Latest news with #ConsumerFinanceProtectionBureau
Yahoo
28-04-2025
- Business
- Yahoo
Federal Workers in Charge of Trump Terminations Also Firing Themselves
The people responsible for conducting Trump's mass firings at the Consumer Finance Protection Bureau are now firing themselves, according to a court filing first flagged by Politico's Kyle Cheney. Two weeks ago the CFPB, under the Department of Government Efficiency's direction, fired nearly 1,500 employees last week, leaving only about 200 people employed there. Now, as the remaining workers stay up day and night to manage the transition, they've begun including themselves in the firings. 'We are three positions off, but we are reconciling it,' read an email from CFPB COO Adam Martinez. 'My team doing all of the number/name crunching are running on low fuel and have not slept for a couple of days. They also happen to be RIFing themselves.' 'RIFing' refers to 'reduction in force,' a government term for layoffs. This happening at the CFPB—which is supposed to be the American consumer's strongest ally—is a dire sign for the already struggling agency. Aside from being gutted by DOGE, the agency will also no longer focus on key issues like protecting consumers making digital payments, people with medical debt, or those using peer-to-peer payday lending platforms.
28-04-2025
- Business
How to avoid credit card late fees after a court threw out a proposed cap
NEW YORK -- A Texas judge earlier this month threw out a federal rule that would have capped credit card late fees at $8. The Consumer Finance Protection Bureau finalized the rule last year as part of the Biden administration's efforts to do away with what it called junk fees. It was paused by the courts before it could take effect. At the time, the CFPB estimated that American families would have saved more than $10 billion in late fees annually had the fees been capped at $8, significantly less than the $32 average. Banks and industry groups argued that the rule didn't allow card issuers to charge fees high enough to deter late payments and discourage repeat violations. The Texas judge's ruling earlier this month came a day after a collection of major industry groups and the CFPB under President Donald Trump announced that they had reached an agreement to throw out the rule. Here's what to know about credit card late fees: The average late fee for major issuers has steadily ticked up since the 2010s, going from $23 at the end of 2010 to $32 in 2022, according to the CFPB. WalletHub, which tracks financial data, found the average late fee in 2025 to be $30.50, with the maximum $41. A September 2023 Consumer Reports study estimated that 1 in 5 American adults, or about 52 million people, paid a credit card late fee in the previous year. People with lower incomes pay proportionately bigger fees, according to the CFPB, with the highest burden falling on communities of color and those living paycheck to paycheck. Enrolling in auto-pay for your credit cards can help you avoid making late payments, and there are some credit cards that don't charge late fees at all (though it's important to note that these cards may have other fee or penalty structures, or higher interest rates.) Citi Simplicity and the Apple card do not currently charge late fees, and Discover offers a card that will automatically waive the first late fee. It's also possible to appeal credit card late fees charged by your credit card company by calling them directly. The companies will often reverse the fees, especially if it's your first late payment. You may also want to consider making payments on your credit card balances during the month. That means you'll have paid more of the balance by the time the amount comes due, and keeping your balance low relative to your credit limit can improve your credit score. If you're having trouble making ends meet, you can ask your credit issuers about hardship programs. These are typically available to people affected by job loss, illness or medical conditions, natural disasters, or other emergencies. Concerned that credit card companies were building a business model based on high penalties, Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), which banned the companies from charging excessive late fees and established clearer disclosures and consumer protections. In 2010, the Federal Reserve Board of Governors voted to issue a regulation implementing the CARD Act, which said that banks could only charge fees to recover costs associated with late payment. However, the rule included an 'immunity provision' that let some banks charge $25 for the first late payment and $35 for subsequent late payments, adjusted for inflation each year. Those amounts subsequently grew to $30 and $41. After a review of market data, the CFPB finalized a rule that would have capped late fees at $8 and ended automatic inflation adjustments. Based on records analyzed by the CFPB, a late fee of $8 would be sufficient for card issuers, on average, to cover collection costs incurred as a result of late payments. Industry groups, including the Consumer Bankers Association, American Bankers Association, the U.S. Chamber of Commerce, and others, said they welcomed the court's decision eliminating the cap. The groups said that the rule would have led to higher interest rates and reduced credit access for card holders. The groups also said the rule would have 'reduced important incentives for consumers to manage their finances.' The CFPB has estimated that banks bring in roughly $14 billion in credit card late fees a year. Horacio Méndez, president and CEO of Woodstock Institute, an organization for advancing economic equity, called the ruling a 'devastating blow.' 