Regulation

Consumer Groups, Legal Scholars, Lawmakers Show Support For CFPB

A group of consumer and civil rights groups, legal scholars and members of congress announced Friday they would be submitting amicus briefs to the U.S. Court of Appeals in support of the Consumer Financial Protection Bureau (CFPB) in the case of PHH Corp. v. CFPB.

In a press release announcing the action, the group said the amici urges the D.C. Circuit Court of Appeals to maintain the CFPB in order to protect consumers in the U.S. The group says the structure of the CFPB is legal and that there is a need to maintain an independent agency to fight corporate corruption. The pointed to the fact the CFPB recovered $12 billion from financial companies that hurt American consumers.

“The Consumer Financial Protection Bureau works, and that’s why Wall Street banks and predatory lenders have drawn a target on it,” said Lisa Donner, executive director of Americans for Financial Reform in the filing. “Weakening the CFPB means weakening an agency that recovered $12 billion for 29 million Americans. We will fight back at every step.”

The CFPB has come under attack by Republicans who argued it has too much power and is hampering business growth and innovation. In October, a pair of twin bills introduced in the House and Senate — by Sen. Ted Cruz and Rep. John Ratcliffe (both from Texas) — would abolish the CFPB entirely by repealing Title X of the Dodd-Frank Wall Street Reform Act, which established the CFPB. The move is justified, according to Cruz and Ratcliffe, since the CFPB does the exact opposite of what it was created to do.

“Don’t let the name fool you — the Consumer Financial Protection Bureau does little to protect consumers. During the Obama administration, the CFPB grew in power and magnitude without any accountability to Congress and the people, and I am encouraged by the actions President Trump has begun to take to roll back the harmful impacts of an out-of-control bureaucracy,” Cruz said.

In May, the CFPB will be in court over the Justice Department’s contention the agency’s structure is unconstitutional. In the lawsuit, it’s stated that the current structure of the consumer watchdog agency provides it with too much power, CNBC reported. The Justice Department argued the director of the CFPB should be able to be removed at will by the President. However, the Dodd-Frank Act states the head of the CFPB can only be removed in cases of “inefficiency, neglect of duty or malfeasance in office.” The agency and its director, Richard Cordray, have continued to be targets for lawmakers who want to reform the CFPB with an eye toward scaling back some of its vast powers.

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