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Friday, November 25, 2016

CFPB in Danger?

Well, of course it is. One of the greatest accomplishments of the Obama Administration, the Consumer Finance Protection Bureau, appears set to be defanged or dissolved in a Trump administration.

In early October, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit issued a ruling that gives Donald Trump the chance to eviscerate federal consumer protection on his first day in office. Unless the full D.C. Circuit or the Supreme Court overrules it, the decision empowers Trump to summarily fire Richard Cordray, head of the Consumer Financial Protection Bureau, effectively stymying future CFPB regulation or regulatory enforcement.
At the moment, it's really in the hands of the D.C. Circuit Court, and it's not clear to me if they're going to bother to rule on this before January:

The CFPB has appealed to the entire D.C. Circuit to re-hear the case. Unless the full court voids the Kavanaugh panel opinion, Trump will be able to fire Cordray on day one—two and a half years before the end of his statutory term—likely guaranteeing agency paralysis. Of course, Cordray may decide to step down at the end of the Obama presidency anyway, so that issue could be chiefly theoretical. 
The CFPB has only been around for five years, but it's been a productive five years. From U.S. PIRG:

  • The bureau has recovered and sent back nearly $12 Billion for 27 million consumers harmed by illegal practices of credit card companies, banks, debt collectors, mortgage companies and others.
  • The bureau has received nearly one million consumer complaints and published, so far, nearly 600,000 of these in a searchable public database.
  • The bureau has finalized a variety of new rules to protect consumers, such as in the mortgage marketplace. It is in the process of finalizing two critical new rules now open to public comment: (1) A proposed high cost small-dollar lending rule, if strengthened, would prevent consumers from being caught in the debt traps of payday and auto title lending. (2) A proposed rule limiting the language in mandatory arbitration clauses in common “take-it-or-leave-it” financial contracts would prohibit companies from using arbitration clauses to deny consumers the right to band together in class actions to have their day in court. (3) This month, the bureau also announced the first steps in developing a rule to protect consumers from unfair debt collection practices.
  • The bureau has special offices to protect students, seniors, servicemembers and persons at risk of unlawful discrimination.
  • It has issued numerous education and financial literacy materials, including “Know Before You Owe” guides for buying a home or taking out college loans; it also has a variety of guides and programs for caregivers, legal services offices, social services agencies and librarians. more about the CFPB here. 
To Republicans, of course, these are all bad things. Make no mistake, Trump, Ryan, and the other Republicans stand for nothing good.

I'm not sure if anything can be done beyond the courts overruling the Kavanaugh opinion, but if there is, you can bet Elizabeth Warren is going to have something to do with it.