AG Paxton Leads 11-State Brief Asking SCOTUS to Evaluate Constitutionality of the Consumer Financial Protection Bureau
Attorney General Ken Paxton led 11 states in a friend-of-the-court brief filed with the United States Supreme Court, asking it to accept a case challenging the constitutionality of the Consumer Financial Protection Bureau (CFPB).
Created in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is an independent federal agency subject to little oversight. Its leadership is not composed of a board or group of commissioners, like most federal agencies, but by a single administrator unaccountable to Congress or the President. The result is that the administrator can unilaterally enforce 19 different federal laws, covering everything from home finance and student loans to credit cards and banking practices. The structure of the CFPB violates the Constitution’s separation of powers, and the ratification of past acts by an acting director who claims to be removable at will does not change the fact that the Constitution prohibits the current structure of the CFPB as a whole.
“The CFPB’s structure allows for an unelected and unaccountable director to effectively wield more power than any official in the U.S. government aside from the President of the United States,” Attorney General Paxton said. “
This considerable power being held by a public official who is not held accountable to the President, Congress, or the People is an intolerable violation of our Constitution and a threat to the liberty of every American.”
Texas previously supported a legal challenge to the constitutionality of the CFPB and its Arbitration Rule in October 2017, filing a multi-state amicus brief with the U.S. District Court for the Northern District of Texas.
A month later, President Trump and Congress rescinded the Arbitration Rule. Attorney General Paxton also led a coalition of states with several friend-of-the-court briefs supporting the president’s authority to appoint an acting CFPB director, even though the underlying structure of the CFPB is unconstitutional.
Joining Texas in the brief are Arkansas, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, and West Virginia.
TIMELINE: NOV. 2019
Attention the State of Texas:
We would like to request an answer to two very important questions:
1. To request confirmation of receipt of our Constitutional Question as issued by the Court of Appeals for the Fifth Circuit, Case # 19-20267 on 19th Sept., 2019.
2. Whether or not you plan to respond to the Question, in light of the Supreme Court grant of SELIA LAW v. CFPB, 19-7 and your amicus brief to the US Supreme Court as per your website;
based on the pending All American case (where they snubbed the 5th Circuit and went direct to US Supreme Court). Your website intimates; Attorney General Ken Paxton led 11 states in a friend-of-the-court brief filed with the United States Supreme Court, asking it to accept a case challenging the constitutionality of the Consumer Financial Protection Bureau (CFPB).
We would also mention the recent US Supreme Court Grant; SELIA LAW v. CFPB case 19-7, as particular to our case. The second question the court added was in relation to the Dodd-Frank Act, which could be deemed VOID, dependent on the result of this much publicized case where the CFPB has agreed it is Unconstitutional. (This is discussed in detail in our recent motions at the 5th Cir.)
We would appreciate your earliest confirmation of receipt of this email.
Thanking you in advance for your assistance in this matter.
Joanna & John Burke
“We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.”― Abraham Lincoln
As solicitor general, Kyle Hawkins will lead Texas fights against the federal government
In his new job, Hawkins will fight the state’s most important legal battles in the country’s most important courtrooms.
Related Cases, Motions and Information
Via Email: Oct 5, 2020 to CA5
Dear Clerk of Court
On the 21st of Sept, en banc held oral argument in the case of CFPB v. All American Check Cashing Inc., case #18-60302. This is pertinent to our appeals, cases #19-20267 and 20-20209.
However there is no available MP3 download on your website as at 10/5/2020, some 2 weeks later.
We would respectfully ask when is this oral argument going to be available on your website at your oral argument recordings section?
Thanking you in advance for your assistance in this matter.
Case 18-60302 was not heard on 9/21/20, therefore there is no recording to make available. The case was removed from the calendar on 9/8/20 and has been placed in abeyance pending a decision in 2 US Supreme Court cases, 19-422 & 19-563.
TIMELINE: JULY 2019
Email to Kyle Hawkins in his Capacity of Solicitor General of Texas
July 31, 2019
Dear Mr. Hawkins
We have not met but we read with great interest your amici on behalf of the State of Texas (and others) questioning the constitutionality of the CFPB.
