Friday, 10 July 2020

Attorneys general call for Consumer Financial Protection Bureau independence

SACRAMENTO – California Attorney General Xavier Becerra on Friday joined attorneys general from 17 other states in calling on the Trump Administration to respect the independence of the Consumer Financial Protection Bureau.

The CFPB protects consumers from fraud, abuse and unfair business practices, and has returned $12 billion to American consumers since being created in the wake of the financial crisis. It was carefully crafted by Congress to be an independent agency.

On Nov. 24, CFPB Director Richard Cordray stepped down and Deputy Director Leandra English became acting director pursuant to the law governing the CFPB, 12 USC s. 5491(b)(2), which states: “There is established the position of Deputy Director, who shall - (A) be appointed by the Director; and (B) serve as acting Director in the absence or unavailability of the Director."

That same day, President Donald Trump moved to politically appoint a known antagonist of the CFPB, Mick Mulvaney, the Office of Management and Budget director, as the acting CFPB Director.

"Sick, sad joke" are the words Mulvaney has used to describe the agency which protects consumers, veterans and loan borrowers.

“Under the leadership of Richard Cordray, the CFPB set new standards for protecting mortgage and student borrowers, brought landmark actions against big banks, and proposed critical reforms to payday lending practices, mandatory arbitration, and bank overdraft fees,” said Attorney General Becerra. “President Donald Trump, however, is attempting a hostile takeover of this independent agency by contravening the Dodd-Frank Act and installing as acting director a man who has repeatedly sided with Wall Street instead of Main Street. It is an absolute insult to hardworking Americans.

"In California and the Attorney General's Office, we are committed to moving forward, and we will do everything in our power to defend this critical agency," added Attorney General Becerra. “The CFPB must remain independent of Wall Street and politics. Its job is to protect and empower consumers.”

In the amicus brief filed Friday, Attorney General Becerra and 17 attorneys general argue that while there is a legal mechanism for President Trump to nominate a new director for the CFPB – an appointment subject to the advice and consent of the Senate – President Trump has not taken that path here.

Undermining the statutory structure of the agency harms the States’ ability to enforce myriad consumer financial laws that protect their residents.

Attorney General Becerra joins the attorneys general of Washington D.C., Connecticut, Delaware, Hawai'i, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, And Washington in filing this amicus brief.

Since taking office, Attorney General Becerra has supported and worked with the CFPB. Among other actions, he stands with the agency for issuing its Payday Lending Rule, which will prevent the worst harms associated with short-term payday lending, and for launching its Arbitration Rule, which would have allowed people to pursue justice against financial services companies had it not been overturned by Republicans in Congress.

In addition, Attorney General Becerra, joined by 12 attorneys general and the Consumer Financial Protection Bureau, secured a settlement with Aequitas Capital Management Inc., a private equity firm, to provide over $51 million in debt relief to Californians who attended Corinthian Colleges and $183 million nationwide.

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