Consumer Group Sounds Alarm as CFPB Slowly Dies
Internal memo reveals plan to effectively stop meaningful enforcement
This has been Elon’s goal since he tweeted (or X’d) RIP CFPB.
The National Consumer Law Center (NCLC), in response to a memo released to CFPB staff, is raising the alarm: The CFPB is not going to be doing much enforcement anymore.
According to the memo, the CFPB will move away from supervising non-banks and Big Tech financial companies, including payday lenders, student loan servicers, digital wallets and payment apps, and a majority of the mortgage market. The memo also says the Bureau will deprioritize many issues that cause significant harm to people across the country, including medical debt, consumer data protection, and digital payments.
In short, they won’t be doing a damn thing but serving the interests of Big Banks and payday predators.
NCLC, of course, says this is very, very bad.
And, it is.
“The Administration cannot simply ignore congressional mandates and slash the Consumer Financial Protection Bureau, which has spent more than 15 years as an essential financial watchdog, returning $21 billion to over 200 million consumers and protecting people and honest businesses when companies deceive and abuse consumers,” said Lauren Saunders, associate director of the National Consumer Law Center. “Nonbanks’ shoddy business practices were a significant driver of the financial crisis of 2007, causing millions of people to lose their homes, jobs and savings. By focusing solely on large banks, and ignoring the statutory mandate to supervise nonbanks and enforce the law across its entire jurisdiction, this Administration is clearing the way for unscrupulous companies to once again violate the law and take advantage of ordinary people.”
Meanwhile, at least some states are taking action to protect consumers - and take on payday predators:
New York is taking a stand against payday predators. Specifically, New York’s Attorney General is suing both online lender MoneyLion and earned wage access (EWA) provider DailyPay for exploiting New Yorkers desperate for easy access to cash.
Unfortunately, it seems any meaningful enforcement of consumer protections will now be left to the states.
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If you have a consumer protection concern or believe you are the victim of a predatory consumer finance scheme, start with your state’s Attorney General.
Attorneys General typically have consumer protection divisions and can apply relevant state laws to your situation. Sometimes, if an AG asks, a company will answer.
Second, let your Member of Congress know. One, they may be able to assist with a resolution. But also, it is important for Congress to know their constituents value the work formerly performed by CFPB. Congress can rescue the consumer champion from the DOGE Death Star . . . if they want to.