Who's Policing the Financial Cop on the Beat? A Call for Judicial Review of the Consumer Financial Protection Bureau's Non-Legislative Rules

Abstract

This law review article addresses administrative power in the context of financial services. The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB), an independent executive agency, to oversee this space. The CFPB issues interpretations and other guidance documents of consumer financial regulations it administers. This article discusses whether courts should defer to the CFPB's issuances in certain contexts. The claim in this article is that courts should not defer to the Bureau's interpretations and other regulatory guidance documents that seek to interpret regulations the CFPB administers. This article argues that the CFPB has been issuing "legislative," or "substantive" rules while avoiding the notice-and-comment process. This practice by the CFPB has been used to regulate fair lending in the context of automotive finance. Through a case study of Ally Financial, Inc., this article illustrates how the Bureau has enforced its interpretation of fair lending through adjudication of its own interpretations.

Keywords: Consumer Financial Law, Separation of Power, Judicial Deference, Administrative Law, Consumer Financial Protection Bureau, Fair Lending, Agency Bulletins