Mark T. Dabertin, special counsel in the Financial Services Practice Group of Pepper Hamilton, was quoted in the September 19, 2019 Reverse Mortgage Daily article, "CFPB Structure Could See Supreme Court Challenge as Enforcement Actions Rise."
Changing the structure of the CFPB could make the agency more malleable to those political headwinds, according to Mark Dabertin, an attorney in law firm Pepper Hamilton’s Financial Services Practice Group.
“This structure allows the incumbent Director to exercise a degree of independence that would be lost if the president could replace the Director at will,” says Dabertin in an email to RMD. “If the latter were to occur, the CFPB would likely be viewed as purely political and its actions would constantly be at risk of being undone.”
The more the CFPB is viewed as a political entity, the greater the likelihood is that it can be dissolved, Dabertin explains. However, if the CFPB disappeared, its overlap of responsibilities with another federal agency could allow some responsibilities transferred to the CFPB to revert to the agency they rested with prior to Dodd-Frank’s passage.
“Significant overlap exists between the enforcement responsibilities of the CFPB and those of the Federal Trade Commission (FTC), with both agencies at times targeting the same industries,” Dabertin says. “Rulemaking responsibility for the 14 consumer laws and regulations for which rulemaking was transferred to the CFPB under the Dodd-Frank Act would revert back to the agencies from which they were transferred.”
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In terms of where Kraninger has focused the bulk of her directed enforcement actions, Dabertin attributes most of them to businesses focused on debt-collection. While she has taken more actions overall, this indicates some alignment with Mulvaney’s philosophy.
“Director Kraninger’s focus on debt collection-related activities, which accounts for a significant percentage of the enforcement actions taken under her tenure, is very consistent with the initial public statements made by Mick Mulvaney regarding the then-future direction of the CFPB,” Dabertin says. “Enforcement under Kraninger has focused on debt collection/debt relief organizations, and preventing consumers – particularly the economically disadvantaged, veterans, and others who are vulnerable to abuse – from being unduly taken advantage of.”
While this emphasis is also consistent with the Bureau’s path as charted by Cordray, there is one critical exception, according to Dabertin.
“Namely, [that exception is that] the CFPB is longer engaged in rulemaking primarily through high-profile enforcement actions,” Dabertin says. “To this end, a review of the CFPB’s current website evidences strong ongoing public outreach regarding what ‘abusive’ should mean for purposes of unfair, deceptive, or abusive acts or practices (UDAAP). This distinction is a ‘pro-business’ difference because it allows financial service providers to both know and have a voice in weighing-in on the applicable rules.”