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Troutman Sanders Wins a Significant Appellate Victory Against the CFPB


ATLANTA, September 6 -- The U.S. Court of Appeals for the Fifth Circuit has held that the Consumer Financial Protection Bureau (CFPB) ignored congressionally mandated limits on its powers when it issued a civil investigative demand (CID) to the Source for Public Data. The decision represents a significant victory for those concerned that the CFPB, under the prior director, had been conducting aggressive, overreaching investigations and may do so in the future.

Writing for the three-judge panel, Judge Jennifer Walker Elrod held that the CFPB failed to comply with a governing statue when it issued the CID to the Source for Public Data. Specifically, the Court held that the CFPB failed to provide the Source for Public Data with sufficient notice, as required by the statute, of what conduct the agency was investigating and why the agency believes the conduct constitutes a violation of a statute that the CFPB has authority to enforce. According to the Court, “the CFPB does not have unfettered authority to cast about for potential wrongdoing” and “must comply with statutory requirements” governing its investigatory powers.

“The Fifth Circuit’s decision upholds limits that Congress placed on the CFPB’s investigatory powers and will serve as an important defense against overreaching government investigations,” said Ron Raether, the Troutman Sanders attorney who argued the appeal on behalf of the Source for Public Data.

“We are thrilled with this result and with the team of Troutman Sanders attorneys who made it happen,” said Bruce Stringfellow, the Source for Public Data’s president. “We asked Troutman Sanders for great legal work, and we got it.”

Ron Raether, Keith Barnett, Timothy Butler and Jonathan Yee of Troutman Sanders represented the Source for Public Data before the Fifth Circuit. The case is Consumer Financial Protection Bureau v. The Source for Public Data, L.P., No. 17-10732. The briefs Troutman Sanders prepared for the Source for Public Data are available here and here, and the Fifth Circuit’s decision is available here.

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