On April 25, the CFPB filed a joint stipulation of voluntary dismissal with prejudice in the U.S. District Court for the District of Delaware. This case stems from the CFPB’s 2017 enforcement action against a collection of 15 Delaware statutory trusts that furnished over 800,000 private loans, in which the CFPB alleged that such trusts were covered persons under Dodd-Frank, and planned to argue that the trusts were liable for misconduct by third party servicers and debt collectors engaged by the statutory trusts. Allegations of misconduct included filing lawsuits against consumers for private student loan debt that the holders could not prove was owed or that were outside the applicable statute of limitations (covered by InfoBytes here.)

The case had previously worked its way through the court system, with the U.S. District Court for the District of Delaware ruling in December of 2021, that a securitization trust is a “covered person” under Dodd-Frank (covered by InfoBytes here), which the Third Circuit affirmed (covered by InfoBytes here). In January, prior to the change in administration, the trusts and the CFPB agreed to a settlement in which the trusts would pay $2.25 million in restitution. However, under the new administration, the CFPB changed course, and sought to dismiss the lawsuit with prejudice.

The notice of voluntary dismissal indicates that both parties have agreed to voluntarily dismiss the case in its entirety, with prejudice. Each party will bear its own costs, expenses, and attorneys’ fees.

Visit our resource center, CFPB Pause: Where From Here?, to stay on top of the latest and what it may mean for the federal and state regulatory and enforcement landscape.