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CFPB to be Abolished or Weakened


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http://www.huffingtonpost.com/entry/consumer-financial-protection-bureau-republicans_us_582d18a5e4b099512f80ee6b

 The CFPB has been recommended here many times and they have helped consumers, usually in the form of policy and rule implementation, but oftentimes directly when a complaint has been submitted.    Business interests have always hated what it does.  They don't want government interfering with their operations.    Now it looks as if they will soon get their way.   The FTC and the FCC never had the laws or resources to do much for consumers, and their powers too will be scaled back.    Big business will be in full control of the agenda now.  So much for the concern about the "average  worker."

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Money Magazine, The American Banker and the Chicago Tribune aren't leftwing and they say essentially the same thing about the CFPB that HP did:

Americans could lose this important consumer watchdog under ...

Chicago Tribune-Nov 14, 2016
Republican lawmakers and big names on Wall Street have been trying to weaken or abolish in the Consumer Financial Protection Bureau 
 

CFPB's Precarious Future Under Trump

American Banker-Nov 9, 2016
Still, Trump is unlikely to seek a complete elimination of the CFPB, ... "Anybody who says the CFPB will be abolished is overstating the case," ...

How Trump Could Make It Easier for Wall Street to Screw You

Money Magazine-Nov 10, 2016
“I think absolutely, Dodd-Frank has to be either eliminated or changed ... Bureau, the Republican Party's platform called forabolishing the agency ... More likely, the GOP would turn the CFPBinto an agency similar to the SE
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@debtzapper  Not looking good:

http://www.latimes.com/business/la-fi-cfpb-appeal-cordray-20161118-story.html
The Consumer Financial Protection Bureau on Friday appealed a recent court ruling that could allow President-elect Donald Trump, once he takes office in January, to replace the watchdog agency’s embattled director.

In a case brought against the CFPB by mortgage lender PHH, a federal appellate court in Washington, D.C., last month ruled that the bureau’s structure gives Director Richard Cordray too much power and that the president should be able to fire the bureau’s director for any reason.

For now, the director can only be fired for cause.

If the ruling stands, it could allow Trump — who has said he plans to overhaul or dismantle the Dodd-Frank Act, which created the CFPB — to fire Cordray soon after taking office. Cordray was appointed by President Obama, and his five-year term doesn’t end until mid-2018.

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It is my prediction that the CFPB will be abolished or Cordray will be replaced by someone so conservative as to make the name of the organization a joke.  And efforts to close the courthouse doors to consumers will be redoubled.  First target appears to be two statutes near and dear to our hearts:  statutory damages under the FDCPA and FCRA. 

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Unfortunately I think the CFPB 's days are numbered. At the very least it'll be very much weakened. Cordray had to be appointed via recess appointment just to get by Republican opposition, and  in the meantime they haven't made it a secret that they'd like to dismantle it. I don't see Trump standing in their way once he's in office.

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Let's not get caught up in party poltics, i.e., democrat vs. republican.   The main argument is based upon the structure of the CFPB. 

I read parts of PHH Corporation, ET AL. v. Consumer Financial Protection Bureau (D.C. Circuit, Oct. 2016) when it was first issued in October.  The federal court (D.C. Circuit) ruled that a single administrator of an independent government agency is unconstitutional.

For instance, the FCC, SEC, FTC, and FERC are headed by five commissioners.  The EPA is headed by an administrator, deputy administrator, and 3 assistant administrators.  The NLRB and NTSB are headed by 5 members.  However, the CFPB is headed by one person.  Here are some excerpts of the ruling starting on page 4.

https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf

"In 1935, however, the Supreme Court carved out an exception to Myers and Article II by permitting Congress to create independent agencies that exercise executive power.  See Humphrey's Executor v. United States, 295 U.S. 602 (1935)."  

"The independent agencies collectively constitute, in effect, a headless fourth branch of the U.S. Government.  They exercise enormous power over the economic and social life of the United States."

"To help mitigate the risk to individual liberty, the independent agencies, although not checked by the President, have historically been headed by multiple commissioners, directors, or board members who act as checks on one another.   Each independent agency has traditionally been established, in the Supreme Court's words, as a 'body of experts appointed by law and informed by experience."  Humphrey's Executor, 295 U.S. at 624 (internal quotation marks omitted).  The multi-member structure reduces the risk of arbitrary decisionmaking and abuse of power, and thereby helps protect individual liberty.

