Latest news with #MarkPaoletta
E&E News
04-06-2025
- Business
- E&E News
White House directs DOT to ignore GAO ruling on EV funding pause
The White House's Office of Management and Budget told the Transportation Department on Tuesday to disregard a ruling by the Government Accountability Office that the Trump administration violated the law by freezing electric vehicle funding. Mark Paoletta, OMB's general counsel, in a letter to DOT called the congressional watchdog's ruling 'wrong and legally indefensible.' The letter responds to the GAO's report that found DOT broke the law by withholding money already approved by Congress for the $5 billion National Electric Vehicle Infrastructure program, which was funded by the 2021 bipartisan infrastructure law. Advertisement Paoletta contends DOT's recording of obligations for the NEVI program complied with the statutory language that created the program and was aligned with DOT past practices regarding other highway formula programs. He also argues DOT didn't violate the Impoundment Control Act by rescinding the Biden administration's NEVI program guidance and 'temporarily pausing new obligations until new guidance could be issued.'
Yahoo
28-05-2025
- Business
- Yahoo
CFPB to yank ‘unlawful' open banking rule
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. The Consumer Financial Protection Bureau has determined that a 2024 rule authorizing open banking is 'unlawful' and should be scrapped, 15 years after Congress enacted legislation to make it easier for consumers to switch financial institutions, the agency told a federal court. The bureau plans to vacate the rule as part of a lawsuit in Kentucky, the CFPB's chief legal officer, Mark Paoletta, wrote in a federal court filing Friday. 'After reviewing the Rule and considering the issues that this case presents, Bureau leadership has determined that the Rule is unlawful and should be set aside,' the agency wrote in a status report filing. The Bank Policy Institute, which represents most of the large U.S. banks, said Friday in a press release that the bureau had acknowledged the rule's 'clear legal deficiencies.' But Financial Technology Association CEO Penny Lee in a statement Friday called the CFPB decision 'a handout to Wall Street banks, who are trying to limit competition and debank Americans from digital financial services.' The CFPB passed its final rule in October, drawing an immediate lawsuit from the Bank Policy Institute, the Kentucky Bankers Association and Kentucky-based Forcht Bank. The banking groups argued that the rule, under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, imposed heavy compliance costs and did not address liability issues around fraud and misuse of consumers' financial data. The plaintiffs also said the bureau had exceeded its authority under the act in formulating the rule. In late March, U.S. District Court Judge Danny Reeves had stayed the lawsuit for 60 days to allow the bureau – under the leadership of acting director Russell Vought – to review its position on the matter. The agency's move to vacate the rule means 'years of wasted work from banks and fintechs that could have been saved by amending rather than abandoning the rule,' Todd Baker, a senior fellow at the Richman Center for Business, Law & Public Policy at Columbia University, wrote Saturday on LinkedIn. FTA members and other fintechs had hoped that the bureau would choose to revise the rule, addressing areas of contention, rather than vacate it entirely. On May 14, Reeves ruled that the FTA can intervene to defend the lawsuit, finding that its members' interests were not adequately protected by either party in the litigation. The CFPB's move to vacate the rule could make the intervention moot, however. The agency has sought to reduce about 90% of its pre-Trump staff of around 2,000 employees and Vought has requested that Congress slash the bureau's budget as part of a budget bill House Republicans passed last week. The staff cuts remain mired in federal litigation. The bureau said it intends to file for summary judgment in the case by Friday, the same date as the plaintiffs' motion for summary judgment is due. An FTA spokeswoman said Monday the association will then respond to the motions and that the rule remains in effect until Reeves issues a decision. Last week, the Financial Data & Technology Association, which represents about three dozen fintechs, wrote to Vought urging that the CFPB not dismantle the rule. 'Vacating the existing rule and starting from scratch risks prolonging regulatory uncertainty that could stall market development, stifling innovation in critical digital financial technologies, and emboldening incumbents to entrench their positions and legacy technologies rather than compete,' FDATA North America Executive Director Steve Boms wrote. FDATA and some of its members also convened a conference call on May 19 with reporters to discuss the various problems they anticipate if the agency vacates the rule. One primary issue several speakers cited is the CFPB's ability to craft a new rule – as mandated in the Dodd-Frank law – with a minimal staff under Vought's management. The current open banking rule took the bureau five years to enact, beginning in the first Trump administration. Bloomberg Law reported May 8 that the bureau would seek to vacate the rule, citing multiple sources familiar with the strategy. Recommended Reading CFPB issues final rule on open banking Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
21-05-2025
- Business
- New York Times
