Consumer Financial Protection Bureau

  • April 15, 2013

    by Jeremy Leaming

    Despite the lofty rhetoric to the contrary, the Obama administration has failed to help the scores of Americans thrown out of their homes because of rampant foreclosure fraud. The administration instead chose to try to put a sheen of due diligence on a federal effort to get to the bottom of what David Dayen for Salon calls “the largest consumer fraud in the history of the United States.”

    With the nation’s economy still hobbled by high unemployment and a growing gap between the superwealthy and everyone else, the U.S. Treasury Department recently revealed a pathetic settlement with some of the shady bankers behind the criminal foreclosure schemes that fails to provide little if any help to the millions of victims of the tawdry financial machinations. Part of the problem, as Dayen reports, centers on the fact that the federal government allowed consultants hired by banks to conduct so-called independent reviews of millions of foreclosures. The consultants, Dayen continues, made millions and only completed a tiny portion of “independent reviews” requested by scores of aggrieved homeowners. When the Treasury settled with the bankers it announced the “vast majority" of borrowers  – 3.4 million -- will receive paltry sums, like $300 or less.

    But the Treasury Department’s Office of Comptroller of the Currency (OCC) likely didn’t expect U.S. Senators to dig much into the obviously overblown and flawed review of the millions of foreclosure victims. And they likely were not expecting Elizabeth Warren, one of the nation’s most recognizable and passionate spokespersons on behalf of the middle class, to be holding a U.S. Senate seat and a committee position to zero in on their woefully or intentionally inept handling of the foreclosure crisis. 

    But last week, Sen. Warren (D-Mass.), former Harvard Law School Professor, longtime consumer rights advocate and driving force behind the creation of the Consumer Financial Protection Bureau did just that. And it was not the first time the senator has used her platform to highlight the federal government’s bungling of the foreclosure crisis. Last week, as TPM’s Sahil Kapur reported Warren has in just a few months in the Senate “seized opportunities to highlight questionable banking practices an ostensibly lax regulatory response, a chamber frequently criticized for its coziness with Wall Street.”

    During a subcommittee hearing Warren, who as Dayen notes has “a grass-roots army of enthusiastic supporters” and “makes headlines crossing the street,” blasted the OCC regulators for “withholding information they said they possessed about improper foreclosures or other abusive financial practices from victims of those practices seeking recourse in court,” Kapur reported.

    The regulators told Warren they had not made a decision about what information they will make public about criminal foreclosures.

    “So you have made a decision to protect the banks but not a decision to tell the families who were illegally foreclosed against?” Warren asked the regulators.

  • February 4, 2013

    by Jeremy Leaming

    Shortly after Sen. Majority Leader Harry Reid (D-Nev.) announced so-called filibuster reform, TPM reported that the chamber’s chief ringleader of obstruction, Sen. Minority Leader Mitch McConnell (R-K.Y.) “bragged” about killing the serious reforms that would have undermined obstructionists’ ability to so effectively wield the tool.

    In this post not long before the “filibuster reform,” was announced I noted that it appeared Reid was prepared to suffer even more obstructionism. (TPM had reported that Reid was ready to forgo a simple-majority vote to make real changes to the filibuster that would require senators to actually mount and sustain a filibuster, instead of relying on an easy and stealthy manner of deploying the filibuster.)

    Then late last week, as reported by TPM’s Brian Beutler, McConnell and 40 of his Republican colleagues promised try again to block the confirmation of Richard Cordray to permanently head the Consumer Financial Protection Bureau “unless Democrats agree to pass legislation dramatically weakening the agency.”

    President Obama overcame the first Republican blockade of his choice to the head the CFPB via a recess appointment that will leave him on the job until the end of the year. A recent, though widely attacked, opinion by the U.S. Court of Appeals for the District of Columbia Circuit, found that Obama’s recess appointment of Cordray and three nominees to fill vacant seats on the five-member National Labor Relations Board were unconstitutional. The Obama administration has signaled it will appeal the opinion, with White House Press Secretary Jay Carney calling it “novel and unprecedented.”

     

  • January 25, 2013

    by Jeremy Leaming

    Senate Republicans devoted to protecting big business interests and undermining workers’ rights vigorously fought President Obama’s efforts during his first term to keep the National Labor Relations Board functioning and appoint a leader for the Consumer Financial Protection Bureau.

    Republicans in the Senate have long sought to ensure that Obama could not alter the makeup of the NLRB, in order to keep it pro-business or inoperative. Moreover, Senate Republicans were opposed to the creation of the CFPB, intended to crack down on some of the shady business practices that helped lead to the Great Recession; and after its creation they were bent on making it as ineffective as possible.

    Earlier today, the Republican agenda of hobbling the NLRB, which exists to enforce the National Labor Relations Act, was advanced by a ruling from a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit. According to the court, Obama’s appointments to the NLRB in early January 2012 during a 20-day recess of Congress were unconstitutional.

