader mandate to combat unfair practices. The industry groups said the CFPB unlawfully stretched that mandate to include discrimination, expanding its authority beyond existing fair lending laws.
