In the 10 years since the Consumer Financial Protection Bureau (CFPB) opened its doors on July 21, 2011, the agency has in many ways upheld its mandate of looking out for the public interest. Created by the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act one year earlier, the CFPB is tasked with protecting consumers from unfair, deceptive, or abusive practices, as well as arming the public with the information, steps, and tools that consumers need to make smart financial decisions. The agency has made ample use of its enforcement authority; in a blog post celebrating the agency’s 10-year anniversary, acting director Dave Uejio noted that the CFPB had recovered approximately $14.4 billion in relief for consumers and imposed $1.7 billion in civil penalties to date.[1] In addition, the agency continues its mission to educate the public by issuing regular reports and resources on topics, such as consumer credit, auto loans, debt collection, and potential scams and frauds.
Senator Elizabeth Warren, however, thinks there is plenty more ground to cover. In remarks at a recent event cohosted by various leading consumer advocacy groups, Warren highlighted several areas that may garner additional attention from the CFPB in the near future, especially if the Senate confirms Rohit Chopra, President Biden’s nominee for director. In particular, Warren mentioned bank overdraft fees, predatory auto lending, and cryptocurrency as practices ripe for CFPB enforcement.
Cryptocurrency in particular remains a largely unregulated market, although both federal and state regulators are taking increasing interest. The Federal Trade Commission recently reported that it had received over 7,000 complaints in the last 10 months from consumers claiming to have lost over $80 million in cryptocurrency investment scams.[2] And earlier this month, Warren wrote a letter to Securities and Exchange Commission Chairman Gary Gensler requesting information about the agency’s authority to properly regulate cryptocurrency exchanges, noting that the existing regulatory gaps leave investors and consumers vulnerable to scams and other fraudulent behavior.[3]
To the extent the CFPB delves into consumer protection in this arena, it will likely have to coordinate with these other federal agencies. In addition, the CFPB will continue to focus on providing relief for consumers facing economic hardships following the COVID-19 pandemic, while also addressing ongoing racial injustices in the area of lending, two priorities highlighted by Uejio in a post earlier this summer.[4]
As the CFPB revisits these and other enforcement priorities, any entity subject to CFPB enforcement should keep a close watch on the agency’s current enforcement actions and consent orders, as well as any research reports issued by the agency, to identify any particular areas of interest. Moreover, entities should be prepared to respond quickly and comprehensively to civil investigative demands and be able to demonstrate a strong system of compliance policies and procedures should the agency issue a demand. With the agency poised to flex its enforcement muscle under Chopra, the next 10 years will likely bring even more prominence to this relatively young agency than its first decade in existence.
[1] See https://www.consumerfinance.gov/about-us/blog/celebrating-10-years-consumer-protection/.
[2] See https://www.ftc.gov/news-events/press-releases/2021/05/ftc-data-shows-huge-spike-cryptocurrency-investment-scams.
[3] See https://www.warren.senate.gov/imo/media/doc/Draft%20SEC%20Crypto%20Exchange%20Letter%2007.7.2021%20clean.pdf.
[4] See https://www.consumerfinance.gov/about-us/blog/addressing-racial-inequities-consumer-finance-markets/.