Through early November of this year, the CFPB had collected about $1.4 billion in fines and consumer redress since Kraninger took over as director in December 2018, according to a Bloomberg Law analysis of enforcement actions. Many of the cases involved small mortgage firms and payday lenders.
In the roughly six years that Obama’s CFPB chief Richard Cordray led the agency, the industry paid $12 billion in fines and consumer redress, with Wells Fargo, JPMorgan, Citigroup Inc. and Bank of America Corp. among banks that were penalized.
Big banks “frankly should be nervous,” said Rick Fischer, a senior partner at Morrison & Foerster in Washington who represents financial service firms on CFPB matters. “They recognize what life was like under Cordray and they recognize the size of his civil penalties.”
CFPB Spokeswoman Marisol Garibay said the bureau is “vigorously using enforcement to protect American consumers” and is on pace this year to bring the second-highest number of actions in its history. They include a $122 million settlement in August with TD Bank over improper overdraft charges, as well as cases involving debt collectors, mortgage servicers and student lending.
“These actions include settlements that have resulted in consumer redress, penalties and consumer debt forgiveness in the hundreds of millions of dollars spanning all of the markets policed by the bureau and involving institutions of all sizes,” Garibay said in an email.
Tough Confirmation
Democrats acknowledge that the partisanship enveloping the CFPB will likely make confirming a director difficult, especially if Republicans keep control of the Senate after next month’s runoff elections in Georgia. The focus on appointing a progressive leader will also heat up the battle.
One solution to the potential logjam that the Biden transition team has been discussing, people familiar with the matter said, is to have the FTC’s Chopra run the agency on an acting basis. A federal law often used by Trump for temporarily filling vacancies of Senate-confirmed positions would allow Chopra to keep his current job and hold the CFPB post for about 300 days. Chopra worked with Warren to launch the bureau in 2010 and was then appointed an assistant director, overseeing the agency’s efforts on student lending.
The incoming Biden administration is likely to overturn a number of the Trump-era policies that the CFPB enacted under Mulvaney and Kraninger, Democrats say. One early, and easy, change is expected to be the agency’s description of itself, which the Trump administration revised to prioritize ferreting out overly burdensome regulations.
Another, observers say, would be to bring back a rule that cracked down on payday lenders that was championed by Cordray. Under Trump, the agency scrapped guidelines that required lenders to verify that borrowers have the means to pay back the high-interest loans.
Wall Street is also expecting the regulator to review the controversial, though lucrative, practice of overdraft fees. The charges generate some $12 billion for U.S. banks.
--With assistance from Evan Weinberger.
This article was provided by Bloomberg News.