'By tossing out the CFPB's common-sense rule to cap these predatory late fees — some as high as $41 — a federal judge is putting corporations over the lives of everyday consumers," he said. 'The CFPB's rule was borne out of clear evidence: the credit card industry was using inflated late fees as a profit engine, forcing families with the least financial cushion to pay.' Méndez said that while consumers have come to expect fees for services, those fees needn't be punitive to be effective. ___ The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
Yahoo
07-03-2025
- Business
- Yahoo
DOGE's secrecy to be tested in court with sworn testimony, depositions
As the Department of Government Efficiency rapidly moves to reshape the federal government, several groups challenging DOGE in court are attempting to determine how Elon Musk's budget-slashers were able to rapidly entrench themselves in at least 15 agencies. Over the coming week, federal judges have ordered key Trump administration officials to testify about mass firings and the dismantling of key agencies, while DOGE representatives will likely have to turn over evidence in dozens of cases and participate in a sworn deposition for at least one case. The legal challenges materializing against DOGE could present an existential challenge for the group, whose effectiveness has in part stemmed from its ability to move quickly and make massive changes without the normal oversight. MORE: DOGE says it's saved $105 billion, though it's backtracked on some of its earlier claims While Musk and Trump have touted DOGE's transparency -- including on DOGE's website, where it lists recently canceled contracts -- the plaintiffs challenging the group have argued that the group has relied on secrecy to hide tactics that violate federal law. "[T]he entity has worked in the shadows -- a cadre of largely unidentified actors, whose status as government employees is unclear, controlling major government functions with no oversight," one lawsuit alleged. That secrecy has also made it harder for nonprofits or federal unions to successfully block DOGE in court, with many plaintiffs relying on media reporting -- rather than documentary evidence -- to prove the harms DOGE has allegedly caused. "The court can't act based on the media reports. We can't do that," one federal judge said in a case about the constitutionality of Musk's power. "The things that I'm hearing are concerning indeed and troubling indeed, but I have to have a record, and I have to make a finding the facts before I issue something." But that might begin to change as the cases against DOGE progress and plaintiffs are entitled to receive discovery -- i.e., the exchange of evidence -- relevant to key allegations. At least one federal judge has ordered a DOGE representative to sit for a sworn deposition about the group's access to the federal government's sensitive data. A federal judge in Washington, D.C, was scheduled Friday afternoon to consider what kind of regulations will govern the transparency behind DOGE after the group argued it shouldn't be subject to the Freedom of Information Act, and next week might provide some of the first sworn testimony about Trump's effort to rapidly reduce the size of government since retaking office. On Monday, a federal judge in Washington is holding a hearing at which the acting chief operating officer of the Consumer Finance Protection Bureau has been ordered to testify about the ongoing dismantling of the agency, and a separate judge in California on Thursday is requiring the acting director of the Office of Personnel Management to testify under oath about how the Trump administration allegedly ordered the mass firing of probationary employees. "We will prove in this case that remarkably, and I do not say this lightly, your honor, Acting Director [Charles] Ezell is not telling the truth to this court," a lawyer challenging the mass firings alleged, prompting the judge overseeing the case to order Ezell to testify in person. "We're going to have Ezell come out here and he's going to be under oath right up there and these lawyers are going to quiz him," U.S. District Judge William Alsup said. MORE: Lawyers use Trump's speech before Congress in suit against DOGE During a court hearing on Thursday about Ezell's testimony, lawyers with the Department of Justice said the administration is considering making Ezell unavailable for testimony despite the court's order, citing logistical concerns and their potential appeal of the decision. Lawyers for the plaintiffs called the move a clear defiance of a court order and a delay tactic. "No final decision had been made," a DOJ lawyer told Judge Alsup, suggesting the final decision would be made in Washington. The Trump administration has already begun its appeal in more than a dozen cases challenging Trump's executive actions, and two adverse rulings have already reached the Supreme Court. DOGE's secrecy to be tested in court with sworn testimony, depositions originally appeared on
USA Today
17-02-2025
- Business
- USA Today
The Daily Money: What's next for CFPB?