Trump Is Turning Our Consumer Watchdog Into a Corporate Protector
The Consumer Financial Protection Bureau is turning into the Corporate Financial Protection Bureau. President Trump's C.F.P.B. has not only ceased to pursue its mandate; it has taken the unprecedented step of unwinding prior victories — even in cases brought during Mr. Trump's first term. These moves, accompanied by the blatant corruption being encouraged by this administration, send a clear message: Lawbreaking is tolerated, and the interests of banks, tech companies and the richest financial companies in the world are paramount. Thanks to Elon Musk's foot soldiers from the so-called Department of Government Efficiency, the bureau's Washington offices have gone dark. While the courts have so far thwarted efforts to lay off nearly all its employees, a vast majority have been sent home in the interim, and many functions of the C.F.P.B., the only federal consumer financial law enforcement agency, have shut down. As of March, the agency's consumer complaint process — which helps Americans resolve problems with their banks, mortgage lenders and student loan servicers — was backlogged with more than 16,000 consumer complaints. There is one part of the organization that is functioning: the fief consisting of the C.F.P.B.'s acting director, Russell Vought, and chief legal officer, Mark Paoletta, its top two Trump appointees. Now the agency is not only handing out what amounts to corporate pardons to the likes of big banks and massive mortgage lenders, but it is also working to reopen already settled cases. Disturbingly, in some cases, the agency is trying to pull back or has pulled back redress and penalties that would have otherwise gone to Americans. Last week the Trump administration, without explanation, quietly terminated a settlement with Toyota Motor Credit. In 2023 the company agreed to pay $60 million, including $48 million in consumer compensation, for preventing car buyers from canceling unwanted products. That effort included sending over 100,000 of them to a Kafkaesque hotline designed to thwart them from canceling, refunding the wrong amounts and tarnishing their credit reports with false information. A few days later, the agency also reduced the penalties faced by Wise, a payment company that was found to have deceived its customers, to about $45,000 from over $2 million. Victories stemming from cases filed in Mr. Trump's first term are also being gutted. In a suit that was filed and litigated in 2017 and continued under President Joe Biden, the C.F.P.B. won a settlement from the National Collegiate Student Loan Trusts, which was charged with collecting on student loans it couldn't prove it owned. When the company's investors objected to the settlement, Mr. Trump's second-term C.F.P.B. initially defended it, only to inexplicably dismiss the case, settlement included, in April. The agency has also asked a court to undo a settlement already paid by a mortgage company that was charged with discriminating against Black borrowers — a case also initiated in the first Trump administration. In virtually all cases, it will not be possible for a court to undo the agency's actions. That means people may never be compensated for the harm they suffered. The Trump administration's role in allowing companies to walk away from settlements they already agreed to has troubling implications. If administrations can simply undo prior settlements, it could be open season for corporate misconduct. In addition to blowing up settlements, the Trump administration has dropped at least 21 enforcement actions that were pending in federal court, many of them against the nation's largest companies. The dismissals include a lawsuit against TransUnion, one of the nation's largest credit reporting companies, accusing it of violating a law enforcement order and using deceptive tricks and manipulative processes on its website to dupe customers into signing up for costly credit-monitoring services. A case was also thrown out against three of the largest banks in the United States — JPMorgan Chase, Wells Fargo and Bank of America — that accused them of rushing the Zelle payment network to market without adopting reasonable fraud-prevention measures, even though they knew consumers were losing hundreds of millions to fraud on the network. In the nearly 14 years that the C.F.P.B. has been in existence, it has returned more than $21 billion to Americans while operating on a budget of a small fraction of that amount. And while C.F.P.B. directors have championed different priorities from administration to administration, the general ethos has always been to fairly enforce the law. In the past four years, the C.F.P.B. took on some of the biggest banks and tech companies. It secured orders requiring companies to pay more than $6.5 billion to people who, for example, were charged illegal junk fees by their banks, service members saddled with predatory loans and older Americans whose mortgage servicer wrongly convinced them they could lose their homes. The agency also imposed on all defendants from 2021 to 2024 around $3.5 billion in penalties to deter lawbreaking — money that goes into a fund for victims of corporate misconduct nationwide. The Trump administration's actions to effectively pardon corporate wrongdoers set a dangerous precedent for the fair administration of law in our country. If corporate agreements with the federal government to change illegal practices and redress victims can be wiped away behind closed doors, then those agreements will soon have no meaning at all.
