Nearly a year after oral argument, the Third Circuit this morning released its opinion in CFPB v. National Collegiate Master Student Loan Trust. The case is a long-running enforcement action brought by the CFPB against investment trusts that were created for the purposes of acquiring and servicing student loans, seeking to enforce civil investigative demands.
The first issue in the case was whether the trusts were covered persons under the CFPA–which applies to those who “engage in offering or providing a consumer financial product or service.” The court resolved this issue in favor of the CFPB, holding that the trusts “engaged” in student loan servicing and debt collection.
The second issue was whether the suit was barred because it had been commenced prior to the Supreme Court’s decision in Seila Law, i.e., under a CFPB Director who was not removable at-will, because it had not been ratified until after the statute of limitations had run, and because ratification could not cure the injury the Trusts suffered. The court held that the Trusts had not shown “that the unconstitutional limitation on the President’s authority harmed the Trusts,” and thus that there was no need to ratify the action post Seila Law.
The case arose from a particularly interesting procedural posture. Third Circuit Judge Bibas is presiding over the case in district court, sitting by designation. He previously certified an interlocutory appeal of his decision denying the defendants motion to dismiss to the Third Circuit.
