[T]he process of rolling back the mandatory underwriting requirement provisions of the 2017 small-dollar lending rule was, at best, highly improper. We urge you to suspend the finalization of the rule pending a full investigation of the facts. There is a strong case to be made that the CFPB needs to restart the regulatory process entirely.
Linda Jun, a senior policy counsel for Americans for Financial Reform, a consumer advocacy group: “To this day, despite many people asking, they haven’t provided anything about the basis for changing this rule beyond some vague references to new research. It’s hard to see the reversal as anything other than political.”
Every federal agency must dedicate all regulatory resources to addressing COVID-19 and the enforcement of rules meant to protect public health, consumers, investors and retirees, and the integrity and stability of the markets. The pursuit of any non-crisis-related rulemaking would be a misallocation of limited resources that distracts needed focus from U.S. public health and welfare, and financial stability.
The U.S. Supreme Court is preparing to hear oral arguments on Tuesday, March 3, on Seila Law v. Consumer Financial Protection Bureau (CFPB). The case is about whether the authority of this independent agency, led by a single director who can be removed only for cause, violates the separation of powers.
Kathleen Kraninger, the current director of the Consumer Financial Protection Bureau, told an audience of bankers at a November 2019 industry gathering that “you are really helping drive the agenda.” Unfortunately for the public and for consumer financial protection, the Kraninger agenda and the Wall Street lobby’s agenda are indeed all too similar. Since the Senate confirmed Kraninger on a party-line vote, she has steered the CFPB in an anti-consumer direction, making it easier for Wall Street and predatory lenders to rip people off and to discriminate against people of color.
Consumer advocates and academics criticized the policy, saying the agency was effectively tying its own hands. “It seems that the agency is trying to highly constrict the use of ‘abusive’ by using terms that do not fully capture the way lenders behave,” said Linda Jun, an attorney at the advocacy Americans for Financial Reform.
The amici submitting this brief are consumer organizations with an interest in the constitutional analysis that determines whether the structure of the Consumer Financial Protection Bureau (CFPB) is consistent with separation-of-powers principles … The amici submitting this brief are consumer organizations with an interest in the constitutional analysis that determines whether the structure of the Consumer Financial Protection Bureau (CFPB) is consistent with separation-of-powers principles …
“The CFPB is dropping the ball on enforcing and drafting federal rules to actually protect the public from rip offs and discrimination in lending,” said Linda Jun, senior policy counsel at Americans for Financial Reform Education Fund. “Creating and hiring a new task force stacked with industry representatives and ideological opponents of regulation is one more move that runs directly counter to the CFPB’s basic mission.”
On January 9, 2020, 29 organizations sent a letter to the Consumer Financial Protection Bureau regarding the importance of applying Truth in Lending Act protections to PACE loans.
“The biggest concerns that we see with the CFPB today is they are holding the hands of the payday lenders,” said Linda Jun, senior policy counsel at Americans for Financial Reform. “That means that the debt trap will continue and people will continue to lose their cars and their bank accounts as a result of the continued destruction of payday loans.”