CFPB Issues Final Rules (Part 4 Of 4): Compliance With The Equal Access To Justice Act

On Wednesday June 6, 2012, the Consumer Financial Protection Bureau ("the Bureau") also issued an interim rule with request for public comment, on the rules drafted to bring the Bureau into compliance with the Equal Access to Justice Act ("EAJA"). The rules set out the guidelines for payment of attorney's fees for certain parties, excluding the United States. The Bureau followed closely to the model rules created by the Administrative Conference of the United States. While the interim rule outlines various modifications made to modernize the model rules, the Bureau adopted the majority of the model rule.

The interim rule provides for qualified individuals to receive an award of legitimate expenses and attorney fees if they prevail in the adversary adjudication or the Bureau's demand is substantially in excess of and unreasonable in comparison to the decision of the adjudicative officer. It applies to any adversary or adjudicative proceeding before the Bureau.

Eligibility under the rules is limited to individuals with a net worth of less than $2 million and corporations, associations and other organizational entities whose net worth is not greater than $ 7 million. The rule delineates various entities that fit this criteria and also outlines how net worth and other relevant criteria (such as number of employees) should be calculated.

Under the interim rule, an eligible, prevailing party can gain fees and expenses incurred after the initiation of an adversary proceeding. The Bureau bears the burden of proof to show that their position was substantially justified even in...