Recently, the Supreme Court reversed a decision by a federal appeals court in Louisiana, rejecting a challenge concerning the constitutionality of the funding structure of the Consumer Financial Protection Bureau (CFPB). The case originated from a challenge by industry groups to a “payday lending” rule issued by the CFPB in 2017. By approving the CFPB’s funding from the Federal Reserve, rather than through the congressional appropriations process, the ruling protects the agency from future funding threats.
Reinvigorated by the Supreme Court’s decision, the independent agency, which is responsible for enforcing consumer finance laws, has shown signs that it intends to move forward with all activities—rulemaking, investigation, and enforcement—at full speed. Agree or disagree with their role and existence, the CFPB is here to stay and credit union leaders should make sure they are in full compliance.
In a recent interview with NPR, CFPB director Rohit Chopra provided some insight into the agency’s mission, approach to consumer protection and fraud investigation. Born out of the Great Recession, the CFPB receives over 200,000 consumer complaints each month and works to address financial scams and fraud. In fact, the agency plans to issue a delayed auto lending report, outlining the results of its inquiry into the portfolios of nine auto lenders. While the specific details regarding the content of the report are not yet available, anticipated topics will include affordability, practices in loan servicing and collections, as well as competition among subprime lenders.
