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Senate Banking GOP: ‘The CFPB Must Stay Within the Boundaries of the Law’

CFPB Director Rohit ChopraCommittee leaders submitted a letter to CFPB Director Rohit Chopra on the bureau’s regulatory overreach and urged the director to “reverse course” on its tactics to avoid harming financial institutions and customer relationships.

09/13/2022 2:30 P.M.

2 minute read

Members of Congress on the Senate Committee on Banking, Housing and Urban Affairs are urging Consumer Financial Protection Bureau Director Rohit Chopra to rein in the bureau’s regulatory overreach.

The topic, also prevalent in bipartisan Senate and House committee hearings on Chopra’s semiannual report to Congress this spring, resurfaced Sept. 12 in a letter to Chopra from U.S. Sens. Pat Toomey, R-Pa., and Richard Shelby, R-Ala., and the remaining GOP members of the committee.

“We are deeply concerned that under your leadership, the Consumer Financial Protection Bureau (CFPB) has returned to its Obama-era roots as a lawless and unaccountable agency,” the letter states. “Rather than operating as a tough but fair and sensible regulator, the CFPB is again pursuing a radical and highly-politicized agenda unbounded by statutory limits. It has adopted an arrogant regulatory ethos: the CFPB can do whatever it wants.”

The letter cites the CFPB’s “name-and-shame tactics” related to convenience fees, which the bureau identifies as “junk fees,” and its rule change allowing the bureau to publish previously confidential information about financial institutions “in an apparent effort to make it easier to threaten firms with reputational harm.”

The largely unused procedural rule “to examine nonbank financial companies that pose risks to consumers” drew concerns from several commenters, including the banking industry, about the bureau’s process, ACA International previously reported. The CFPB will also make final decisions and orders in these proceedings public.

In its letter, the committee also noted, among other concerns, that “the CFPB recently changed its rules of adjudication to make it harder for companies to defend themselves against novel enforcement theories, and easier for the agency to engage in regulation by enforcement.”

The letter concludes by urging Chopra to stop using improper tactics to harm the reputations of financial institutions and to stay within the boundaries of the law, according to a news release.

Read the complete letter here.

ACA’s Take

ACA continues to work diligently to educate members of Congress on both sides of the aisle about the bureau’s regulatory approach and appreciates the committee leadership’s consideration of these concerns.

“When the CFPB acts justly under its mission to protect consumers and provide sound guidance to regulated entities, and keeps all stakeholders involved—the way Congress and the Administrative Procedure Act intended—improvements can be made that reduce the risk of significant negative consequences to consumers,” said ACA CEO Scott Purcell. “However, when the CFPB continues to make decisions in a vacuum without input from those closest to the details, and without regard to free-market economics, consumers are the ones who will suffer the most from these myopic decisions.”

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