While we agree with your summary argument (p.19), we are super disappointed with Texas.
We are confident that we do not need a formal introduction and you are fully cognizant of our current situation and know of us by name, John and Joanna Burke.
So this letter is double-pronged.
DEBT COLLECTION IN TEXAS
After being redirected to many state agencies and departments, we were finally directed to your offices to answer one main question;
Who is responsible for Texas Finance Code 392 and specifically 392.101?
We also reached out with related questions in our letter dated March 6th, 2019.
Your office declined to acknowledge nor reply.
We sent a reminder on May 8th, 2019 with a copy of our March 6th letter attached.
Your office declined to acknowledge nor reply.
We are formally asking you here, again, for an answer to that specific question.
Despite your colleague, Mr Mateer’s wonderful legal history and lessons about the separation of State and Federal functions when corresponding with the Ways and Means Committee, ( See Jeffrey C. Mateer, First Asst AG, Texas OFFICE OF THE ATTORNEY GENERAL’S LETTER TO WAYS & MEANS COMMITTEE, MAY 15TH, 2019) TX SML is subordinate and reports directly to the CFPB.
So how can you stand by the statements and arguments in that letter when there is a quasi-control over your State agency?
RETURNING TO THE CFPB
We were reading the Selia Law v CFPB case where you just recently submitted an Amicus Brief.
“This Court should grant review of this important constitutional issue now and hold that Congress may not insulate a principal officer with authority to set wide-ranging federal economic policies from presidential oversight.”
CFPB, LIKE TEXAS, DOES NOT HELP IT’S OWN CONSUMERS
You have so far refused to help Senior Citizens in the State of Texas who were asking for assistance from the department responsible for oversight and decision-making.
So, we were wondering if you have time to assist us with the CFPB, who have been most unhelpful and have contradicted their own watchdog status by objecting to our request to intervene in the highly publicized case of the CFPB and the State of Florida v Ocwen.
Respectfully, we would like to ask for your help, if you are willing and available.
THE FIFTH CIRCUIT WAS WRONG IN OUR CASE RELYING ON AN ERIE GUESS
We have been fighting a miscarriage of justice regarding our homestead. “Deutsche Bank” started a foreclosure proceeding in 2011 and we were granted judgment twice at the lower court (Deutsche Bank National Trust Company v. Burke (4:11-cv-01658) District Court, S.D. Texas) only to be reversed on an ‘erie guess’ and incorrect interpretation of 170+ year property laws by the Court of Appeals for the Fifth Circuit, LA. (Deutsche Bank v Burke, 15-20201 + 18-20026). We are now pursuing 2 civil actions which have been removed to SDTX.
SUPREME COURT OF TEXAS REVERSES FIFTH’S ERIE GUESS
If you want to know why the “erie guess” is wrong, just read the opinion in Priester (5th Cir., #18-40127 – “Erie guesses are just that—guesses. Hopefully we get them right, but sometimes we get them wrong…”)
THE SECOND REQUEST AND WHY WE ARE WRITING TO YOU REGARDS CFPB
The reason we are writing is in respect of our intervention application for the case detailed below:
INTERVENORS – Civil Action No. 17-80495-CIV-MARRA
CONSUMER FINANCIAL PROTECTION BUREAU vs. OCWEN FINANCIAL CORPORATION
We applied to Intervene in the above case. After the initial denial, (which we had to remind the court was pending after waiting nearly 6 months to obtain an answer from the court, which has become a bit deja vu) we submitted a Motion for Reconsideration (Doc.408) which was also denied (Doc.411).
WE ASKED FOR, AT MINIMUM, PERMISSIVE INTERVENTION – CITING A JOURNALIST WITH NO ECONOMIC INTEREST IN HIS CASE, WHO WAS GRANTED PERMISSION IN THE SAME COURT – YET OUR INTERVENTION WAS DENIED IN TOTALITY.
We wondered, since you are a constitutional expert and would know the law regarding open records, if the Judge’s arguments denying us (at least) access to the sealed exhibits is against the Constitution. We believe so.
