Is There a Future for the Consumer Financial Protection Bureau?


It is important for residents of the Chicago area to know that they have rights as consumers, even when they have difficulty paying bills and when they accrue debt. Yet commentators have voiced concerns that the Consumer Financial Protection Bureau (CFPB), the watchdog agency that helps to protect consumers at the federal level, may be on a “collision course” with the U.S. Department of Justice under Trump. As a recent article in American Banker points out, the ability for the CFPB to continue operating independently may depend upon whether it is able to appeal the decision from the D.C. Circuit Court back in October and “may hinge on whether the Justice Department allows it to move the case forward.” As the article clarifies, “with President-elect Donald Trump due to take the reins of Justice in January, there are growing doubts that the CFPB can prevail.”
What do you need to know about the future of the CFPB and consumer protection initiatives under Trump?
How the D.C. Circuit Court Ruling Can Be Upheld Under Trump
As the article explains, in October of this year the D.C. Circuit Court determined that “the CFPB’s single-director structure was incompatible with its status as an independent federal agency, finding that its leader would have to serve at the pleasure of the president to avoid violating the Constitution’s separation of powers.” The CFPB is appealing, but as we mentioned, whether or not the CFPB’s appeal can move forward may depend largely upon the Justice Department in 2017.
Why would the U.S. Department of Justice have any say over the CFPB’s ability to appeal the D.C. Circuit Court’s decision? The issue is Title X of the Dodd-Frank Act. This part of the law establishes the CFPB, and it also provides the CFPB’s authority with regard to litigation. However, there is a limitation when it comes to an appeal to the U.S. Supreme Court. As the article explains, before the CFPB can appeal to the highest court, the law specifies that the agency “must first file a written request to the U.S. Attorney General within a specified timeframe,” and then the Attorney generally either “concurs with such request or fails to take action within 60 days of the request.”
If Sen. Jeff Sessions, who has been named as Trump’s pick for the position of attorney general, is confirmed and decides to avoid concurrence with the CFPB, the agency may be limited drastically in its abilities.
Other Options for the CFPB if Trump’s Attorney General Pick Withholds Concurrence
In the event that Sessions becomes Attorney General and withholds a concurrence, what options does the CFPB have? First and perhaps most importantly, the agency already has requested an en banc hearing with the D.C. Circuit justices. If the rehearing request is granted, the D.C. Circuit panel still can uphold its October ruling. If that happens, or if the en banc hearing request is denied, commentators suspect that the Trump administration will want to ensure that the CFPB appeal does not go any further.
If the CFPB cannot appeal to the Supreme Court, will consumers in Chicago be impacted? It is difficult to predict exactly what could happen to the agency, but the article suggests Richard Cordray, the current director of the CFPB, likely will be fired by Trump and replaced. What that could mean for consumers is not yet clear.
In the meantime, it is important to discuss any legal questions you have about consumer protection or debt collection fraud with an experienced Oak Park consumer protection attorney. An advocate at our firm can speak with you today. Contact the Emerson Law Firm to learn more.
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