In October the United States Court of Appeals for the D.C. circuit limited the authority of the Federal Agency and rejected its statutory interpretations in the case PHH v. CFPB. The well-publicized decision is noteworthy for the constitutional authority angle of the case, however the ruling is consequential on statute of limitations issues which could have immediate consequences for Lawyers who advise banks, mortgage lenders and other industries regulated by the Bureau.
In this case the CFPB contended that under Dodd-Frank, there is no statute of limitations for any CFPB administrative actions to enforce any consumer protection law. This assertion was summarily rejected by the Court Appeals. The court mandated that the CFPB is bound by statute of limitations in the underlying statutes the bureau is enforcing. An immediate implication of the ruling is that potentially, before an enforcement action is brought, companies may challenge the CFPB’s demands for a review of documents that may be beyond the statute of limitations.