If a journalist could get access (as discussed in our motion) to sealed exhibits, how on earth are we not allowed, when we have a direct and economic interest?
The question is relevant to your office as we have an appeal at the Fifth Circuit, Burke v Ocwen, #19-20267 and the purpose of the intervention was to obtain new evidence to help our appeal case.
We would like to know if Texas will support it’s Senior Citizens and the Constitution and submit an Amicus Brief in that case. We are appealing the decision.
We look forward to your thoughts and comments and keen to learn if Texas will support, or abandon, its elderly Citizens, once again. We certainly hope the former prevails.
Thanking you so much in anticipation.
/s/ Joanna and John
Defendants next move for summary judgment on Plaintiff’s claims for violation of §§ 392.301(a)(8), 392.303(a)(2), and 392.101 of the TDCPA, on the grounds that BONY is not a third- party debt collector. (doc. 51 at 17.)
Plaintiff alleges that her mortgage was in default when MERS assigned it to BONY. (doc. 9 at 3.) BONY purportedly failed to post the “required” bond with the secretary of state as required under § 392.101 before engaging in debt collection activities, including foreclosing on the Property. (Id. at 3, 17.) She claims that “BOA was the loan servicer and agent for BONY” during the relevant time period. (Id. at 3.) She concludes that since neither BONY nor BOA were “authorized to collect” on her mortgage, the foreclosure was an action “prohibited by law.” (Id. at 17.) She further argues that since the “foreclosure was improper,” all of the “fees incurred as a result of the foreclosure were unauthorized.” (Id.)
“The TDCPA prohibits debt collectors from using various forms of threatening, coercive, harassing or abusive conduct to collect debts from consumers.” Merryman v. JPMorgan Chase & Co., No. 3:12-CV-2156-M BH, 2012 WL 5409735, at *4 (N.D. Tex. Oct. 12, 2012), rec. adopted, 2012 WL 5409749 (N.D. Tex. Nov. 5, 2012). Subsection 392.301(a)(8) provides:
“In debt collection, a debt collector may not use threats, coercion, or attempts to coerce that employ . . . threatening to take an action prohibited by law.”
Tex. Fin. Code Ann. § 392.301(a)(8).
During debt collection, § 392.303(a)(2) prohibits a debt collector from using “unfair or unconscionable means that employ”, “collecting or attempting to collect interest or a charge, fee, or expense incidental to the obligation unless the interest, or incidental charge, fee, or expense is expressly authorized by the agreement creating the obligation or legally chargeable to the consumer.” Tex. Fin. Code Ann. § 392.303(a)(2).
The TDCPA requires “[t]hird-party debt collectors” to obtain a $10,000 “surety bond” from an authorized surety company and file a copy with the secretary of state prior to engaging in debt collection. Tex. Fin. Code Ann. § 392.101. The TDCPA tracks the definition of “third-party debt collector” of the Federal Debt Collection Practices Act (FDCPA).
See id. § 392.001(7) (“Third-party debt collector means a debt collector, as defined by 15 U.S.C. Section 1692a(6)” of the FDCPA). The FDCPA defines “debt collector” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6).
Section 1692a(6) expressly excludes “any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was not in default at the time it was obtained by such person.” Id. § 1692a(6)(F)(iii) (emphasis added).
Courts have therefore held that “a debt collector does not include the consumer’s creditors, a mortgage servicing company, or an assignee of a debt, as long as the debt was not in default at the time it was assigned.”
CA Partners v. Spears, 274 S.W.3d 51, 79 (Tex. App.—Houston[14th Dist.] 2008, pet. denied) (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)) (emphasis added).
In short, “[i]f a debt is in default at the time the assignee acquires his interest in the debt, he is a ‘third-party debt collector’ within the contemplation of  section 392.101(a) of the [TDCPA]”
Adams v. Bank of Am., No. 4:10-CV-709, 2011 WL 5080217, at *7 (E.D. Tex. Oct. 26, 2011), aff’d, 475 Fed. App’x 526 (5th Cir. 2012).