Quick Answer: NACSO’s lawsuit challenging the TSR’s application to credit repair companies will likely fail due to a fatal procedural error. The CFPB and FTC argue the court lacks jurisdiction because NACSO is challenging TSR regulations that were promulgated over 19 years ago, well beyond the six-year statute of limitations.
The National Association of Credit Services Organizations (NACSO) that had previously sued the CFPB and FTC to force the TSR not to apply to credit repair groups, received a response from regulators.
I’m not sure if I even need to waste keystrokes to write the CFPB and FTC disagree with NACSO.
The latest response from the regulators seems to be based on technical issues. Feel free to read it here.
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The filing by the CFPB and FTC says, “NACSO concedes that the only final agency action it challenges is the promulgation of the TSR.5 See Doc. 29 at 1 (“[t]he Amended Complaint alleges … the final agency action to be the promulgation of the TSR”). That concession is fatal to NACSO’s case. The promulgation of the TSR occurred more than 19 years outside the APA’s statute of limitations. Because NACSO does not challenge any final agency action that occurred within the six years preceding its Amended Complaint, this Court lacks subject matter jurisdiction and the Amended Complaint must be dismissed.”
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NACSO is allegedly made up of members of the credit repair community that would feel better if the TSR went away or at least allowed them to charge advance fees.
The court document says, “When either the CFPB or the FTC brings an action to enforce the advance-fee prohibition, the defendant is generally free in its defense to challenge the TSR, and indeed, in Commonwealth Equity Group, the defendants did so. See BCFP v. Commonwealth Equity Gp., No. 1:20-cv-10991-RWZ at ECF 30 (Memorandum in Support of Motion to Dismiss, filed Sept. 30, 2020) (alleging that the FTC lacked statutory authority to promulgate the TSR’s advance-fee prohibition, and that the provision was unconstitutional). NACSO could attempt to intervene in that action but has not done so.”
The safe bet here is NACSO is going to disagree with all of this and respond with yet another document.
I’ll keep you posted.
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