Nominee to lead agency says the bureau offends fairness
By Charlene Crowell
Consumers will endure an extended waiting period to learn whether the Consumer Financial Protection Bureau (CFPB) will remain the nation’s financial cop-on-the-beat. The agency’s 1,700-member workforce does not know if they still have jobs. And battle lines are as clear as they are deep – for and against – the embattled agency.
Partisan calls to shuttering the agency appear determined remove essential oversight that protects consumers from financial fraud, reduces junk fees and holds lenders and financial companies accountable for their illegal conduct. Moreover, 38 enforcement action lawsuits filed before the current Administration took office have been either dropped or frozen from final resolution.
While these efforts play out, DC federal circuit judge Amy Brennan Jackson has ordered CFPB leaders to appear in court on March 10 to determine if the agency is following her order to continue its work.
On February 27, CFPB announced that two cases that would have returned $52 billion to consumers were dropped:
- $50 billion that the Pennsylvania Higher Education Assistance Agency would have paid to 2.6 million student loan borrowers for illegal collections on student loans discharged in bankruptcies; and
- More than $2 billion in interest payments owed to Capital One savings accounts’ holders for allegedly and unlawfully misleading consumers about another savings program, its 360 Savings, that would have paid higher-interest rates.
Also on that same day, Jonathan McKernan, nominated to be the next CFPB Director, declared his intent to neuter the agency. In his confirmation hearing before the Senate Banking Committee, McKernan said:
“All too often, however, the CFPB has gotten in the way of its own mission,” testified McKernan. “It has acted in a politicized manner. It has pushed beyond the limits of its statutory authority. It has seized opportunities to expand its jurisdiction and power. It has offended our basic notions of fairness and due process when it has regulated by enforcement…[I]t’s clear that the CFPB suffers from a crisis of legitimacy.”
Indeed, CFPB is in crisis; but it is one created by a multi-faceted, systemic assault to return to the days when regulation was scant – if at all present – and consumers felt powerless to seek financial fairness from billion-dollar corporations that deceptively stripped people of their hard-earned monies.
And lest we forget, the CFPB was created in the aftermath of a financial crisis that led to millions of foreclosures and a disproportionate loss of wealth to Black and Latino people. As an independent agency whose sole mission is to protect consumers, the agency’s funding comes directly from the Federal Reserve, thereby removing it from the annual and often politicized federal budget process.
In truth, the same interests that fought CFPB’s creation have consistently resisted its operations and have now found a willing executive branch to do the private sector’s – not the people’s – bidding.
In 2025, it will require a sustained vigilant throng to overcome the systemic dismantling of CFPB. And there are encouraging developments for consumers that include more than 200 Members of Congress, a coalition of 23 state attorneys general, and consumer advocates calling for actions to overcome the anti-consumer surge.
“The only reason to get rid of this watchdog agency is to protect bad actors,” said New York Attorney General Letitia James, a member of the AG coalition. “Working families need the CFPB, especially as rising prices are making it hard to make ends meet and put food on the table.”
“Eliminating the only federal agency with oversight over big banks puts everyday consumers at higher risk for financial losses, and places higher demands on states like California,” said its Attorney General Rob Bonta. “From bank overdraft fees and credit card late fees to medical debt on credit reports, the CFPB has actively worked to make the lives of everyday people better — its loss will have devastating and deep implications for California, and the financial well-being of households across the nation.”
Sen. Warren, often credited for CFPB’s creation, summarized the current financial crossroad best:
“The CFPB has been sidelined, but it is not dead. First, the actions by the Trump Administration to shut down the CFPB are plainly illegal,” said Warren. “Congress passed the legislation that created the CFPB. Congress, and only Congress, can shut it down. Advocates are in court right now asking judges to enforce the law, and I’m confident they are going to win.”
