Statute of Limitations

One of the great ironies of the Supreme Court’s decision in Seila Law v. CFPB, in which the Supreme Court held that the Consumer Financial Protection Bureau’s (CFPB) structure was unconstitutional, is that it effectively provided no relief to Seila Law, the party that took the case all the way to the Supreme Court. On remand, the Ninth Circuit held that the CFPB’s case against Seila Law could continue. Now, for the first time, a court has held that a pending CFPB enforcement action must be dismissed because of that constitutional infirmity. On March 26, 2021, a federal district court dismissed the CFPB’s action against the National Collegiate Student Loan Trusts, a series of fifteen special purpose Delaware statutory trusts that own $15 billion of private student loans (the NCSLTs or Trusts), finding that the agency lacked the authority to bring suit when it did; that its attempt to ratify its prior action came too late; and that based on its conduct, the CFPB could not benefit from equitable tolling. In doing so, the court avoided ruling on a more substantial question with greater long-term implications for the CFPB and the securitization industry—whether statutory securitization trusts are proper defendants in a CFPB action.
Continue Reading CFPB Suffers First Loss After Seila Law

Earlier this month, we wrote about how 28 U.S.C. 2642 might provide a statute of limitations in those cases where the Consumer Financial Protection Bureau (CFPB) alleges that none applies.  As we described, the CFPB has taken the position that no statute of limitations applies to administrative enforcement cases that it brings, and that there is no statute of limitations applicable to some enforcement cases it brings in federal district court, either.  A skeptical member of the D.C. Circuit questioned the agency about this issue during oral argument in PHH Corporation’s appeal of a CFPB administrative enforcement order, suggesting (although the parties had not argued the point) that 28 U.S.C. 2642 may be applicable. That statute provides that “[e]xcept as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise” is generally subject to a five-year statute of limitations.

What qualifies as a “civil fine, penalty, or forfeiture, pecuniary or otherwise” is thus one of the determinants of whether Section 2642’s statute of limitations applies. On May 26, the Eleventh Circuit addressed this very issue in a case involving a Securities and Exchange Commission (SEC) enforcement action, SEC v. Graham, No. 14-13562, slip op. (11th Cir. May 26, 2016).
Continue Reading Eleventh Circuit Statute of Limitations Opinion May Have Implications for CFPB Cases