The director will testify on the bureau’s semiannual report to Congress in the wake of legal challenges to the bureau’s funding structure, which could come to Congress to sort out.
12/05/2022 11:55 A.M.
3 minute read
Consumer Financial Protection Bureau Director Rohit Chopra will testify on Capitol Hill next month in a hearing before the House Financial Services Committee (HFSC) just before leadership in the chamber will switch over to a Republican majority.
Given the bureau’s approach to rulemaking through advisory opinions, guidance and new “CFPB Circulars,” plus the pending petition for certiorari from the bureau to the U.S. Supreme Court to review a 5th Circuit Court of Appeals’ decision declaring the bureau’s funding structure is unconstitutional—ACA International is working on advocacy prior to the hearing, including a letter to committee members.
During the Dec. 14 hearing announced in a news release from the HFSC, Chopra will present the bureau’s semiannual report to Congress and answer questions from committee members.
The bureau’s director typically testifies before the HFSC and Senate Committee on Banking, Housing and Urban Affairs in the spring and fall.
Last April, ACA submitted a letter to the HFSC for the hearing outlining its concerns with the CFPB’s actions in recent weeks and rhetoric toward the accounts receivable management (ARM) industry on behalf of members.
The bureau’s approach to cost-benefit analysis and “regulation by press release” were common themes in the hearing. Lack of accountability within the bureau’s Consumer Complaint Database was also discussed, ACA previously reported.
ACA’s letter for last year’s HFSC hearing focused on the bureau’s actions related to medical debt credit reporting and student loans, including in the form of inflammatory news releases, research with outdated facts and an inaccurate portrayal of the debt collection industry as one that is unregulated.
These actions by the bureau continue, in addition to a myriad of actions the bureau has taken outside of the rulemaking process and their negative impact for the ARM industry, which ACA addressed in a letter to Chopra in October.
ACA will build on the advocacy in that letter before the December hearing, following advocacy campaigns on medical debt credit reporting and the bureau’s funding and leadership structure. The bureau filed a petition for cert for the U.S. Supreme Court to review the 5th Circuit Court of Appeals’ decision in November, ACA previously reported.
The CFPB’s funding through the Federal Reserve rather than congressional appropriations violates the U.S. Constitution’s separation of powers, ACA previously reported. ACA has long advocated for the bureau’s funding to be through the congressional appropriations process.
In designing the CFPB, Congress debated various structures and ultimately, in a partisan manner, opted for as little accountability as possible, which has been problematic ever since, noted Leah Dempsey, ACA’s lobbyist and shareholder at Brownstein Hyatt Farber Schreck.
“The uncertainty created by the CFPB’s wide swings in priorities, and its lack of accountability over the past several years, have prompted the need for judicial scrutiny of the agency,” Dempsey said. “As the Supreme Court considers key questions about the bureau’s structure and accountability, it would be appropriate for the CFPB to pause all policymaking, which would further complicate the outstanding questions created by the 5th Circuit Court of Appeals’ ruling.”
If legal challenges to the CFPB’s funding structure are reviewed by the U.S. Supreme Court as requested by the bureau, it’s likely they could send the issue back to Congress to determine how to bring the CFPB under the congressional appropriations process.
ACA will provide updates for members on advocacy before the HFSC hearing as it approaches and when Chopra will testify before the Senate Banking Committee.
In the next Congress, where Republicans will have a majority in the House of Representatives, oversight of the CFPB will likely ramp up under leadership of U.S. Rep. Patrick McHenry, R-N.C., who is expected to be chair of the HFSC.
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