Brief of Amici Curiae States of Georgia, Alabama, Arizona, Arkansas, Idaho, Indiana, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Utah, and West Virginia, in Support of Plaintiffs' Motion for Summary Judgment

INTRODUCTION AND INTERESTS OF AMICI STATES

Amici curiae, the States of Georgia, Alabama, Arizona, Arkansas, Idaho, Indiana, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Utah, and West Virginia respectfully submit this brief in support of Plaintiffs' Motion for Summary Judgment. As separate sovereigns within our federal system, the amici States have a strong interest in ensuring that the federal government respects the rule of law and does not arbitrarily impinge upon States' authority. But the Consumer Financial Protection Bureau seems intent on doing the latter, not the former, with its attempt to appoint itself a sort of anti-discrimination czar for the financial services sector.

The manual update at issue here is a clear example of federal executive overreach, with significant impacts on the States' capacity to regulate within their borders. The Dodd-Frank Act empowers CFPB to police "unfair, deceptive, or abusive act[s] [and] practice[s]" in the consumer finance industry. 12 U.S.C. § 5536(a)(1)(B). It does not authorize CFPB to investigate or punish general discrimination. Despite that obvious limitation, CFPB has now issued a rule declaring that "unfair" practices include all acts of discrimination, including, it seems, even supposed disparate impact claims. See Pls' Mot. for Summ. J., Ex. I at 11, 13-15, 17. And it announced this novel rule without any opportunity for notice and comment by interested parties-including States, which are deeply concerned with this sort of expansion of federal executive authority.

Unfortunately, this behavior is typical of a recent federal executive practice: undertaking major policy changes through agency action rather than the constitutionally prescribed legislative process. Worse still, agencies bury these significant policies in memos or ostensibly unofficial rules in the hopes of shielding them from State and private challenge. This Court should not condone such behavior here. It should hold that CFPB exceeded its authority and that Plaintiffs can challenge the updated manual now, because it is a final agency action.

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