Debt Buyers and investors file motion to dismiss a CFPB FDCPA complaint filed in January stating the CFPB does not establish standing for its claims in its first amended complaint (FAC). Additionally, the CFPB Fails to Plead Violations Traceable to the Individual Defendants. The CFPB’s claims also fail because the Individual Defendants are Not “Covered Persons and the Claims Fail for Lack of Fair Notice and Violation of Due Process, according to the motion.

"The judge may allow the CFPB to submit a sur-reply to allow them to say more about whether the CFPA includes debt investors as 'covered persons'," said Sarah J. Auchterlonie of BROWNSTEIN HYATT FARBER SCHRECK, LLP, attorneys for the Defendants. "A sur-reply ordinarily allows a party to respond to new arguments raised in a response," said Auchterlonie, "but we were careful not to raise new arguments, so it appears the CFPB just wants to have the last word."
Responding to what may be the further progress of the case, Auchterlonie said that resolving the case could take a long time: "we win on the motion to dismiss and the judge allows the CFPB to amend its pleading, or we win with no leave to amend and the CFPB appeals to the second circuit."

In support of the motion to dismiss defendants argue: The CFPB Fails to Plead Redressability and the FAC Does Not State Actionable Third-Party Liability Claims. The FDCPA Does Not Allow Vicarious Liability for an Uninjured Third-Party Plaintiff. Additionally, the motion argues that the CFPA’s Substantial Assistance Provision and Covered Person Requirements Preclude Vicarious Liability under the Act. 

The CFPB originally filed the complaint in the U.S. District Court for the Western District of New York against United Debt Holding (UDH), JTM Capital Management (JTM), United Holding Group (UHG), and their owners and amended the complaint to correct certain facts. "The CFPB alleges all three companies allowed third-party collection companies to deceive consumers and placed or sold debt portfolios to collection companies engaged in unlawful behavior, according to a news release from the CFPB, After publicizing egregious complaints naming citing three investors by name, the news release ends by stating, "The complaint is not a final finding or ruling that the defendants have violated the law."
"Our clients are investors who add liquidity to the consumer credit system. They operate a first-class compliance program that redresses issues when they arise. It’s telling that the CFPB did not allege that consumers were harmed. Our clients had to stand up to the CFPB's false narrative and are taking one for the team with this litigation," Auchterlonie added.