Republicans take issue with CFPB agenda
On September 12, several Republican senators sent a letter to CFPB Director Rohit Chopra expressing concerns that the Bureau is again pursuing “a radical and highly-politicized agenda unbounded by statutory limits.” In particular, the letter took issue with recent Bureau reports on the use of overdraft fees (covered by InfoBytes here and here), calling the agency’s actions a “relentless smear campaign” against banks. “Charging fees that customers chose to pay should not be disturbing or illegal, and yet, the CFPB appears to have developed a particular disdain for banks charging their customers for services, pejoratively calling overdraft protection ‘junk fees,’” the letter stated. Additionally, the letter claimed that the Bureau is changing its rules in order to publish previously confidential information about financial institutions to make it easier to threaten them with reputational harm (covered by InfoBytes here), without affording the financial institution the similar ability to, for example, disclose the existence of a CFPB examination. Among other things, the new procedural rule establishes a disclosure mechanism intended to increase transparency of the Bureau’s risk-determination process that will exempt final decisions and orders by the CFPB director from being considered confidential supervisory information, allowing the Bureau to publish the decisions on their website. According to the senators, the rule requires nonbanks to keep confidential information relating to a decision issued by the Bureau, including facts that could question the decision or raise procedural concerns. “The one-sided nature of the CFPB’s rule change gives the agency the ability to publicly tarnish an institution’s name without affording the firm the power to defend itself,” the letter said. The letter also decries a recent change to the agency’s rules of adjudication to make it more difficult for companies to defend themselves against novel enforcement theories by bypassing an administrative law judge and permitting the director to rule directly on the validity of the legal basis for the enforcement action.