An Illinois district court denied the defendants’ motion to dismiss and granted the bureau leave to amend. Barron & Newburger weighs in, noting that businesses with consent orders may want to pay attention to the CFPB’s approach.
05/31/2023 11:00 A.M.
2 minute read
As previously reported by ACA International, the Consumer Financial Protection Bureau filed an enforcement action against TransUnion, two of its subsidiaries and longtime executive John Danaher for violating a 2017 enforcement order.
The CFPB in the lawsuit alleged “that TransUnion violated the Consumer Financial Protection Act of 2010 by failing to implement requirements of the bureau’s 2017 order and by engaging in deceptive acts and practices. The CFPB also alleges that TransUnion violated Regulation V, which implements the Fair Credit Reporting Act, and the Electronic Fund Transfer Act,” according to a news release from the bureau. “The CFPB is seeking monetary relief for consumers, such as restitution or return of funds, disgorgement or compensation for unjust gains, injunctive relief, and civil money penalties. The complaint is not a final finding or ruling that the defendants have violated the law.”
On May 23, 2023, the U.S. District Court for the Northern District of Illinois Eastern Division denied the defendants’ motion to dismiss, and in doing so, rejected Danaher’s argument that the CFPB lacked authority to pursue a claim against him for violations of the consent order. Danaher then asked the court to certify that order for interlocutory appeal, according to an alert from Barron & Newburger.
The May 23 order (PDF) states that the court both denied that request and granted the CFPB leave to amend its complaint to add a “substantial assistance” claim against Danaher. Businesses with consent orders and their executives may want to pay attention to the CFPB’s amended approach to pursuit of Danaher, according to Barron & Newburger.
In its alert, Barron & Newburger further states that “the [b]ureau brings its proposed substantial assistance claim under 12 U.S.C. [Section] 5536(a)(3), which prohibits ‘any person’ from ‘knowingly or recklessly provid[ing] substantial assistance to a covered person … in violation of the provisions of section 5531 of this title, or any rule or order issued thereunder ….’ The [b]ureau’s theory is that Danaher knowingly or recklessly provided substantial assistance to TransUnion Interactive, Inc., in its Consent Order violations.”
Read the amended complaint (PDF) here.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.