On January 15, 2016, the CFPB Office of Enforcement asserted that claims pursued in administrative enforcement actions are not subject to the three-year statute of limitations set forth in the Consumer Financial Protection Act, signaling that the agency is willing to target long-ago violations when seeking restitution and penalties. The CFPA — also known as Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act — is the statute that empowers the CFPB to administratively enforce the federal consumer financial laws.

The Integrity Advance enforcement proceeding involves conduct that allegedly stopped in December 2012. The CFPB alleged that a payday lender misled consumers by disclosing that loans could be repaid in a single payment when, in fact, the loans would roll over automatically because payments were applied to finance charges instead of to principal. The CFPB also alleged violations of the Electronic Fund Transfer Act, the Truth in Lending Act, and the CFPA’s prohibition of unfair, deceptive, or abusive acts or practices against the lender.

The CFPB put forth its statute of limitations argument in a brief opposing a motion to dismiss filed in its administrative proceeding against Integrity Advance, LLC. In making this argument, the CFPB is breaking new legal ground. Previously, the agency had argued that the CFPA SOL does not apply to claims brought by the CFPB under its CFPA administrative action authority alleging violations of the Real Estate Settlement Procedures Act. Now, it is extending that argument to claims alleging violations of the CFPA’s prohibition of unfair, deceptive, or abusive acts or practices.

Read more at our client alert here.