CFPB

Banks Line Up To Challenge CFPB

Things are getting tougher for the Consumer Financial Protection Bureau (CFPB) under the new political administration. More banks are now willing to challenge CFPB enforcement actions, said The Wall Street Journal.

The CFPB has reportedly announced some 21 enforcement actions in 2017, one-third of which have been challenged, the organization reportedly said. This already exceeds the total number of challenges the CFPB saw across 2016.

The current political administration is in the process of scrutinizing the organization and working to scale back or entirely eliminate the effects of Dodd-Frank. The fate of the CFPB structure is slated to be decided on by the Washington full appellate court this month.

The controversial U.S. government agency, authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 under the Obama administration, and its director Richard Cordray have been criticized for overextending their authority.

“We are seeing more resistance to CFPB actions,” Joseph Rubin, a senior counsel at Arnall Golden Gregory who advises clients on regulatory matters, told WSJ. “We anticipate that as it gets closer to the end of Cordray’s term, the CFPB may find it more difficult to obtain quick consent orders from financial institutions.”

Cordray’s term reportedly ends in July of 2018.

Despite the multiple moves against it, the CFPB doesn’t look to change the way it works while it can help it.

“We remain focused on carrying out our mission, and we will take action where necessary to enforce the law and achieve relief for harmed consumers,” Samuel Gilford, a CFPB spokesman, was quoted as saying.

One CFPB challenger is Navient, the largest servicer of federal and private student loans in the United States.

In a suit filed in January, the CFPB alleged that Navient, formerly part of Sallie Mae, and two subsidiaries provided bad information, processed payments incorrectly and failed to act when borrowers issued complaints — systematically and illegally failing borrowers.

Additionally, the CFPB alleges that Navient cheated borrowers out of options to lower repayments, which the Bureau claims caused borrowers to pay more than they had to for their loans.

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