The Consumer Financial Protection Bureau (CFPB) sued a biweekly mortgage payment servicer (the servicer) and its owner for deceptive and abusive practices under the Consumer Financial Protection Act of 2010 (CFPA). The servicer marketed a program promising substantial monthly and annual savings on mortgage payments, but the CFPB alleged that the servicer misled customers about the immediacy of their savings, the servicer’s affiliation with their lenders, and the uniqueness of the services offered. After a bench trial, the district court found the servicer liable and imposed civil penalties. The servicer appealed. The Ninth Circuit remanded the case to the district court to determine the applicability of relevant Supreme Court and Ninth Circuit opinions issued while the first appeal was pending. After the district court judgment on remand, the servicer again appealed, challenging findings of fact and the constitutionality of enforcement because of the suit’s filing before the Seila Law v. CFPB decision. 591 U.S 197, 213, 238 (2020). The servicer also claimed that the statute-of-limitations barred the claim that it did not constitute a “seller” under the Telemarketing and Consumer Fraud and Abuse Prevention Act (TCFAPA) and that the district court had erred in denying its counterclaims and excluding evidence.
In Consumer Fin. Prot. Bureau v. Nationwide Biweekly Admin., Inc., No. 24-5940, 2025 WL 3205699, 2025 U.S. App. LEXIS 29944 (9th Cir. Nov. 17, 2025) (opinion not yet released for publication), the Ninth Circuit affirmed the district court’s findings. The court held that the district court’s factual findings of deception were not clearly erroneous, were supported by substantial evidence in the trial record, and would not be overturned under the deferential standard of review. Wash. Mut., Inc. v. United States, 856 F.3d 711 (9th Cir. 2002). The court also rejected the servicer’s argument that the enforcement action was invalid due to the CFPB director’s former for-cause removal protections, citing binding precedent under CFPB v. Cashcall, Inc., 35 F.4th 734, 742 (9th Cir. 2022). The court applied Cashcall to conclude that the servicer did not produce specific evidence showing a constitutional harm from the for-cause removal provision when it was in effect, or that it failed to show “that the CFPB would not have pursued the enforcement action here were it not for such a culture [of recklessness].” The court also ruled that the action was timely because the CFPB neither discovered nor reasonably should have discovered the specific violations before the limitations period had expired. The court also analyzed the servicer’s argument that it was not a “seller” covered by TCFAPA because it did not cold-call customers or execute payments over the phone. However, the servicer did qualify as a seller because it “‘offer[ed] to provide’ financial services to customers who called it.” 16 C.F.R. § 310.2(ee). Furthermore, the court held that the servicer engaged in telemarketing within the definition of the TCFAPA because the servicer “sent out mailers and operated a call center that fielded millions of telephone calls.” The court upheld the district court’s evidentiary rulings and rejection of the servicer’s counterclaims. The court found no abuse of discretion and no due process violation. On appeal, the servicer argued that the district court applied the wrong legal standard, and that only a “connection” between wrongful government conduct and reputational harm was required. However, the court held that the servicer failed even under the connection standard. Finally, the court held that the district court did not abuse its discretion when it excluded exhibits and the servicer’s expert witness testimony. The court ruled the exhibits were irrelevant and held that the expert witness only relied on litigation documents and news reports. Therefore, the court affirmed the judgment against the servicer.
By Deanna Dulske [email protected]
Edited By Andrew Fielden [email protected]
Edited By Olivia Lewis [email protected]
Edited By Taylor O’Brien [email protected]