Texas Judge Holds That Discrimination is Not Unfair and Vacates CFPB Rule

On Friday, a Texas district judge held that the CFPB’s authority to prohibit “unfair, deceptive, or abusive acts or practices” does not authorize the agency to regulate discrimination as one such practice, invoking the major questions doctrine. As such, in a win for the Chamber of Commerce, he vacated the CFPB’s March 2022 update to the UDAAP portion of its Supervision and Examination Manual, which directs examiners to use the agency’s UDAAP authority to access companies’ data, algorithms, operations, premises, and personnel for evidence of “discrimination,” including “disproportionately adverse impacts on a discriminatory basis,” or evidence of insufficient internal monitoring for those outcomes.

Notably, this website has long had a category for posts entitled “Unfair & Deceptive Acts & Practices (UDAP), including Discrimination”. According to the court, this is unambiguously incorrect.

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