Yahoo
13-05-2025
- Business
- Yahoo
CFPB rescinds 67 pieces of guidance
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. The Consumer Financial Protection Bureau withdrew dozens of pieces of prior guidance Monday, according to a document published to the Federal Register on Friday. The 67 rescinded items include guidance regarding fair lending, overdraft fees, buy now, pay later firms, earned wage access programs and more, in alignment with an internal memo Chief Legal Officer Mark Paoletta sent last month. '[T]he Bureau is committed to issuing guidance only where that guidance is necessary and would reduce compliance burdens rather than increase them. Historically, the Bureau has released guidance without adequate regard for whether it would increase or decrease compliance burdens and costs. Our policy has changed,' CFPB Acting Director Russ Vought wrote Monday. The affected guidance – some of which dates back to 2011 and some of which was released during President Donald Trump's first term – has been withdrawn to allow the bureau to evaluate whether it's statutorily prescribed and whether it imposes or decreases compliance burdens. '[L]eaving guidance documents in place while the Bureau reviews each interpretation to determine its net effect on compliance burdens … risks imposing unnecessary and illegal compliance burdens in the interim,' Vought wrote. Some of the guidance might be reissued in the future, he wrote. But the enforcement of the guidance against parties that don't conform with the guidance amid this withdrawal won't be prioritized. Guidance that goes beyond the regulation or statute it refers to is 'unlawful,' Vought wrote, 'undermining any reliance interest in retaining that guidance.' The CFPB since late January has scrapped prior rules and guidance, abandoned several legal cases against banks and financial services companies, and its leadership has been fighting in court for the ability to lay off 90% of staffers. At least one lawmaker, Sen. Ted Cruz, R-TX, has introduced legislation to defund the agency. Brady Williams, legal counsel for consumer advocate Better Markets, called the effort to rescind 'virtually all' of the CFPB's prior policy guidance 'an alarming move that threatens the integrity of consumer oversight, erodes transparency, and signals a dangerous capitulation to industry influence.' Among the rescissions is guidance that prevented nonbanks and fintech companies from misrepresenting themselves as insured by the Federal Deposit Insurance Corp., Williams noted in a prepared statement Friday. 'Without clear and enforceable guidance, companies may now feel emboldened to blur legal lines and deceive the public,' he wrote. 'Consumers could soon be depositing their money into risky, uninsured accounts under the false belief that their funds are federally protected. It's a regulatory sleight of hand that puts working families' savings and financial stability overall at risk.' Recommended Reading Former FDIC chair McWilliams to lead law firm Cravath's new D.C. office Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
13-05-2025
- Business
- Bloomberg
CFPB Drops Biden-Era Lawsuit Against Walmart, Fintech Partner
The Consumer Financial Protection Bureau dropped its lawsuit against Walmart Inc. and one of its financial-technology partners, the latest of the agency's Biden-era enforcement actions to be abandoned by President Donald Trump's administration. The CFPB formally moved Tuesday to dismiss the lawsuit, filed in December in the US District Court for the District of Minnesota. The notice of dismissal, signed by the agency's chief legal officer, Mark Paoletta, is the latest in a flurry of abandoned enforcement actions, including lawsuits against Capital One Financial Corp. and JPMorgan Chase & Co.
