The Consumer Bureau’s current structure works for consumers
The Consumer Bureau was created for one purpose and one purpose only: protecting consumers. In just over five years, the Consumer Financial Protection Bureau (CFPB) has returned or refunded nearly $12 billion to 29 million consumers harmed by illegal financial practices. The CFPB is the one agency whose sole job is to protect regular consumers like you and me. It must not be hijacked by political or corporate influence.
“Monumental court battle” over the CFPB
Right now, there is a “monumental court battle over whether the structure of the federal watchdog is unconstitutional.” Last fall, a three-judge panel of the D.C. Circuit, US Court of Appeals ruled on a lawsuit brought by PHH, a mortgage lender, that the agency should be restructured so the president can fire the director at will. This ruling was vacated when the full court granted the CFPB’s request to rehear the case “en banc,” or in front of all the judges on the Circuit.
Following the presidential transition, the Department of Justice reversed its previous support for the CFPB and filed a friend-of-the-court brief backing PHH’s claim that the CFPB’s structure is unconstitutional.
The DOJ argued in its new brief that the president should be able to remove the CFPB’s director at will and without just cause. That move would threaten the Consumer Bureau’s independence and leave the agency at the will of the agenda of both President Trump and a variety of special interests that want to roll back the CFPB’s ability to protect consumers.
We think the Department of Justice should instead support an independent Consumer Bureau — free from political interference and industry influence. CFPB Director Richard Cordray has been doing his job, bringing much needed transparency to industries that sorely lacked it, including credit cards, credit bureaus, debt collectors and student loan servicers, and cracking down on wrongdoing.
What it means that the DOJ opposes the CFPB
While the DOJ is not an official party in the case, their amicus, or friend of the court, brief demonstrates they are opposed to the CFPB and, according to the Washington Post, “signals that it may not defend the current structure of the agency if the battle reaches the Supreme Court, legal experts said.”
“It’s certainly not good for the CFPB,” said Michael Landis, litigation director for U.S. PIRG to the Washington Post. “The D.C. Circuit will put weight on the views of the Justice Department.”
The CFPB works for consumers
It’s no surprise that big banks, payday lenders and debt collectors want to weaken the CFPB’s ability to protect consumers by changing its structure. But with the administration and Department of Justice on its side, the financial industry could control the very agency meant to keep it in check.