In other words, to help preserve individual liberty under Article II, the heads of executive agencies are accountable to and checked by the President, and the heads of independent agencies, although not accountable to or checked by the President, are at least accountable to and checked by their fellow commissioners or board members.  No head of an executive agency or an independent agency operates unilaterally without any check on his or her authority.  Therefore, no independent agency exercising substantial executive authority has ever been headed by a single person."

The CFPB has petitioned for a rehearing.  

I understand the problem with one person who exercises authority.   Our government is based upon 3 branches of authority.   It's based upon checks and balances. 

Disclaimer:  The decisions I make in my home are final.  Well, hubby can offer an opinion. :)

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RESPONDENT CONSUMER FINANCIAL PROTECTION BUREAU’S  PETITION FOR REHEARING EN BANC 

https://consumermediallc.files.wordpress.com/2016/11/cfpb.pdf

"The panel held that the structure of the Consumer Financial Protection Bureau is unconstitutional because it is headed by a single director who may be removed by the President only for cause. Panel Opinion (Op.) at 10; see 12 U.S.C. 5491(c)(3). This decision conflicts with Humphrey’s Executor v. United States, 295 U.S. 602 (1935), which has long been understood to “bless[] Congress’s creation of the so-called ‘independent’ agencies where at least one individual is appointed by the President to a full-time, fixed-term position with the advice and consent of the Senate and has protection against summary removal by some form of ‘for cause’ restriction on the President’s authority.” Free Enter. Fund v. Public Co. Accounting Oversight Bd., 537 F.3d 667, 695 (D.C. Cir. 2008) (Kavanaugh, J., dissenting, internal quotation marks omitted), rev’d 561 U.S. 477 (2010). In addition, the decision conflicts with Morrison v. Olson, where the Court stated that USCA Case #15-1177 Document #1646917 Filed: 11/18/2016 Page 2 of 132 2 “we cannot say that the imposition of a ‘good cause’ standard for removal itself unduly trammels on executive authority.” 487 U.S. at 691.

This decision also presents an issue of exceptional importance because it unduly limits Congress’s flexibility to respond to “the various crises of human affairs,” McCulloch v. Maryland, 17 U.S. 316, 415 (1819), by creating independent administrative agencies headed by a single director. And it may affect not only the Bureau but also other agencies headed by a single director removable only for cause (Social Security Administration, 42 U.S.C. 902(a); Federal Housing Finance Agency, 12 U.S.C. 4512(b)(2); Office of Special Counsel, 5 U.S.C. 1211(b)).

In addition, the panel’s decision misinterpreted the Real Estate Settlement Procedures Act (RESPA) in a manner that so fundamentally defeats the statutory purpose as to warrant rehearing en banc. . . ."

 

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@debtzapper, @calawyer @BV80 @Harry Seaward @RyanEX

Update--Amicus brief filed yesterday by 10 consumer groups:

http://guptawessler.com/wp-content/uploads/2012/05/PHH-DC-Cir-amicus-final.pdf

BRIEF OF AMERICANS FOR FINANCIAL REFORM, CALIFORNIA REINVESTMENT
COALITION, THE CENTER FOR RESPONSIBLE LENDING, CONSUMER
FEDERATION OF AMERICA, THE LEADERSHIP CONFERENCE ON CIVIL AND
HUMAN RIGHTS, THE NATIONAL COMMUNITY REINVESTMENT COALITION,
THE NATIONAL CONSUMER LAW CENTER, THE NATIONAL COUNCIL OF LA
RAZA, UNITED STATES PUBLIC INTEREST RESEARCH GROUP EDUCATION
FUND, INC., AND WOODSTOCK INSTITUTE AS AMICI CURIAE IN SUPPORT OF
REHEARING EN BANC

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Good find, BK.  Before there was the CFPB,  the only govt agency that a consumer with a financial complaint could go to was their state banking dept or, nationally, to the Fed Reserve or the Comptroller of the Currency.  But these agencies were primarily designed to oversee the stability of the financial system, not to look after the financial interest of consumers or go after wrongdoers.

Besides the judicial challenges it must overcome,  it still faces a hostile Congress and president-elect.

 

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