Good morning. This is Betty Lin-Fisher with The Daily Money. The Trump administration has agreed to pause layoffs and funding cuts at the Consumer Finance Protection Bureau, or CFPB. But what is the future of the federal agency responsible for cracking down on "junk" fees and answering consumer complaints in the finance industry? The high-profile federal watchdog agency has been Trump's target for shutdown in the early days of his second presidency. Being a digital nomad is not all its cracked up to be Could there really be a downside to traveling the world and working as a digital nomad? Actually, yes, reports my colleague, Kathleen Wong. There can be Internet issues, work-life balance challenges and difficulty finding accommodations, among other things, all building up stress. There are pro's and con's to weigh. 📰 Consumer stories you shouldn't miss 📰 🍔 Today's Menu 🍔 Krispy Kreme and Hulu have teamed up on a new doughnut collection with flavors inspired by popular movie theater snacks. The collection, available for a limited time starting today, has four new doughnut flavors, including Caramel Popcorn Doughnut and Candy Double Feature Doughnut, which has white icing, topped with milk chocolate candy pieces and mini milk chocolate chips, drizzled with chocolate flavored icing. About The Daily Money Each weekday, The Daily Money delivers the best consumer and financial news from USA TODAY, breaking down complex events, providing the TLDR version, and explaining how everything from Fed rate changes to bankruptcies impacts you.
Yahoo
14-02-2025
- Business
- Yahoo
CFPB leadership agrees to hold off on mass firings while lawsuit proceeds
Government lawyers representing the acting director of the Consumer Finance Protection Bureau reached an agreement during a court conference Friday to temporarily hold off on firing CFPB employees en masse while a lawsuit challenging the dismantling of the agency makes its way through court. The consent order blocks the CFPB from firing employees for reasons unrelated to their work performance or conduct, and prevents the Trump administration from trying to redirect funding away from the agency tasked with protecting consumers. The agreement also prevents the Trump administration from destroying or altering sensitive records maintained by the CFPB. MORE: Democrats vow to fight shutdown of consumer watchdog agency U.S. District Judge Amy Berman Jackson said she will consider issuing a longer-term preliminary injunction during a court hearing on March 3. The ruling came after the CFPB had fired its probationary workers as part of the Trump administration's government-wide layoffs, with much of the remaining staff expecting to be fired next. A group of federal unions that is suing the Trump administration over its dismantling of the agency alleged in a court filing Thursday that Russell Vought, newly installed as acting director, planned to purge over 95% of the agency's workforce as soon as Friday. The plaintiffs who brought the lawsuit asked Berman to impose a temporary order to block the dismantling the CFPB, which they argue could have sweeping consequences for American consumers. The firings, part of President Donald Trump's campaign pledge to slash the federal government, would gut the 1,700-employee consumer watchdog agency, according to three CFPB employees who spoke to ABC News on the condition that they not to be identified out of fear of retribution. "All term employees were fired tonight, and it looks like the rest of us will be fired tomorrow but for cause rather than via a RIF [reduction in force] which means no severance I think," one agency lawyer wrote in a message to ABC News. "3 of my 4 teammates were canned," another employee wrote. "Just me and my supervisor left, the only permanent employees." Employees were told not to work or go into the agency's Washington, D.C., headquarters this week, and several employees said their credentials did not allow access into satellite offices in San Francisco, Chicago, New York and Atlanta on Thursday, two of the employees said. The CFPB was created in 2011 as a response to the 2008 financial crisis which was caused by massive investments based on subprime or risky mortgages, causing a global financial crisis amid a lack of oversight. The employees ABC News spoke with said the firings will leave all Americans more vulnerable. MORE: Trump administration begins mass layoffs across multiple federal agencies: Sources "I'm worried about everybody. What about the people who use our complaints to get their loans straightened out or their bank accounts unfrozen? They've already tried calling the company and gotten nowhere," an employee wrote. "Who will help them now? Will the companies get bold and screw over their customers without our robust oversight?" "It's going to be a nightmare," the employee said. "I'm concerned for every consumer out there," another employee told ABC News. "There's a lot of fintech companies and I don't know what's going to happen if we don't have purview over that." The employee said she was also concerned about X CEO Elon Musk, the head of the Department of Government Efficiency, having access to the CFPB's massive database, which contains information about companies that Musk's planned "X Money" online payment service would compete with. The agency would also be responsible for regulating the X Money platform. The employee also said she was alarmed at the way CFPB employees were being characterized by the Trump administration. "A lot of people are actively giving back and serving" the community, she said of her fellow CFPB employees. "Some donate from our paychecks -- donations for nonprofits, volunteering, donating, giving back to our community, fostering dogs, they're involved in a lot of causes. I work with remarkable people who never stop serving." "Me personally, this was my dream job in college and I can't even believe i got in, it was so competitive," wrote the employee, who said she is in her fourth year at the agency after having worked in the private sector, so her pension will not vest. "It's the dream job, what's next? I'm too young to retire, I believe in the work we did, everyone I work with felt the same." CFPB leadership agrees to hold off on mass firings while lawsuit proceeds originally appeared on
