The Consumer Finance Protection Bureau (CFPB) was established in response to the 2008 financial crisis to improve consumer financial protection practices. Some of the emphasis of the Bureau over the last five years has been to combat the bad practices of payday lenders, credit card companies, and debt collectors, to name a few. One of the most notable victories of recent has been the investigation of Wells Fargo Bank and its practice of opening fraudulent accounts without the knowledge of its customers.
But the Bureau is not without opposition from both Wall Street and some of it’s allies in Congress. There is a case: PHH Mortgage Corp. vs. CFPB which is an attempt to undermine the Bureau. The decision at first instance would give the president the discretionary power to remove the Bureau’s director. With the expected move of the incoming administration towards financial deregulation, there is concern that the first instance decision will be the impetus for the removal of the current director Richard Cordray. Hopefully the decision which is under review by the D.C. Circuit Court of Appeals will reverse the panel court’s decision.
But that hasn’t stopped those who seek to undermine the Bureau to make an attempt under the current law to have Cordray removed “for inefficiency, neglect of duty, or malfeasance in office.” This is in the face of the panel court’s finding of “a man of substantial accomplishment and of longstanding and dedicated devotion to public service and the public good.”
And the result down the road for consumers if both the CFPB and it’s director are successfully undermined? Probably a return to the days of an under-regulated industry and predatory practices!