The Consumer Financial Protection Bureau is ramping up enforcement actions ahead of a possible political showdown between President Donald J. Trump and the agency’s director, Richard Cordray. They appear to be targeting different areas of financial services and without regard for the size of the entity.
As an example of this, note that the CFPB filed two separate consent orders Monday against CitiFinancial Servicing and CitiMortgage (Mortgage Lending) over claims the servicers failed to help borrowers with foreclosure relief. That came just days after the bureau filed lawsuits against TCF National Bank (Mortgage Lending) and student loan servicer Navient (Student Loans) after both companies said they refused to be pressured into settling allegations of wrongdoing before the Trump administration took office. Our office has taken calls from Brokers in Florida, California, and Texas asking us for help with regulatory inquiries.
Though the business community had hoped a new administration would rapidly put a halt to the CFPB’s aggressive approach, so far the change in political power instead appears to be emboldening the CFPB to act.
“The CFPB is going to be more aggressive in the short term because their future is uncertain,” said Ashley Taylor, a partner at the law firm Troutman Sanders. “Agencies in transition often become more aggressive if the people who work there think their power will be curtailed.”
On Friday, the White House issued an executive order calling for a freeze of all pending or new regulations. However, the order applies only to executive agencies and not the CFPB, though non-executive agencies are generally expected to follow suit.
The CFPB has not so far issued any new regulations—which might be overturned via the Congressional Review Act of 1996—and has focused its efforts on enforcement activity.
And that, folks, is why you need us more than ever. To find out more about our Audit Protection Plan and how we stand with you in the event of an audit or enforcement action, call us at (800) 656-4584.
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