AFSA 100 Day Tracker | State AGs Send Letter Supporting CFPB; Administration Still Deciding on CFPB Future

WHAT HAPPENED

During a press briefing on Monday, White House Press Secretary Sean Spicer stated that President Trump has not yet decided whether to replace Consumer Financial Protection Bureau (CFPB) Director Richard Cordray before the expiration of his term. Today, Cordray stated today that he has no intention to step down before the end of his term. He also said the CFPB will continue to enforce its existing regulations while its lawyers “digest” how President Trump’s executive order halting new regulations will apply to an independent agency like the CFPB.

The Congressional Black Caucus has sent a letter to President Trump registering their strong opposition towards any action to remove Director Cordray. The letter follows a joint op-ed they published in The Hill last week as well as a letter sent by House Financial Services Democrats.

Seventeen Democratic state attorneys general (AGs) filed a motion to intervene in PHH Corporation v. CFPB, the case currently before the U.S. Court of Appeals for the D.C. Circuit that challenges the CFPB’s constitutionality, earlier this week. The AGs argue that, “the incoming administration has indicated that it may not continue an effective defense of the statutory for-cause protection of the CFPB director,” and “a significant probability exists that the pending petition for rehearing will be withdrawn, or the case otherwise rendered moot.” They also argue that they have a vital interest in defending the CFPB because of their authority to enforce state and federal consumer financial protection laws.

The CFPB was also discussed during last week’s confirmation hearing for Treasury Secretary nominee Steven Mnuchin. When Senator Carper (D-DE) asked for his take on the CFPB, Mnuchin stated that the biggest issue he has with the CFPB is that he doesn’t believe it should be funded by the Federal Reserve. Rather, it should be funded through the appropriations process. During the hearing, Mnuchin also highlighted the Trump Administration’s belief in appropriate regulation, emphasizing how the CFPB, Federal Reserve, and other agencies often have overlapping regulations.

WHAT IT MEANS FOR AFSA MEMBERS

While the Trump Administration has not yet announced if they will replace Director Cordray, Mnuchin’s comments during the hearing and in previous statements indicate the administration’s opposition to overregulation and its potential support for changes to the bureau’s structure and funding. Cordray’s comments today demonstrate how the CFPB does not intend to change its way of regulating during this transitional period.

The Democratic state attorneys general motion in the PHH case is another example of Democratic opposition to changes to the Bureau’s structure. In addition, many of these attorneys general have coordinated with the CFPB on enforcement actions or have used their authority under Title X of the Dodd-Frank Act to enforce federal consumer financial protection laws, including the prohibition on unfair, deceptive and abusive practices.

WHAT IS AFSA DOING

AFSA is encouraged by Mnuchin’s criticism of the bureau’s funding mechanism and is committed to working with the Administration on changes to the Dodd-Frank Act. AFSA is also continuing its outreach to both Congressional Republicans and Democrats regarding CFPB reform.