In an amicus brief filed last week in the U.S. District Court for the District of Kansas, Oklahoma Attorney General Mike Hunter assailed the expansive interpretation of enforcement powers against state and tribal sovereigns adopted by the Consumer Financial Protection Bureau. The case is CFPB v. Golden Valley Lending, Inc., et al., No. 2:17-cv-02521 (D. Kan.).
The case was initiated by the CFPB against four tribal entities (the "Tribal Defendants"), asserting four counts under the Consumer Financial Protection Act of 2010 and two under the Truth in Lending Act. The CFPB alleges that the Tribal Defendants did not disclose annual percentage rates in connection with their advertising or caller assistance and that they serviced and collected on loans that were void ab initio under the state laws applicable to some borrowers.
The CFPB alleged in the complaint that the four Tribal Defendants "are owned and incorporated by the Habematolel Pomo of Upper Lake Indian Tribe ... , a federally recognized Indian tribe located in Upper Lake, California." The Tribal Defendants moved to dismiss, arguing (among other things) that, as tribal entities, they are immune from the CFPB's enforcement authority.
Hunter's amicus brief focuses on the state's concern that the CFPB could try to extend its jurisdiction over sovereign states just as it is trying with sovereign tribes. Oklahoma argues that the CFPB's position "is without textual support, bad policy, and contrary to our system of federalism and the separation of powers. It is also against the express binding precedent of the U.S. Supreme Court and the Tenth Circuit, which decline to assume that generally applicable statutes apply to Indian tribes in the absence of clear statutory intent."
The state points out that, if the CFPB's expansive interpretation were to prevail, various financial services offered by Oklahoma – including "student loan programs, credit unions, and other endeavors" – could come within the CFPB's enforcement authority. According to its amicus brief, "Oklahoma therefore has a very good reason to push back against the CFPB, as its actions threaten the State's institutions and diminish its sovereignty, as well as that of others in our federal system."
Briefing remains open on the Tribal Defendants' motion to dismiss, with the CFPB's response due December 11 and the Tribal Defendants' reply due January 15. We will continue to monitor the case for further developments.
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