In two cases challenging regulatory actions by the Biden-era Consumer Financial Protection Bureau (CFPB), Brownstein secured major wins for the collections industry. First, in litigation filed in Texas, Brownstein represented ACA International (ACA) in a challenge of a rule eliminating the ability for banks, credit unions and other lenders to consider medical debt when making credit decisions. Brownstein argued, along with aligned trade associations, that the medical debt rule exceeded the CFPB’s statutory authority, violated the Administrative Procedure Act and violated the Constitution, among other legal infirmities. Second, in litigation filed in Washington, D.C., Brownstein again represented ACA in a challenge of a Biden-era advisory opinion that changed legal obligations under the Fair Debt Collections Practices Act (FDCPA) and Regulation F, without following the requirements of the Administrative Procedure Act.
In both cases, Brownstein advocated before the administration and the courts and secured major wins for ACA International, lenders, medical providers and the American credit system.
Cornerstone Credit Union League, et al. v. Consumer Financial Protection Bureau, et al.
ACA and the Consumer Data Industry Association (CDIA) brought parallel challenges to the Biden-era rule that both prohibited credit reporting agencies from including medical debt information in consumer reports and forbade creditors from considering medical debt information when making credit decisions. Advocating for ACA, Brownstein filed a preliminary injunction motion, urging the court to enjoin enforcement of the rule.
Brownstein argued:
• The CFPB does not have the statutory authority to issue the final rule. Under both the FCRA’s plain text and the major questions doctrine, the bureau has exceeded its lawfully delegated power.
• Because the rule is not narrowly tailored, content-based and prevents the communication of accurate information without a legitimate state interest, it violates the First Amendment.
• The final rule violated the Administrative Procedure Act and did not provide sufficient research or data to support many of its claims, that some argued were politically driven.
After the change of administration in January 2025, Brownstein continued to educate key stakeholders in Congress and the administration about the legal and practical problems associated with the rule.
The Trump administration CFPB amended its legal position and argued before the court that the Biden-era rule was unlawful, grossly exceeded the statutory limits and ought to be set aside. In CDIA’s case, the CFPB agreed to file a joint motion to settle the case by vacating the rule. The court agreed to that joint motion.
The court held that FCRA Section 1681(g)(1) permits CRAs to include a consumer’s medical debt information in their consumer report, provided that the information is coded to hide the consumer’s underlying health condition, procedure and provider. Additionally, the court held that FCRA categorically barred creditors from using medical information when making credit decisions, unless that information is properly coded. In other words, so long as medical information is coded, it is statutorily permitted to be used in credit decisions.
If permitted to move forward, the rule would have effectively overridden a congressionally authorized statute and implemented an entirely new regulatory regime. The opinion rejects that attempt and provides a roadmap for future courts to do the same. The strength of the opinion’s conclusions and wording will make it difficult for future administrations to rerun the same arguments and attempt the same action.
Additionally, the court’s decision that FCRA expressly allows CRAs to report medical information (and allows creditors to consider it) will assist potential challenges to state laws that would prohibit such actions. If a federal statute expressly allows an action, a state statute may not prohibit that same action—the state statute would be preempted by federal law. Several states, including New York, adopted statutes purporting to bar the reporting of medical debt. The opinion would counsel that those state laws are preempted by FCRA and are unlawful.
ACA International, et al. v. Consumer Financial Protection Bureau, et al.
Representing ACA, Brownstein challenged an October 2024 advisory opinion released by the CFPB. The advisory opinion would have imposed novel restrictions and obligations on collectors seeking to collect on past due medical debts.
Among other requirements, the advisory opinion required collectors to step into the shoes of health care providers and audit medical procedures to ensure the providers’ compliance with various laws and regulations. Additionally, the advisory opinion required collectors to become intimately involved in the medical coding process (a special skill usually reserved for in-house specialists at a medical care facility) and to substitute their judgment for the judgment of health care providers.
These requirements were untethered to statutory text and were promulgated without adherence to the required procedures included in the Administrative Procedure Act.
Following efforts to educate the administration and key stakeholders in Congress, the CFPB withdrew the opinion in May 2025 and a month later filed a status report effectively condemning the advisory opinion’s legality. The CFPB acknowledged that the advisory opinion constituted a “major rule” under 5 U.S.C. § 804(2) and declared that notice and comment procedures (as required by the Administrative Procedure Act) “would have been preferable so that the Bureau could provide clearer compliance guidance, tailor specific requirements based on costs and benefits, and consider the impact on small businesses.”
The withdrawal of the advisory opinion was a major win for the collections industry, and the CFPB’s acknowledgement that notice and comment procedures should have been followed is important precedent moving forward.
Looking Ahead
Both the Cornerstone and ACA International cases demonstrate the value of comprehensive, all-inclusive advocacy campaigns. In both cases, Brownstein advocated before both the courts and the administration, leading to two major wins.
In Cornerstone, the court’s opinion opens the door to challenges of state laws that restrict the reporting of medical debt information. While the Cornerstone opinion will be persuasive (as opposed to controlling) precedent, it serves as a roadmap when challenging other, similar laws. Challenges to state laws restricting medical debt will start off on a much stronger footing given the Cornerstone opinion.
In ACA International, the CFPB’s acknowledgment that Biden officials should have utilized notice and comment procedures will serve as powerful precedent moving forward. Now, future challenges to CFPB actions can point to the CFPB’s admission in ACA International and ask that notice and comment procedures are utilized. This will be an important tool when more aggressive regulators someday take back control.
