UNITED STATES COURT OF APPEALS September 15, 2022

Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

INTEGRITY ADVANCE, LLC; JAMES R. CARNES,

Petitioners,

v. No. 21-9521

CONSUMER FINANCIAL PROTECTION BUREAU,

Respondent. _________________________________

Petition for Review of an Order from the Consumer Financial Protection Bureau (Consumer No. 2015-CFPB-0029) _________________________________

Richard J. Zack (Michael A. Schwartz and Christen M. Tuttle, with him on the brief), of Troutman Pepper Hamilton Sanders LLP, Philadelphia, Pennsylvania, for Petitioners.

Lawrence DeMille-Wagman, Senior Litigation Associate (Stephen Van Meter, Acting General Counsel; Steven Y. Bressler, Acting Deputing General Counsel; and Kevin E. Friedl, Senior Litigation Counsel; Consumer Financial Protection Bureau, with him on the brief) Washington D.C., for Respondent. _________________________________

Before TYMKOVICH, Chief Judge, PHILLIPS, and McHUGH, Circuit Judges. _________________________________

PHILLIPS, Circuit Judge. _________________________________ Appellate Case: 21-9521 Document: 010110739760 Date Filed: 09/15/2022 Page: 2

Integrity Advance, LLC operated as a nationwide payday lender offering short-

term consumer loans at high interest rates. In 2015, the Consumer Financial Protection

Bureau (“Bureau”) brought an administrative enforcement action against Integrity and its

CEO, James Carnes (collectively, “Petitioners”). The Notice of Charges alleged

violations of the Consumer Financial Protection Act (“CFPA”), the Truth in Lending Act

(“TILA”), and the Electronic Fund Transfer Act (“EFTA”).

Between 2018 and 2021, the Supreme Court issued four decisions—Lucia v. SEC,

Seila Law v. CFPB, Liu v. SEC, and Collins v. Yellen—that bore on the Bureau’s

enforcement activity in this case. These opinions decided fundamental issues such as the

Bureau’s constitutional authority to act and the appointment of its administrative law

judges (“ALJ”). The series of decisions led to intermittent delays and restarts in the

Bureau’s case against Petitioners. For instance, two different ALJs decided the present

case years apart, with their recommendations separately appealed to the Bureau’s

Director. Ultimately, the Director mostly affirmed the recommendations of the second

ALJ.

Petitioners have appealed the Director’s final order to our court under 12 U.S.C. §

5563(b)(4). They ask that we vacate the order, or at least remand for a new hearing,

mainly arguing that the Director’s order didn’t give them the full benefit of the Supreme

2 Appellate Case: 21-9521 Document: 010110739760 Date Filed: 09/15/2022 Page: 3

Court’s rulings. For the reasons below, we reject Petitioners’ various challenges and

affirm the Director’s order.

BACKGROUND

I. Factual Background

From 2008 to 2013, Integrity operated nationwide as a payday lender. It was

founded and run by James Carnes, its CEO.1 The company offered short-term, small-

dollar consumer loans at high interest rates. Integrity’s loans usually ranged from $100 to

$1,000 and were its only financial product. Though the law usually allows for non-

coercive contractual arrangements between private parties, it sometimes requires

heightened disclosure for loan agreements between parties of disparate bargaining power.

As relev

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