PHH v. CFPB: Statutes of Limitation Apply To CFPB Administrative Proceedings: What You Need To Know

by Bradley Arant Boult Cummings LLP

The D.C. Circuit Court released its highly anticipated opinion in PHH v. Consumer Financial Protection Bureau on October 11. This post addresses one important holding from that opinion. In other posts, we will be analyzing the court’s holding regarding the constitutionality of the CFPB’s single-director structure, and the court’s determination that the CFPB violated due process by retroactively applying a new interpretation of Section 8 of RESPA.


The D.C. Circuit Court made headlines recently with its ruling that the CFPB’s structure was unconstitutional. Just as critically for companies or individuals facing enforcement actions by the CFPB, the court also held that statutes of limitation apply to CFPB administrative proceedings. In this case, the court held that the CFPB was bound by the three-year statute of limitations in RESPA, whether the CFPB was enforcing consumer financial laws through a civil action or administrative proceeding. Moving forward, if this holding survives a likely appeal by the CFPB, this decision will have major implications for government enforcement agencies and anyone that is targeted in an enforcement action.

CFPB’s Position

The CFPB took the bold position that no statute of limitations applied when the CFPB enforced consumer financial laws through administrative proceedings rather than courts. The CFPB argued that administrative proceedings were not actions that were covered by a statute of limitations. While the CFPB admitted to being bound by a statute of limitations when it brings a civil action in court, the CFPB posited that it could hold administrative proceedings any number of years after the alleged wrongdoing occurred with the only limitations on its authority being prosecutorial discretion and the equitable defense of laches.

Court Decision

The D.C. Circuit Court was unanimous in holding that action includes administrative enforcement proceedings brought by the Bureau and that statutes of limitation apply to those proceedings. In his opinion for the court, Judge Kavanaugh wrote that the CFPB’s position that no statute of limitations applied to administrative proceedings was alarming and absurd. Pointing to the Supreme Court’s unanimous opinion in Gabelli, Judge Kavanaugh emphasized the importance of time limits on penalty actions, quoting that it ‘would be utterly repugnant to the genius of our laws’ if actions for penalties could be brought at any distance of time.

Impact on Future CFPB Enforcement Actions

The CFPB can no longer rely on its belief that no statutes of limitation apply in administrative proceedings. This will have a significant impact on the CFPB’s ability to negotiate settlements regarding any wrongdoing that is alleged to have occurred prior to the relevant statute of limitations. In a number of prior orders, the CFPB has identified acts and practices that happened many years outside of an applicable statute of limitations as the basis for its conclusion that a company violated consumer financial laws.

Moving forward, the CFPB should only be able to bring an administrative proceeding or civil action within the time allotted by the relevant statute of limitations identified in the law under which the CFPB is bringing a civil or administrative action. The Supreme Court’s decision in Gabelli takes on added importance for CFPB enforcement actions as the Court held in that case that the statute of limitations for government agencies to bring enforcement actions begins to run from the date of the alleged misconduct, rather than the date the enforcement agency claims to have discovered the misconduct. In light of these rulings, future CFPB actions and orders should only identify misconduct that is alleged to have begun within the number of years provided by the relevant statute of limitations.

Impact on state enforcement actions

The CFPB is by no means the only government enforcement agency that has relied on the belief that statutes of limitation do not apply to administrative proceedings. In states where civil enforcement agencies are authorized to bring administrative actions against entities, state enforcers have made the argument that state statutes of limitation do not apply to administrative proceedings. While it will take some time for this decision to trickle down to state courts and administrative law bodies, expect to see a number of challenges to state level administrative actions that allege wrongdoing that occurred outside of a state’s statute of limitations.

What to do if you’re facing an enforcement investigation

If you find yourself in the position of being the subject of a government enforcement action, go back and take a close look at the years in which the government is alleging that any misconduct occurred. While companies may have doubted the persuasiveness of statute of limitations arguments in the past given the government’s position that no statute of limitations applied to administrative proceedings, there is now strong precedent that all government enforcement agencies must apply a statute of limitations in administrative proceedings. While you can expect the CFPB to appeal this decision, for now gone are the days where a regulator can say with a straight face that no statute of limitations whatsoever applies to administrative proceedings.

Written by:

Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.