Does Loper Bright limit the CFPB’s power?

As I noted in yesterday’s post, Loper Bright preserves agency authority when Congress authorized the agency to exercise discretion. Loper Bright cited as an example of such a case Michigan v. EPA, in which, Loper Bright noted, Congress used a term or phrase that gives agencies flexibility, “such as ‘appropriate’ or ‘reasonable.”

Now let’s look at some statutes giving the CFPB power to issue regulations. Start with the FDCPA–specifically, 15 U.S.C. § 1692l(d), which provides “the Bureau may prescribe rules with respect to the collection of debts by debt collectors, as defined in this subchapter.” No explicit grant of discretion using words like appropriate or reasonable there, and so Regulation F, the CFPB’s FDCPA regulation, should be reviewed under Loper Bright under the Skidmore standard–meaning, in essence, as long as the court gives the Bureau’s view respectful consideration, if the court thinks the Bureau got it wrong, the court can strike down the reg.

But now look at the Consumer Financial Protection Act, the statute that created the CFPB, and particularly 12 U.S.C. § 5512(b)(1), the section that authorizes the CFPB to issue regulations as a general matter: “The Director may prescribe rules and issue orders and guidance, as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer financial laws, and to prevent evasions thereof.” (emphasis added)

That grant of authority uses the word “appropriate,” one of the keys to reduced review. It doesn’t use the other word Loper Bright mentions–reasonable–but Loper Bright uses “or,” meaning either appropriate OR reasonable is enough. And § 5512(b)(1) also says “necessary,” which seems like another term that suggests a degree of discretion, because we all know that the necessary and proper clause entails the use of some discretion.

But what about Reg F? Well, the Bureau issued Reg F under its 15 U.S.C. § 1692l(d) authority, but also under its authority to issue rules which are necessary or appropriate under 12 U.S.C. § 5512(b)(1). So I think Reg F should be evaluated under the lesser review standard as well.

In other words, whatever impact Loper Bright has on other administrative agencies, there is an argument that it does not subject the CFPB to Skidmore review, at least when the CFPB issues regulations under 12 U.S.C. § 5512(b)(1).

So as to the CFPB, the exception seems to swallow the Loper Bright rule. Which is, by the way, exactly what Harvard Law professor Adrian Vermeule predicted would be Loper Bright’s result as a general matter in his short essay, Chevron by any Other Name.

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