    The appeals court opinion is at odds with other rulings from appeals court circuits and the fact that for a century, presidents, citing Article II of the Constitution, have used recess appointments to fill executive branch vacancies.

    As The New York Times notes, the appeals court decision “also raises doubts about the legitimacy of Mr. Obama’s recess appointment” of Richard Cordray to the CFPB. Obama appointed Cordray the same time he selected the three members of the labor board. At the time Obama noted that he was forced to make the recess appointments because of the Senate’s refusal to move on his nominations to the board and the bureau. “The American people deserve to have qualified public servants fighting for them every day – whether it is to enforce new consumer protections or uphold the rights of working Americans. We can’t wait to act to strengthen the economy and restore security for our middle class and those trying to get in it, and that’s why I am proud to appoint these fine individuals to get to work for the American people.”  

    The opinion by the appeals court panel – all three judges are Republican appointees – is radical and sweeping. Adam Serwer, in a piece for Mother Jones, notes that if the appeals court decision were to be upheld – the Obama administration is likely to appeal it – it would invalidate NLRB decisions made since last January and also impact actions taken by the CFPB.

    The CFPB, Serwer writes “has done what liberals hoped and Republicans feared: Prevented companies from gouging consumers with the kind of unscrupulous business practices that caused a nationwide economic meltdown four years ago. Although Cordray’s appointment is being challenged separately, Friday’s ruling gives companies impacted by CFPG’s decisions an opening to argue that some of the CFPB’s actions should be invalidated.”

    But constitutional law experts argued at the time Obama made the recess appointments that he was on solid legal ground. In a Jan. 2012 piece for The Times, Harvard constitutional law professor Laurence Tribe said the president’s recess appointments “ought to be a slam dunk” and that the Constitution is clear on “reserving the authority the president needs to carry out his basic duties ….” 

  • February 1, 2012

    by Nicole Flatow

    In recess appointing Richard Cordray to the Consumer Financial Protection Bureau and three others to the National Labor Relations Board, President Obama has acted “sensibly and soundly to defend his own prerogatives,” UNC Chapel Hill constitutional law professor Michael Gerhardt said during a House Oversight and Government Reform Committee hearing Wednesday.

    During a more than three-hour hearing that featured sharp questioning and a host of objections to President Obama’s actions by Sen. Mike Lee, Gerhardt explained the clear constitutionality of President Obama’s action, and praised the Office of Legal Counsel’s recent memorandum defending the legality of the action as a “perfectly good example” of the kind of nonpartisan legal analysis performed by the office.

    After dismissing arguments that President Obama did not act during an actual “recess” because the Senate held pro forma sessions every three days, Gerhardt went further to explain that Obama has an affirmative constitutional duty to enforce the laws faithfully, which he was aiming to effectuate in making recess appointments.

    “No doubt in this case the president considered that if he didn’t act there would be laws left unenforced --  laws that he’s obviously trying to do what he can to put into implementation,” Gerhardt said.

    Some of the other witnesses testified that the recess appointments have resulted in uncertainty for businesses, because decisions made by the NLRB and actions taken by the CFPB may be invalidated if legal challenges to Obama’s appointments are successful.

    But Gerhardt agreed with Rep. Danny Davis during questioning that all actions and major pieces of legislation are subject to legal challenge, and there is nothing unique about Obama’s recess appointments.

    “It’s sort of a false premise to say that recess appointments are likely to create litigation when the litigation is likely to take place in any event,” Davis said. “Whether these are recess appointees or any other kind of appointees, individuals still have the option to ask for judicial review.”

    Around the same time that this hearing was occurring, the Senate Banking Committee was also reviving the issue of Obama’s recess appointments during an oversight hearing involving Richard Cordray.

    As The National Law Journal’s Jenna Greene explains:

  • January 16, 2012
    Guest Post

    By Cedric Ricks, Communications Associate, National Fair Housing Alliance


    Nearly 46 years ago, Dr. Martin Luther King Jr. led a 1966 summer march in Chicago's Marquette Park demanding fair housing. King protested a dual housing market, in which whites were free to reside wherever they could afford, but African-Americans were barred from many parts of Chicago and in other American cities because of restrictive covenants, social practice and discrimination in lending

    Before he left Chicago, King referred to the historic protest as "a first-step in a 1,000-mile journey." Since then real progress has been made with the passage of the federal Fair Housing Act of 1968 - passed one week after King's assassination - and the enactment of the Equal Credit Opportunity Act of 1974.

    But to achieve a broad affirmative vision of fair housing many additional steps are still needed. It's entirely fitting we consider what comes next as our nation honors Dr. King's birthday with a federal holiday.

    Congress took an important step forward toward equality and justice with the creation of the Consumer Financial Protection Bureau, and President Obama advanced even further this month by appointing former Ohio Attorney General Richard Cordray to lead the Bureau.  

    The CFPB has one central mission: to make the market for consumer financial products and services work for ALL consumers, responsible providers and the economy as a whole. To accomplish its mission, the Bureau seeks to promote transparency and consumer choice while preventing unfair, deceptive and discriminatory practices.