TransUnion Fights CFPB in 'Groundhog Day' Lawsuit

Source: American Banker

TransUnion, one of the three large credit bureaus, never wanted to be in litigation with its regulator the Consumer Financial Protection Bureau.

But the Chicago-based credit reporting agency is fighting back in court after the CFPB sued the company and a former executive in April for allegedly violating a previous 2017 order. 

The lawsuit is being closely watched because TransUnion already paid a $3 million fine and $13.9 million in restitution to consumers to resolve the 2017 order— only to be sued for the same violations five years later. 

CFPB Director Rohit Chopra has made cracking down on repeat corporate offenders a top priority. But financial institutions are concerned that Chopra is effectively punishing companies multiple times for the same violations. 

TransUnion could prove to be a test case for the CFPB at a time when the business community led by the U.S. Chamber of Commerce, and with the support of Republican lawmakers, are targeting Chopra for what they perceive to be the bureau’s aggressive agenda. Suzanne Clark, the president and CEO of the U.S. Chamber, has been a director on TransUnion’s board since 2017.

The case also is unique because TransUnion is arguing that the CFPB’s complaint should be dismissed on constitutional grounds as well. TransUnion argues that the CFPB’s funding from the Federal Reserve violates the constitution’s appropriations clause.