Revamped Enforcement Policies and Priorities at the CFPB

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During the past year, we were often reminded by people from all sides of the political spectrum that “elections have consequences.” This is particularly true for financial institutions as the Consumer Financial Protection Bureau (CFPB or the “Bureau”) shifts its priorities under the new administration. Financial institutions should expect enforcement to ramp up as the CFPB reverses efforts made by the Trump administration to reduce oversight and enforcement activities. 

In response to the 2008 financial crisis, Congress established the CFPB to ensure that consumers have timely and understandable information to make responsible decisions about financial transactions, protect consumers from unfair or abusive practices, and promote fair competition by enforcing consumer protection laws consistently.^[1] The CFPB is responsible for enforcing numerous consumer protection laws and the regulations implementing those laws, including the Fair Debt Collection Practices Act, Equal Credit Opportunity Act, Fair Housing Act, Truth-in-Lending Act, and Fair Credit Reporting Act. 

When the Trump administration assumed control over the CFPB in 2017, the Bureau initially froze enforcement activity for several months.^[2] As its priorities shifted from enforcement and regulation to consumer education, the CFPB saw enforcement activity decrease by 54 percent.^[3] 

President Biden’s administration has moved quickly to reinvigorate the CFPB’s enforcement activities, many of which had been marginalized during the Trump administration. Acting Director David Uejio, appointed by President Biden on his first day in office, announced that the CFPB will be “reversing policies of the last administration that weakened enforcement and supervision.”^[4] 

In February 2021, President Biden nominated Rohit Chopra to serve as the next Director of the CFPB. Mr. Chopra, currently serving as the Commissioner of the Federal Trade Commission, is expected to be confirmed by the Senate before the end of the summer. During the confirmation process, he has signaled that many changes may be in store for the CFPB. Likely priorities for enforcement include the following: (1) pandemic-related relief programs including consumer protection provisions of the CARES Act; (2) regulatory initiatives directed at eliminating racial disparities in lending practices; (3) deceptive or abusive practices related to student loans; (4) inaccurate credit reporting; (5) failure to protect consumer data; and (6) compliance with the Military Lending Act and the Servicemembers Civil Relief Act. 

As policies and priorities continue to evolve at the CFPB, banks, credit unions, and other financial institutions should evaluate their consumer protection compliance programs to identify risks of noncompliance and take all necessary corrective actions. If you need assistance with any of these issues, please contact me or one of the other attorneys in our Bankruptcy & Creditors’ Rights and/or Banking and Finance Groups.

^{[1] 12 U.S.C. § 5511(b).}

^{[2] Alan Zibel, Consumer Carnage, How Federal Enforcement of Consumer-Protection Laws Has Declined Under Trump, Public Citizen (Mar. 13, 2019), https://www.citizen.org/wp-content/uploads/migration/consumeragencies.pdf.}

^{[3] Id.}

^{[4] David Uejio, The Bureau Is Taking Much-Needed Action to Protect Consumers, Particularly the Most Economically Vulnerable, Consumer Financial Protection Bureau (Jan. 28, 2021), https://www.consumerfinance.gov/about-us/blog/the-bureau-is-taking-much-needed-action-to-protect-consumers-particularly-the-most-economically-vulnerable/.}