Unless you’ve been hiding under a rock (and really, with some of the news nowadays, we can’t blame you), you’ve likely heard a fair bit about the CFPB. Among other things, the CFPB, or Consumer Financial Protection Bureau, saw its director (Richard Cordray) resign, witnessed not one, but two people claim to be the new acting director, and now finds itself embroiled in a growing number of lawsuits. Earlier this week we reached out to two attorneys at Bradley, Jonathan Kolodziej and Jason Bushby, and interviewed them about the current CFPB situation, which you can read here. It has also been a popular topic amongst the bloggers on our network, so we’ve gathered together some of the best posts to help keep you informed.
Director Cordray Leaves: Dispute Erupts Over CFPB Leadership – By Eric Mogilnicki of Cov Financial Services: On Friday, November 24, Richard Cordray left the CFPB — but not before appointing his Chief of Staff, Leandra English, as Deputy Director of the Bureau. Under the Dodd-Frank Act, the Deputy Director “shall . . . serve as acting Director in the absence or unavailability of the Director.” Hours later, President Trump named Mick Mulvaney, current director of the Office of Management and Budget and a staunch CFPB critic, as Acting Director of the CFPB. The administration later released an Opinion of the Department of Justice’s Office of Legal Counsel (“OLC”) that seeks to harmonize the Dodd-Frank Act with the Vacancies Reform Act, which generally governs the President’s authority to make appointments to fill vacancies in federal agencies. View Full Post
CFPB Acting Director – The Controversy Escalates – By Andrew J. Pincus of Consumer Financial Services Review: The dispute over the CFPB acting director designation has moved into federal court. In yesterday’s post, we explained why the President’s designation of Mick Mulvaney as acting CFPB director complies with the law, and why Mr. Mulvaney—rather than CFPB deputy director Leandra English—qualifies as the lawful acting director. On the evening of November 26, Ms. English filed a lawsuit against President Trump and Mr. Mulvaney seeking a declaration that she is the lawful acting director. (Note that Ms. English is represented by private counsel, not by CFPB lawyers.) View Full Post
CFPB Removes Ban on Arbitration Agreements from CFR Following Congressional and Presidential Disapproval of Rule – By Robert S. Claiborne, Jr. and Stephen C. Piepgrass of Consumer Financial Services Law Monitor: As anticipated, the Consumer Financial Protection Bureau has officially removed from publication a rule that would have prohibited arbitration agreements in certain consumer contracts. The CFPB published its removal of 12 CFR part 1040, titled “Arbitration Agreements,” from the Code of Federal Regulations. The CFPB’s removal of part 1040 reflects Congressional disapproval of the underlying Arbitration Agreements rule of July 19, 2017. View Full Post
Next Steps for the CFPB – By Jonathan Engel and Robin Nunn of Payment Law Advisor: Richard Cordray, the director of the U.S. Consumer Financial Protection Bureau (CFPB), resigned from this post at the close of business last Friday, November 24. In a statement to staff, he said that Leandra English, the CFPB’s chief of staff, had been named deputy director and would take over as acting director of the agency upon his exit. On that Friday evening, President Donald Trump named White House Office of Management and Budget (OMB) Director Mick Mulvaney as the Acting Director of the CFPB. On Sunday, lawyers for Leandra English filed a lawsuit against the President and OMB Director Mulvaney in the U.S. District Court for the District of Columbia, seeking declaratory and temporary injunctive relief to allow Ms. English to serve as the Acting Director of the CFPB. In the complaint, English’s attorneys argue she is entitled to the position under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which states the deputy director becomes acting director when the agency’s top spot is vacant. View Full Post
CFPB Acting Director Institutes Suspension of Data Collection, Reveals Plans to Bring in More Political Appointees, and Announces Review of Pending Enforcement Matters – By Eitan Levisohn of Cov Financial Services: Acting CFPB Director Mick Mulvaney made three important announcements this week. First, on December 4, he announced a suspension of the agency’s collection of consumers’ personal information due to concerns about cybersecurity. Mulvaney, who said he is taking data security “very, very seriously” according to The Wall Street Journal report (paywall), explained that the Bureau should first hold itself accountable and ensure it has a rigorous data-security program before expecting the same from the financial services industry it oversees. In addition, Mulvaney revealed two of his immediate priorities for the Bureau under his leadership: hiring senior political appointees to work with the heads of the independent agency’s main divisions and reviewing more than 100 pending CFPB enforcement cases. View Full Post
Second lawsuit filed challenging Mulvaney’s appointment as CFPB Acting Director – By Alan S. Kaplinksy of Consumer Finance Monitor: Yesterday, the Lower East Side People’s Federal Credit Union filed a complaint in U.S. District Court for the Southern District of New York seeking a declaration that Mick Mulvaney’s appointment as CFPB Acting Director is unconstitutional and in violation of the Consumer Financial Protection Act (CFPA). The complaint also seeks a declaration that Leandra English has the legal right to serve as Acting Director. View Full Post
GAO Sounds Death Knell for the CFPB’s Key Statement of its “Disparate Impact” Theories in Indirect Auto Finance – By Alan D. Wingfield, Michael E. Lacy, and Brooke Conkle of Consumer Financial Services Law Monitor: On Tuesday, December 5, 2017, the Government Accountability Office (“GAO”) levelled a heavy blow on a major regulatory initiative of the Consumer Financial Protection Bureau (“CFPB”): its highly controversial “disparate impact” discrimination theories as applied to pricing in the indirect automobile financing industry. The specific GAO ruling finds that a 2013 “Bulletin” stating the CFPB’s interpretation of the Equal Credit Opportunity Act (“ECOA”) as applied to indirect automobile lending should have been issued as a rule and hence be subject to Congressional review. Under the ruling, the CFPB should have transmitted the Bulletin to Congress for evaluation, but failed to do so. View Full Post