Supreme Court Narrows Injunction Power: Why Mortgage Executives Should Pay Attention This July 4th
On June 27, 2025, the U.S. Supreme Court issued a landmark decision in Trump v. CASA, curbing the power of federal courts to issue “nationwide” injunctions—orders that block laws or regulations across the entire country, even for parties not involved in a case.
While the case itself involved immigration, the implications for the financial services industry – particularly for mortgage companies – are real and immediate. Read the Supreme Court ruling here.
Why This Matters for Mortgage Executives
Nationwide injunctions have long been used in high-stakes litigation involving agencies like the Consumer Financial Protection Bureau (CFPB), the Department of Labor (DOL), the Federal Trade Commission (FTC) and others. In recent years, they have been a tool to quickly halt new rules or enforcement actions regardless of whether a company was involved in the underlying lawsuit.
That tool is now severely limited.
Bottom line: If your company is not a plaintiff, or at least a member of a plaintiff trade association, you may no longer benefit from court-ordered regulatory relief.
Key Impacts on Financial Services Litigation
1. Narrower Scope of Court Orders
Federal courts will now limit injunctions to actual plaintiffs or their trade associations.
Industry-wide injunctions are largely off the table unless structured through class actions.
2. Trade Group Litigation Carries New Limits
Trade associations can still sue on behalf of their members—but relief likely extends only to those members.
Non-members must join the lawsuit directly or seek inclusion in a certified class to benefit.
3. Class Actions May Rise, but They’re Complex
Rule 23(b)(2) class actions remain a path to broad injunctive relief.
But certification is difficult, expensive, and slow—especially in fast-moving regulatory disputes.
What C-Suite Leaders Should Do Now
First, regardless of political leanings, take a moment to reflect how blessed we are to live in this amazing, even if sometimes imperfect, capitalist-based constitutional republic.
Second, to protect your company from fragmented or selective enforcement risk:
Audit your trade association memberships. Confirm you’re a dues-paying, active member of any group involved in regulatory litigation relevant to your business.
Track regulatory litigation closely. Identify rules under challenge that could materially impact your mortgage operations or compliance posture.
Assess litigation strategy. Consider whether to join a suit directly or evaluate class action opportunities where industry-wide relief is no longer guaranteed.
Prepare for uneven enforcement. Expect scenarios where only some lenders receive court-ordered relief, and others must scramble to catch up.
Coordinate with legal early. Relief will no longer be a passive benefit of being in the same industry. You must take deliberate steps to be protected.
The Broader Takeaway: Separation of Powers Reaffirmed
While some in the industry may see this ruling as limiting, others will celebrate it as a win for constitutional order. Federal courts should be more restrained, so they do not overreach beyond the disputes actually before them.
But in practical terms, the burden of securing relief now shifts squarely onto the companies themselves.
Need Help Evaluating Your Exposure?
If your company relies on trade associations or follows regulatory litigation that could impact your operations, now is the time to evaluate your legal position. The new post-CASA landscape demands a more intentional and proactive litigation strategy.
For legal guidance tailored to your mortgage business, contact:
Troy Garris
troy@garrishorn.com