Nat'l Ass'n for Latino Cmty. Asset Builders v. Consumer Fin. Prot. Bureau
| Decision Date | 14 January 2022 |
| Docket Number | Case No. 20-cv-3122 (APM) |
| Citation | 581 F.Supp.3d 101 |
| Parties | NATIONAL ASSOCIATION FOR LATINO COMMUNITY ASSET BUILDERS, Plaintiff, v. CONSUMER FINANCIAL PROTECTION BUREAU, Defendant, and Community Financial Services Association of America, Intervenor-Defendant. |
| Court | U.S. District Court — District of Columbia |
Adina H. Rosenbaum, Public Citizen Litigation Group, Rebecca Borne, Center for Responsible Lending, Rebecca H. Smullin, Consumer Financial Protection Bureau, Washington, DC, William Rhodes Corbett, Yvette Garcia Missri, Center for Responsible Lending, Durham, NC, for Plaintiff.
Karen S. Bloom, Ryan Cooper, Consumer Financial Protection Bureau, Washington, DC, for Defendant.
Michael Anthony Carvin, Christian G. Vergonis, Jones Day, Washington, DC, for Intervenor-Defendant.
In 2017, Defendant Consumer Financial Protection Bureau ("CFPB") enacted a rule designed to protect consumers from certain practices in the markets for payday and vehicle-title loans (the "2017 Rule"). These types of financial instruments typically involve high interest rates and short maturity periods that are collateralized by the borrower's next paycheck or car title. In the 2017 Rule, CFPB explained that many consumers are unable to repay such loans and so "face one of three options when an unaffordable loan payment is due: Take out additional covered loans ..., default on the covered loan, or make the payment on the covered loan and fail to meet basic living expenses or other major financial obligations." 82 Fed. Reg. 54,472, 54,472 (Nov. 17, 2017) (). Many people take the first option: taking out a new loan to repay or reduce the old one. As a result, "a substantial population of consumers ends up in extended loan sequences of unaffordable loans." Id. Among other key provisions, the 2017 Rule would prohibit the practice of no-underwriting lending, in which lenders offer loans without first assessing whether prospective borrowers can repay them. But in 2020, before the rule became effective and after CFPB had transitioned to new leadership, CFPB revoked key provisions of the 2017 Rule (the "2020 Repeal Rule"), preventing some of its core elements from going into place—including, notably, the prohibition on no-underwriting lending.
Plaintiff National Association for Latino Community Asset Builders ("NALCAB") filed this action challenging the 2020 Repeal Rule's revocation of the planned prohibition on no-underwriting lending. NALCAB is a "nonprofit[ ] membership association of mission-driven community and economic development organizations that serve diverse Latino communities" across the country. First Am. Compl. for Declaratory & Injunctive Relief, ECF No. 26 [hereinafter First Am. Compl.], ¶ 6. It "works to strengthen the economy by advancing economic mobility in Latino communities." Id. NALCAB brought this action because, it says, the 2020 Repeal Rule "makes NALCAB's work more difficult": "[a]s a result of the no-underwriting lending permitted by the Repeal Rule and the harms that such lending causes, organizations creating and strengthening financial capability programs need more assistance from NALCAB[ ] to be able to help families avoid or address unaffordable payday and title loans." Id. ¶ 7.
Now before the court are two motions to dismiss: one filed by the CFPB and the other filed by Intervenor-Defendant Consumer Financial Services Association of America ("CFSA").1 Def. CFPB's Mot. to Dismiss Pl.’s Am. Compl. for Lack of Subject-Matter Jurisdiction, ECF No. 32 [hereinafter CFPB's Mot.]; Intervenor-Def. CFSA's Mot. to Dismiss, ECF No. 33 [hereinafter CFSA's Mot.].2 Both CFPB and CFSA urge the court to dismiss this action for lack of standing. CFPB focuses its arguments on the injury requirement for Article III standing; CFSA joins those arguments and raises an additional argument regarding redressability. For the reasons that follow, the court grants the motions.
A motion to dismiss for lack of standing is properly considered under Rule 12(b)(1), as lack of standing is a "defect[ ] in subject matter jurisdiction." Haase v. Sessions , 835 F.2d 902, 906 (D.C. Cir. 1987) ; M.J. v. District of Columbia , 401 F. Supp. 3d 1, 7–8 (D.D.C. 2019). When deciding a motion under Rule 12(b)(1), a court must accept all well-pleaded factual allegations in the complaint as true. See Jerome Stevens Pharms., Inc. v. FDA. , 402 F.3d 1249, 1253 (D.C. Cir. 2005). Because the court has "an affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority," however, the factual allegations in the complaint "will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim." Grand Lodge of the Fraternal Order of Police v. Ashcroft , 185 F. Supp. 2d 9, 13–14 (D.D.C. 2001) (internal quotation marks omitted). To that end, the court may consider "such materials outside the pleadings as it deems appropriate to resolve the question whether it has jurisdiction to hear the case." Scolaro v. D.C. Bd. of Elections & Ethics , 104 F. Supp. 2d 18, 22 (D.D.C. 2000). Thus, "where necessary, the court may consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Coal. For Underground Expansion v. Mineta , 333 F.3d 193, 198 (D.C. Cir. 2003) (internal quotation marks omitted).
