Administration Fundraiser With Payday Lenders a Reminder Why the CFPB Needs to Free of Political Influence
WASHINGTON, D.C. – CFPB Director Kathy Kraninger may not care enough to defend the constitutionality of her own job, consistent with her refusal to do the job. But fortunately for consumers, leaders like Speaker Nancy Pelosi and HFSC Chairwoman Maxine Waters are willing to go to the mat for a strong, independent bureau. Allowing any President – particularly one as politically motivated and self-interested as Donald Trump – to fire the CFPB Director without any cause would gravely imperil the bureau’s ability to put consumers first, as it was set up to do by Congress. Consumer watchdog Allied Progress praised Leader Pelosi and Chairwoman Waters’ amicus brief in support of the CFPB’s independence and pointed to Vice President Mike Pence’s big-dollar fundraiser with payday lenders just yesterday as a perfect example of why it is needed.
“Vice President Pence was toasted by wealthy predatory lending executives at the same time the Trump CFPB is deciding whether to permanently scrap consumer protections against the payday debt trap,” said Jeremy Funk, spokesman for Allied Progress. “Director Kraninger may be in the tank for Trump and his payday friends, but imagine a future CFPB Director who was actually willing to stand up for consumers. It’s easy to imagine Trump or another President reacting to complaints from their donor friends by impulsively firing the Director and replacing them with an industry puppet. That is the kind of scenario Congress was ensuring against by establishing a strong, independent bureau.”
WHAT YOU NEED TO KNOW:
After Kathy Kraninger’s Announcement That The CFPB Would No Longer Defend The Constitutionality Of Its Independent Director Structure, The House Of Representatives Has Filed An Amicus Brief With The Supreme Court In Support Of The Bureau’s Independence.
Following CFPB Director Kathy Kraninger’s Announcement That The CFPB Would No Longer Defend The Constitutionality Of Its Independent Director Structure, The House Of Representatives Filed An Amicus Brief With The Supreme Court Outlining The CFPB’s Independence.
Following CFPB Director Kraninger’s Announcement that “The Agency Would No Longer Defend The Constitutionality Of The CFPB Director’s For-Cause Removal Provision,” Speaker Pelosi And Chairwoman Waters Announced “A Filing By The U.S. House Of Representatives With The Supreme Court In Support Of The Independence Of The Consumer Financial Protection Bureau.” “Speaker Nancy Pelosi and Financial Services Committee Chairwoman Maxine Waters announced a filing by the U.S. House of Representatives with the Supreme Court in support of the independence of the Consumer Financial Protection Bureau (Consumer Bureau or CFPB). The House’s motion in the Seila Law v. CFPB case to file an amicus brief follows a recent announcement by CFPB Director Kathy Kraninger that the agency would no longer defend the constitutionality of the CFPB Director’s for-cause removal provision.” [Press Release, Office of the Speaker of the House of Representatives, 10/07/19]
The House Argued That The CFPB’s Independence Is Essential In Its Ability To Effectively Regulate And That Congress Intended The Bureau To Be An Independent “Cop On The Beat” When It Created The Agency.
Lawmakers Noted That “The For-Cause Removal Protection” For The CFPB Director Provides “A Degree Of Independence To The Agency.”
The Lawmakers Noted That “The For-Cause Removal Protection For The Director” Of The CFPB “Is Designed To Provide A Degree Of Independence To The Agency.” “The Trump Justice Department also urged the Supreme Court to consider the case in order to strike down the for-cause removal protection for the Director of this independent regulatory agency. The CFPB’s for-cause removal provision is designed to provide a degree of independence to the agency and to prevent the President from removing the CFPB Director at will.” [Press Release, Office of the Speaker of the House of Representatives, 10/07/19]
Speaker Pelosi Commented That Congress Intended The CFPB To Be “An Independent Cop On The Beat.”
Pelosi Commented That “Congress Established An Independent Cop On The Beat” To Protect Consumers. “‘As part of comprehensive Wall Street reform, Congress established an independent cop on the beat to protect seniors, servicemembers, veterans, college students, and all consumers in America against the abusive and predatory financial marketplace practices that led up to the Great Recession,’ said Speaker Pelosi.” [Press Release, Office of the Speaker of the House of Representatives, 10/07/19]
Pelosi Also Called Out The Trump Administration For Putting “Special Interests” Above Consumer Protection In No Longer Defending The CFPB’s Independence.
Pelosi Called Out The Trump Administration For Prioritizing “Special Interests” Over Consumers “By Not Defending The Consumer Bureau’s Independence,” Which Was Established To “‘Curb Fraud And Promote Transparency.’” “‘By not defending the Consumer Bureau’s independence, the Trump Administration is choosing special interests over America’s consumers. As the lower courts have recognized in upholding the constitutionality of the for-cause provision, ‘Congress established the independent CFPB to curb fraud and promote transparency in consumer loans, home mortgages, personal credit cards, and retail banking.’” [Press Release, Office of the Speaker of the House of Representatives, 10/07/19]
Chairwoman Waters Noted That The CFPB’s Independence Is “‘Essential’” In Ensuring The Bureau Can Act As A “‘Tough Regulator That Stands Up For Consumers.’”
Chairwoman Waters Noted That The CFPB’s Independence Is “‘Essential To Ensuring That The Agency Can Operate As A Tough Regulator That Stands Up For Consumers.’” “‘The independence of the Consumer Bureau is essential to ensuring that the agency can operate as a tough regulator that stands up for consumers,’ said Chairwoman Waters.” [Press Release, Office of the Speaker of the House of Representatives, 10/07/19]
Meanwhile, Corporations Have Begun Citing Kraninger’s Decision To Stop Defending The CFPB’s Constitutionality As Reason For Enforcement Actions To Be Dropped Because – They Claim – Without Constitutional Authority The Director’s Actions Are Void.
Companies Are “Challenging Existing CFPB Lawsuits” On That Basis That “Because The CFPB Has Declared Itself Unconstitutional It Has No Authority” To Bring Enforcement Actions.
Companies Are “Challenging Existing CFPB Lawsuits” On That Basis That “Because The CFPB Has Declared Itself Unconstitutional It Has No Authority” To Bring Enforcement Actions. “Companies have already begun challenging existing CFPB lawsuits, arguing that because the CFPB has declared itself unconstitutional it has no authority to bring any actions.” [Evan Weinberger, “CFPB May Not Get Supreme Court Closure It Wants,” Bloomberg Law, 10/04/19]
Ocwen Financial Corp. Claimed, “The Bureau’s Reconsideration Of Its Constitutionality” Means Enforcement Against Them Should Be Dropped As Only The Director Has Authority For The Action But “‘When A Federal Officer Is Without Constitutional Authority To Act, Her Actions Are Void.’”
Ocwen Financial Corp. Noted In A Motion, “The Bureau’s Reconsideration Of Its Constitutionality Means The Enforcement Case Needs To Be Stopped” Because “‘Only The Director Can Authorize” Such An Enforcement Action And “When A Federal Officer Is Without Constitutional Authority To Act, Her Actions Are Void.’” “One such instance came on Oct. 3 in litigation the CFPB launched in April 2017 against mortgage servicer Ocwen Financial Corp. The company said in a motion that the bureau’s reconsideration of its constitutionality means the enforcement case needs to be stopped. ‘Only the director can authorize the commencement of an enforcement action in federal court like this one. And the case law is settled that when a federal officer is without constitutional authority to act, her actions are void,’ Ocwen said.” [Evan Weinberger, “CFPB May Not Get Supreme Court Closure It Wants,” Bloomberg Law, 10/04/19]