Consumer Financial Protection Bureau v. National Collegiate Master Student Loan Trust, 96 F.4th 599

Fifteen statutory trusts (the "Trusts") were created to acquire and service over 800,000 private student loans; they have no employees and outsource all servicing and debt collection.
The CFPB began investigating the Trusts’ debt collection practices in 2014 and initiated enforcement proceedings in 2017 for alleged violations.
The District Court addressed two main questions: whether the Trusts are "covered persons" under the Consumer Financial Protection Act (CFPA), and whether the CFPB’s enforcement action required ratification due to constitutional defects in agency structure at the time of filing.
The Supreme Court’s decisions in Seila Law and Collins addressed the constitutionality of agency head insulation from presidential removal, affecting the legal analysis in this case.
The District Court found that the Trusts were covered persons and that subsequent ratification was unnecessary absent specific harm from the unconstitutional structure. The Trusts appealed on both questions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are the Trusts "covered persons" subject to CFPB enforcement under the CFPA?	Trusts are not covered because they do not themselves engage in servicing or debt collection—these are outsourced to third parties.	CFPB argues the Trusts "engage" in these activities by contracting for them as part of their business.	The Trusts are covered persons—they engage in business activities (loan acquisition, servicing, collections) as defined by statute.
Was CFPB required to ratify this action due to constitutional defect in removal protection for its director?	Trusts argue ratification was necessary and that any ratification after the statute of limitations was ineffective, making the suit untimely.	CFPB contends Collins clarified that ratification is not required absent a showing of "compensable harm" from the removal restriction; no such harm existed here.	No ratification was required. There was no actual or compensable harm, and thus the enforcement action stands.

Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020) (holding the CFPB director's for-cause removal protection unconstitutional, but severable from the statute)
Collins v. Yellen, 141 S. Ct. 1761 (2021) (agency actions by a properly appointed but improperly insulated director are not void absent demonstrated harm from the removal provision)
Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022) (interpreted meaning of "engaged in" statutory language broadly)
Barbato v. Greystone Alliance, LLC, 916 F.3d 260 (3d Cir. 2019) (passive debt owners can be debt collectors under federal debt collection law)