As the party bringing suit, NALCAB bears the burden of establishing standing. Attias v. Carefirst, Inc. , 865 F.3d 620, 625 (D.C. Cir. 2017). At the motion-to-dismiss stage, "plaintiffs are required only to state a plausible claim that each of the standing elements is present." Id. (emphasis omitted) (internal quotation marks omitted). NALCAB asserts both organizational standing on its own behalf and associational standing on behalf of its members. See First Am. Compl. ¶¶ 6–9; Pl.’s Combined Opp'n to Def.’s Mot. & Intervenor-Def.’s Mot., ECF No. 35 [hereinafter Pl.’s Opp'n], at 14, 21. The court will consider each in turn.
If an organization "claims standing ... on its own behalf, ... it must make the same showing required of individuals: an actual or threatened injury in fact that is fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by a favorable court decision." Am. Soc'y for the Prevention of Cruelty to Animals v. Feld Ent., Inc. , 659 F.3d 13, 24 (D.C. Cir. 2011). An injury in fact must be "concrete," "particularized," and "actual or imminent." Food & Water Watch, Inc. v. Vilsack , 808 F.3d 905, 914 (D.C. Cir. 2015) (internal quotation marks omitted). To demonstrate such an injury, organizational plaintiffs must show "more than simply a setback" to their "abstract social interests" or a "frustration of [their] purpose." Havens Realty Corp. v. Coleman , 455 U.S. 363, 379, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982) ; Food & Water Watch , 808 F.3d at 919. The D.C. Circuit applies a two-part test to evaluate whether an organization's alleged injury is cognizable: First, the challenged conduct must have "injured the organization's interests," and second, the organization must have "used its resources to counteract that harm." PETA v. U.S. Dep't of Agric. , 797 F.3d 1087, 1094 (D.C. Cir. 2015) (internal quotation marks omitted).
For the first step of the inquiry, the question is whether "the defendant's conduct perceptibly impaired the organization's ability to provide services"—that is, whether the challenged "conduct causes an inhibition of the organization's daily operations." Food & Water Watch , 808 F.3d at 919 (internal quotation marks and alteration omitted). NALCAB's account of its injury is as follows: NALCAB assists its member organizations in developing financial-capability programs, which "aim to enable families to reduce debt, increase savings, build credit, and ultimately, to thrive financially, by being able to meet immediate financial needs, build assets for the future[,] and create intergenerational wealth." Pl.’s Opp'n at 21 (internal quotation marks omitted); Pl.’s Opp'n, Decl. of Fernando Garcia, ECF No. 35-1 [hereinafter Garcia Decl.], ¶ 10. According to NALCAB, payday loans "threaten consumers’ abilities even to stabilize their finances" by "push[ing] borrowers into reborrowing cycles"; when that happens, "organizations serving those consumers need additional capability[ ] to be able to help their clients avoid or address the harms caused by such lending." Pl.’s Opp'n at 21. They therefore "seek extra training and technical assistance from NALCAB on strategies specific to such loans," and NALCAB must "devote more time ... to planning and delivering training on such topics" and "provide more technical assistance than it would otherwise." Id. at 21–22. In addition, according to NALCAB, "no-underwriting lending reduces the effectiveness of NALCAB's other services" because "[w]ithout strategies to address unaffordable payday and title loans, NALCAB grantees serving communities struggling with such loans cannot effectively use NALCAB's grants to build strong programs." Id. at 22. That is because "consumers trapped in unaffordable payday or title loans generally need to address those loans first " and so "organizations may not be able to implement other programs fully until they have strategies to help clients find a way out of payday or title debt." Id. So, in short, NALCAB claims that the 2020 Repeal Rule impairs its financial-capability services "by increasing organizations’ need for NALCAB services and reducing the effectiveness of other NALCAB efforts." Id. at 21.
This account of the 2020 Repeal Rule's impact on NALCAB does not establish a "concrete and demonstrable injury to its activities." Env't Working Grp. v. U.S. Food and Drug Admin. , 301 F. Supp. 3d 165, 170–71 (D.D.C. 2018) (internal quotation marks and...
To continue reading
Request your trial