NEW YORK – The nation’s consumer watchdog is indicating a more aggressive approach towards the financial services sectors after a few years of being on a tight lease.
Under President Biden, the Consumer Financial Security Bureau has withdrawn or withdrawn several policies imposed by the Trump administration. And the bureau is working in anticipation of taking a more active role in regulation and enforcement, as it did during the Obama administration.
All this is being done without the CFPB being a permanent director, because the authority of the bureau comes from the director, who is accountable to the president. Dave Uijio, a long-time career employee of the bureau, has been the bureau’s acting director since Trump’s assistant Kathy Kringer resigned the day Biden was sworn in.
Despite handling the position of a carer or placeholder, Uejio has remained quite active in the role.
In April, the bureau broadened the scope for abusive behavior by consumers of financial services or products. Under Kringer, the bureau adopted a narrow definition, which, among other things, made monetary penalties less likely. Experts said the change would result in more enforcement actions and large fines against the financial services industry.
Created in 2011, the CFPB was considered a non-advocate for consumers and borrowers after the Great Recession; Instead, the bureau has often been caught in the midst of an ideological war between Democrats and Republican views on how to run the government.
Under the Trump administration, enforcement actions and fines were largely dropped when the bureau was controlled by Richard Cordray, with President Obama appointing the bureau that left in November 2017. The bureau’s own data collects about $ 650 million in fines or penalties. Under the Obama administration, Trump’s appointment is controlled annually, compared to an average of $ 1.84 billion annually.
“He is off to a promising start, setting the tone and direction for the CFPB that we will adopt as permanent director,” said Odette Williamson, a lawyer with the National Consumer Law Center.
The bureau has also pursued its mission in ways not seen before.
Using its authority to go after debt collectors, the CFPB last month moved tenants to rear rent due to eviction. The Center for Disease Control implemented an eviction moratorium last year, but the CDC had no statutory authority to enforce its own rule. Therefore, the bureau used its authority to compel any agents acting on behalf of the landlords, usually law firms hired to hire, to give tenants their rights under the CDC rule Struggling tenants for and to ensure aided.
The CFPB did not previously have any authority over renters or rent collection, and the change was welcomed by poverty and consumer advocates.
The banking industry is critical to the bureau’s more aggressive posture, partly because changes are taking place under a temporary director.
“At the very least, if he is going to make these changes and is in this role for an expanded role, he should come before Congress,” said Richard Hunt, president and chief executive of the Consumer Bankers Association. A trade group for large retail banks.
A spokesman for the CFPB said that Yugio’s actions “reflected the urgency of our nation facing crises,” which are slowly moving forward, “that it will hurt American families.”
Rohit Chopra, Biden’s choice for CFTB director, himself has indicated a more aggressive approach to the bureau’s mission. Chopra is a former bureau employee and is currently a commissioner in the Federal Trade Commission. The White House reportedly did not want him to step into the CFPB until a replacement was found for him in the FTC.
Another familiar face will also return in a new role. On Tuesday, the White House announced that it would be Cordray, the first director of the bureau under the Obama administration, to be in charge of the Federal Office of Student Loans. The amount of student loan debt owed by Americans has increased to $ 1.7 trillion.
While Corday will be working under the Department of Education, his position is likely to restore working relations between the bureau and the DOE. Trump’s Secretary of Education Betsy DeVos had effectively cut off the CFPB from any right to student loans.
Seth Frotman of the Student Borrowers Protection Center and former top official said, “It is a great step to lead Cordray’s appointment (office), showing that the administration is serious about saving borrowers and tackling the student loan crisis.” CFPB on student loan issues.