The Story Thus Far: Consumer Protection
Shane Hebel // 3/16/17 //
Since Trump took office, bitter fights have erupted within the federal government about the future of consumer protection. A deregulatory ideology has influenced executive orders and pending legislation that would roll back protections created through the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB). The CFPB and its director, Richard Cordray, have sustained particularly heavy fire, both from legislators and federal judges.
Consumer protection groups have sought to educate lawyers about the implications of Trump’s election for the consumer protection landscape.
o The American Bar Association, National Association of Consumer Advocates, Ballard Spahr, and Holland & Knight have all hosted webinars on this subject in the past two months.
o Jeff Sovern (NYT) analyzed President Trump’s competing objectives of protecting consumers and “siding with the system.
President Trump’s attempts to roll back Dodd-Frank and the CFPB have prompted fierce debate.
o President Trump signed an executive order stating that agencies must eliminate two regulations for every new one they create.
o He has also signed an executive order to overhaul Dodd-Frank.
o Steven Dennis and Elizabeth Dexheimer (Bloomberg) argue that any repeal of Dodd-Frank will be slow-moving due to lack of a coordinated Republican strategy.
o Yuka Hayashi (WSJ) argues that it is unclear whether the CFPB is even subject to executive orders given its independent status.
The constitutionality of the CFPB has been questioned by Ken Cuccinelli, former Attorney General of Virginia (American Banker).
o It appears that Trump may side against the CFPB in a pending constitutional challenge to its structure (Law360)
o A bill filed by Rep. Ratcliff and Sen. Cruz in mid-February in the House and the Senate respectively would repeal the CFPB.
o Ylan Mui (CNBC) details bill that would allow the president to fire the CFPB director and argues for a five-member bipartisan committee instead of a director for the independent agency.
CFPB Director Cordray’s future with the administration is unclear.
o Joseph Rubin (American Banker) and Ian McKendry and Kate Berry (American Banker) have speculated that Trump will attempt to remove Cordray, even though Cordray’s term lasts until mid-2018.
o Cass Sunstein (Bloomberg) argues that it would be illegal for Trump to fire Cordray due to the independent nature of the CFPB.
o Lorraine Woellert and Josh Dawsey (Politico) argue that Cordray’s supporters are “itching for a fight” and that he won’t step down.
o Brian Simmonds Marshall (ACS Blog) argues that Cordray should not be fired “for cause” and that such a firing would be the first in the nation’s history.