CFPB Enforcement Actions Rise to Highest Level in 5 Years

Regulatory enforcement actions made by the Consumer Financial Protection Bureau (CFPB) have risen to their highest level in five years, to levels not seen since the Bureau was under the control of Director Richard Cordray during the Barack Obama Administration. This is according to an analysis of the CFPB Online Enforcement Database at Law360.

While Democratic lawmakers have expressed concern about the direction of the Bureau under the Donald J. Trump Administration – in some instances feeling that the Bureau has avoided using its enforcement authority to the detriment of American consumers – the watchdog brought 19 different enforcement actions during its last fiscal quarter spanning from July through the end of September, “a pace nearly four times what it was the previous quarter and more than double what it was the same quarter last year,” Law360 notes.

Part of the thing that may be driving the increased enforcement volume is the fact that investigations related to enforcement actions can take years, so this rise could coincide with the simultaneous conclusion of several investigations, according to Allen Denson, a partner at the Hudson Cook law firm based in Washington, D.C.


“I’ve definitely noticed the uptick,” said Denson to Law360, an attorney who has represented clients before the CFPB. “I think that there were a lot of things pent up that are just now reaching their culmination and coming out. Investigations tend to take years, so that’s why you’re now seeing the uptick.”

An official portrait of CFPB Director Kathleen L. Kraninger. CFPB | CC0
CFPB Director Kathleen L. Kraninger

Enforcement actions at the CFPB notably stalled in the period of time between the exit of former Director Cordray and the confirmation of current Director Kathleen Kraninger. In the interim period under Acting Director Mick Mulvaney, he spearheaded several initiatives while at the Bureau including his firing of all the members of the Bureau’s advisory boards, as well as a failed attempt to change the Bureau’s name.

Mulvaney left the CFPB to become the Acting White House Chief of Staff following the departure of John F. Kelly from that position in December 2018, a position he held until March 2020 when he was appointed as the U.S. Special Envoy for Northern Ireland. Mulvaney was succeeded in the Chief of Staff position by former North Carolina Congressman Mark Meadows.

After the confirmation and installation of incumbent Director Kathleen Kraninger, the CFPB has returned to a more active regulatory posture and appears to be following through on a statement the director made this past summer regarding an expected increase in enforcement actions through the remainder of 2020.

Recently, Director Kraninger expressed support for a United States Supreme Court challenge to the single director structure of the agency she leads as unconstitutional. The Court ruled in June that it agreed with the structure’s lack of constitutionality, though stopped short of invalidating the agency at-large.

The CFPB’s purview over financial services companies gives the agency regulatory enforcement authority over the reverse mortgage industry. Consumer complaints to the CFPB specifically about reverse mortgage companies have slowed over the course of the COVID-19 coronavirus pandemic, according to the Bureau’s Consumer Complaint Database.

Read the story at Law360 (subscription required).

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