On June 25, defendants in a consumer lending enforcement action filed a motion in the U.S. District Court for the Central District of California seeking relief from a post-remand judgment under Federal Rule of Civil Procedure 60(b)(5) and (b)(6). As previously covered by InfoBytes, the U.S. Supreme Court denied the defendants’ certiorari petition on March 2, in a case in which the 9th Circuit upheld the CFPB’s approximately $134 million legal restitution award against a nonbank lender for alleged unfair, deceptive, or abusive acts or practices in connection with high-interest consumer loans.

The motion argues that the original $10.28 million civil penalty was satisfied in 2018, that the CFPB switched its remedial theory from equitable to legal restitution mid-litigation — a theory it conceded was never raised at trial — and that intervening U.S. Supreme Court decisions undermined the judgment’s legal foundation. The defendants further contend that the CFPB formally repudiated the enforcement priorities underlying the case through an April 2025 memorandum from the CFPB’s chief legal officer (covered by InfoBytes here), which rescinded prior enforcement guidance, directed the CFPB to respect federalism, and shifted focus away from nonbank enforcement. The motion argues that the CFPB has dismissed or modified several other enforcement actions under its current leadership but has offered no principled basis for continuing to pursue the full judgment in this case.

The motion also alleges that the defendants began seeking a settlement as early as March 2025, with initial outreach going unanswered for months. According to the motion, substantive negotiations began in July 2025, during which the CFPB allegedly provisionally accepted a settlement framework that includes a consumer redress fund, waiver of approximately $24 million in prejudgment interest, and a $10 million reduction in civil penalties.

Supporting declarations from the defendants’ general counsel and outside counsel assert that the CFPB initially agreed to high-level settlement terms and indicated it was moving through internal approval. However, the defendants allege that on May 1, the CFPB’s chief legal officer reversed course, opting to pursue collection on the post-remand judgment instead of settling. A joint statement filed on June 30 stated that the parties were unable to reach agreement, with the CFPB maintaining that neither Rule 60(b)(5) nor Rule 60(b)(6) supports the motion.