Consumer Law & Policy Blog

Trump Tweets on the Financial Choice Act

by Jeff Sovern

Here's his tweet:  

Donald J. Trump

 

✔ @realDonaldTrump

Congratulations to Jeb Hensarling & Republicans on successful House vote to repeal major parts of the 2010 Dodd-Frank financial law. GROWTH!

 

CFPB Alters Plan for Debt Collection Regs

by Jeff Sovern

Last summer, the CFPB issued a document indicating its tentative plan for third-party debt collector regulation, and saying that it was going to move forward on first-party debt collectors separately. Today, CFPB Director Richard Cordray gave a speech saying that in light of feedback the Bureau had received, it has:

now decided to consolidate all the issues of “right consumer, right amount” into the separate rule we will be developing for first-party creditors, which will now cover these intertwined issues for third-party collectors and debt buyers as well. That way, we can address this entire set of considerations, market-wide.

In the meantime, we will be able to move forward more quickly with a proposed rule focused on the remaining issues. These issues, again, are information third-party collectors must disclose to people about the debt collection process and their rights as consumers, and ensuring that third-party collectors treat people with the dignity and respect they deserve. Once we proceed with a proposed rule on these issues, we will return to the subject of collecting the right amount from the right consumer, which is a key objective regardless of who is collecting the debt. * * *

House Financial Services Committee Democrats Reply to Staff Report About Cordray

Yesterday, Allison wrote about the House Financial Services Committee staff report threatening CFPB Director Richard Cordray with contempt charges.  Democrats on the Committee replied here.  Excerpt:

Debunking Republicans’ Alternative Facts:

• Fiction: “Wells Fargo has cooperated in full with the Committee’s investigation to date.” 
• Fact: Wells Fargo has not responded to Democrats’ multiple requests to provide Democratic staff the same meetings with Wells Fargo executives that it provided to Republican staff.
  * * *
• Fiction: The report faults the Consumer Bureau for not including “internal CFPB records…such as internal emails or memoranda relating to its investigation.” 
• Fact: Committee Republicans fail to note that their September 16, 2016 document request did not ask for internal records nor communications. This report is the first time that Committee Republicans have stated that they are seeking these internal Consumer Bureau records.
  
  
• Fiction: “…the Committee asked the Director to brief the Committee about the CFPB’s investigation. … Director Cordray replied that he would not brief the Committee.” 
• Fact: Director Cordray has repeatedly made himself and Consumer Bureau staff available to speak with, brief, and offer hearing testimony to the Committee. In addition, Committee Republicans rejected Director Cordray’s offer to testify at the Committee’s Wells Fargo hearing. 
  
  
• Fiction: Majority Committee staff “…conclude[s] that Director Cordray is in default of the Committee’s Subpoena.” 
• Fact: The Consumer Bureau provided over 57,000 pages of documents in response to the subpoena. Additionally, the Consumer Bureau has repeatedly requested additional guidance from the Committee to ensure that the Committee has received all records that it requested. 

House Passes Bill to Rescue Banks at Expense of Consumers

by Jeff Sovern

The House passed the Financial Choice Act, H.R. 10, which would cripple the CFPB. According to Law360's Evan Weinberger, the vote was 233-186, and as expected followed party lines.

Kathleen Engel Op-Ed: Your consumer protections, on the brink of destruction in Congress

Here.  The whole piece is worth a read, but here's an excerpt:

The bill would take away the CFPB’s ability to inspect banks, mortgage brokers, foreclosure relief firms, student and payday lenders, debt collectors, credit reporting agencies and auto financing companies to ensure they accurately disclose credit terms to borrowers and that they comply with laws that protect consumers from fraud and other wrongdoing.

It would transfer oversight of national banks to the Office of the Comptroller of the Currency, which 10 years ago was (supposedly) minding the hen house when lenders were luring home mortgage borrowers into unaffordable loans with deceptive terms.

Instead of restricting unlawful loans, the OCC and other bank regulators turned a blind eye to the disastrous rise in deceptive and unaffordable home loans that ultimately led to the financial crisis.

House Expected to Vote on Financial Choice Act, Bill to Cripple CFPB, by Friday

The House Rules Committee voted to permit House consideration last night. The Hill story is here.  Excerpt:

The House Rules Committee on Tuesday night cleared for a vote on the House floor a Republican effort to strip much of the Dodd-Frank Act.

The powerful panel -- the last stop for every bill considered by the House -- cleared the Financial CHOICE Act 9-4 along party lines and with few amendments. The full House is scheduled to vote on the bill by Friday morning, and it is expected to pass it without Democratic support.

Jeanette Quick: Washington's quiet revolution to destroy consumer protection

Here, in The Hill.  Quick served as senior counsel to the Senate Banking Committee and senior attorney for OCC.  Excerpt:

Trump is well on his way to effecting change in financial regulation through his appointments, and Congress appears poised to stall new financial regulation through changes to the rulemaking process, most significantly through the Regulatory Accountability Act (RAA).

 Many proposals to “reform” the rulemaking procedures are designed to hinder regulation, just as many agency heads are selected to prevent their agencies from regulating. As Steve Bannon has stated, “Cabinet appointees ... were selected for a reason and that is the deconstruction [of the administrative state] ... the way the progressive left runs, is if they can't get it passed, they're just gonna put in some sort of regulation ... in an agency ... that’s why this regulatory thing is so important.”

 

More on the Financial Choice Act Vote Next Week

On Tuesday at 5:00 pm, the House Rules Committee will hold a hearing on the Financial Choice Act, presumably to grant a rule for full House consideration later in the week. The Committee Report accompanying the bill is linked to here.

Bloomberg's Perry Cooper's Thorough Report on the Status of Various Arbitration Rules

Here.  Excerpt on the CFPB's proposed arbitration reg:

[Ballard Spahr's] Alan S. Kaplinsky told Bloomberg BNA that “it would be bordering on reckless” for CFPB Director Richard Cordray to finalize the rule because of the risk it will be overturned under the [Congressional Review Act].* * *

Congressional Republicans will be in lock step against it, he predicted. “The forces behind an override will be very very strong.”

But consumer advocate [Public Justic's] F. Paul Bland * * * called fears about CRA reversal “a recipe for paralysis.” “You miss all the shots you don’t take,” he said.

He pointed to the Wells Fargo fake account scandal, which snowballed to affect two million customers because mandatory arbitration shut down two early suits. Negative attention on Wells Fargo makes reversing the CFPB a “very hard vote for a lot of Republicans” in Congress, he told Bloomberg BNA.

* * *

[Rutgers Professor David] Noll suggested that Cordray is taking Congress’s temperature and might be waiting to release the rule until congressional support for the administration splinters further

AFR: Sham Poll Tells Lobbyists What They Want to Hear

The Consumer Bankers Association has been touting a poll it commissioned from Morning Consult finding, as the CBA headline put it: Most Votes in Key Battleground States Support Structural Reforms to CFPB. Or, to put it another way, most voters when asked if they prefer a single director or a bipartisan commission, prefer the bipartisan commission.  But here's some of what Americans for Financial Reform has to say about it:

“This poll is a quintessential example of a survey that has been designed to produce a specific result — one that is at odds with everything else we know about public opinion on consumer protection and Wall Street reform,” according to Celinda Lake and Daniel Gotoff of Lake Research Partners.

Here’s something it proves beyond any doubt: if you write a poll question artfully, you’ll get the answer you’re after. Put the label “bipartisan” on just about anything, for example, and people will say they’re for it.

For more, go here.