As previously noted on this blog, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule in June 2012 to implement the Equal Access to Justice Act. At the time, the CFPB requested public comment on the interim final rule.
Nearly two years later, the CFPB has now finalized the rule with no changes.
The final rule provides for eligible individuals and entities who are parties to adversary proceedings before the CFPB to receive awards of certain expenses and attorney fees if they prevail in the adversary proceeding or if the CFPB’s demand is substantially in excess of, and unreasonable in comparison to, the decision of the adjudicative officer.
Parties must meet one of the following eligibility criteria:
Under the final rule, an eligible, prevailing party can gain fees and expenses incurred after the initiation of an adversary proceeding. The CFPB bears the burden of proof to show that its position was substantially justified even in light of its defeat.
The party must submit an application, a net worth exhibit, and full documentation of fees and expenses. The rule carves out certain exceptions and requirements for each. The application must be filed no later than 30 days after the final disposition. The proceedings for awarding of fees will be stayed until there is a final disposition.
The rule also outlines the process for filing, serving, and answering the application. The rule leaves room for commenting on the application, replying to the Bureau’s answer, and for settlement of the award amount. The award is determined using the written record unless further proceedings are required. The hearing officer is to issue a recommended decision within 60 days after time for filing a reply or after further proceedings. The decision can be appealed by the party or the Bureau. Additionally, a party can seek judicial review. If there is no appeal filed, the Director will adopt the recommendation within 30 days. Lastly, the applicant is instructed to submit a copy of the final decision with an accompanying letter waiving the right for judicial review to secure payment.