May 14, 2018
Office of the Executive Secretary
Consumer Financial Protection Bureau
Re: Appleseed Comments Regarding Bureau Enforcement Processes
Docket number CFPB-2018-0003
Dear Ms. Jackson:
Appleseed files this comment in response to the Consumer Financial Protection Bureau (“CFPB”) Request for Information (“RFI”) Regarding Bureau Enforcement Processes.
Thank you for the opportunity to submit comments on this important subject. We strongly support the CFPB’s mission and the current enforcement process framework and believe that enforcement staff must continue to receive the resources and authority they need to do their jobs effectively, without any changes that could delay needed administrative relief for consumers.
The CFPB was one part of the major legislation coming out of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Dodd-Frank addressed a host of issues raised in the financial crisis, including the need for a single federal regulator dedicated to oversight of the federal consumer financial markets. Until the CFPB opened its doors in 2011, the responsibility of standing up for the fair treatment of consumers by banks and other lenders had been scattered across half a dozen federal regulators and was often neglected. Other financial companies, such as debt collectors, credit reporting agencies and payday lenders, had faced little or no real federal oversight. The clear inadequacy of that arrangement, and the enormous harm consumers suffered as a result, led Congress to establish an agency expressly dedicated to this one task.
Since its inception, the CFPB has used its authority wisely to protect the public. The agency’s enforcement cases have resulted in nearly $12 billion in relief for American families. Approximately 29 million Americans—almost 10 percent of the adult American population— have received some form of restitution in Bureau enforcement cases. Over 90 percent of this restitution came in cases where the defendant engaged in a deceptive act or practice. In well over a hundred enforcement cases the CFPB has had very few losses or set-backs in litigation, and federal judges have agreed with nearly every position taken by the CFPB’s enforcement office when given the opportunity to do so. Appleseed believes that much of the criticism leveled at the CFPB has come from unfair characterizations by certain persons in the financial services industry or from those that were found to have engaged in misconduct or other illegal behavior towards consumers.
The CFPB stands as an effective counterpoint to the strong financial services industry in a way that an ordinary consumer cannot. We believe that the CFPB’s current enforcement processes are appropriate and necessary in order to be a successful advocate for the consumer. The CFPB must fulfill its statutory mandate to enforce the federal consumer protection laws so that there remains protection at the federal government level for the ordinary consumer.
Appleseed is concerned that many of the changes that the RFI questions appear to contemplate could unduly delay investigations or litigation, allowing consumer harm to continue without legitimate or apparent benefit. The Bureau should not modify its procedures in a way that could give lawbreakers tools to thwart the Bureau’s work on behalf of the public.
Every defendant in a CFPB enforcement matter has the right to seek review by a judge and has the protection of due process. Policies and procedures should not be revised to create further decision-making hurdles that either decrease the likelihood of CFPB staff initiating new enforcement actions or create administrative bottlenecks in pursuing justice during the enforcement process.
CFPB staff also should have considerable discretion in determining when coordinating enforcement efforts with other state and federal agencies is appropriate. In some cases, coordinating enforcement actions can lead to broader, more effective relief for consumers and clear conclusions for companies. In others, the costs and complexity of coordinated enforcement can slow down relief and create lowest-common-denominator cases that leave many borrowers insufficiently compensated.
Hamstringing the enforcement staff does no one any good. If the Bureau makes it more difficult for enforcement staff to hold wrongdoers accountable for illegal business practices, some businesses may take advantage of these changes in bad faith. Most US businesses are committed to lawful business practices, and they and US consumers prefer an efficient, effective enforcement program at the CFPB.
In summary, Appleseed sees no need to change what has been the enforcement process framework established at the CFPB’s inception. We also urge the CFPB to maintain its current level of commitment to enforcement and to remain an advocate for those consumers who cannot alone bring those who take advantage of them to justice.
Appleseed again appreciates the opportunity to comment on the CFPB’s enforcement processes.
For further clarification on these comments, please contact us (see below).
Director, Financial Access and Asset Building