Latest news with #U.S.ConsumerFinancialProtectionBureau
Yahoo
2 days ago
- Business
- Yahoo
Top CFPB enforcement official to resign, citing 'devastating' shifts under Trump
By Douglas Gillison (Reuters) -The top remaining enforcement official at the U.S. Consumer Financial Protection Bureau has tendered her resignation, saying the White House's overhaul of the agency had made her position untenable, according to an email seen by Reuters. Acting Enforcement Director Cara Petersen, who has served at the agency since its creation nearly 15 years ago, said that current leadership under President Donald Trump "has no intention to enforce the law in any meaningful way." "I have served under every director and acting director in the bureau's history and never before have I seen the ability to perform our core mission so under attack," Petersen wrote in an email. "It has been devastating to see the bureau's enforcement function being dismantled through thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements that let wrongdoers off the hook." Petersen's departure comes four months after the agency's enforcement and supervision chiefs also resigned amid efforts by President Donald Trump to dismantle the CFPB. An agency spokesperson and Petersen did not immediately respond to requests for comment. In addition to seeking to cut the CFPB's workforce by about 90 percent, acting Director Russell Vought and chief legal officer Mark Paoletta have said they will slash agency enforcement and supervision and have dropped major CFPB enforcement cases en masse, including against Capital One and Walmart. The agency has even revised some cases already settled under the prior administration. The dramatic changes come as Republicans have complained for years the CFPB, created in the aftermath of the global financial crisis, is too powerful and lacks oversight. Democrats and agency backers contend it plays a critical role policing financial markets on behalf of consumers. "While I wish you all the best, I worry for American consumers," said Petersen in her email. A federal appeals court in Washington has yet to decide on the Trump administration's effort to undo a court injunction blocking the agency from firing most agency staff.
Yahoo
16-05-2025
- Business
- Yahoo
Appeals judges prod Trump admin, union over CFPB wind-down
By Douglas Gillison (Reuters) -Federal appeals court judges in Washington wrestled Friday with the extent to which they could instruct the Trump administration to operate the government's consumer finance watchdog agency, which the White House this year has sought to decimate if not shut down entirely. The three-judge panel is considering a government appeal to reverse a March lower-court ruling that temporarily blocked plans to fire virtually all workers at the U.S. Consumer Financial Protection Bureau. Lawyers for a worker union originally in February sued to halt efforts to dismantle the agency, asking the courts to prevent the administration from ordering CFPB employees to not perform work required by law. Though it was unclear from their questions on Friday how the judges intended to rule, the outcome is likely to decide the future of the CFPB, a watchdog created after the global financial crisis to police consumer financial products and protect American consumers against predatory business practices. Republican President Donald Trump and business moguls like billionaire Elon Musk have accused the agency of politicized enforcement and said it should be eliminated. Democrats, like Senator Elizabeth Warren, who championed the creation of the CFPB, criticized Republican attempts to weaken the agency. Earlier this year, Warren said no one other than Congress could dismantle the agency that has paid $21 billion in financial restitution to thousands of Americans. Deputy Assistant Attorney General Eric McArthur told the court that, while the administration intended to keep the CFPB operating in some form as required by law, it was within the government's power "to radically downsize this agency, to strip it down, as it were, to the statutory studs." "That is a lawful policy," he said, and "not for the courts to review." So far, the appeals court has differed to a degree with the Trump administration's actions at the CFPB. After initially finding that the lower court's injunction went too far, and allowing targeted staff reductions, the panel then reversed course after the CFPB again attempted mass dismissals last month. Jennifer Bennett, a lawyer arguing for a CFPB workers union and consumer advocacy organizations, rejected the government's argument that officials had made no final decision to close the agency and so the matter could not be reviewed under federal laws that control government actions. Bennett pointed to emails and testimony she said showed the administration had decided to shut down the CFPB -- in one case telling employees to return to work but separately issuing text messages with the opposite instruction -- and was only stopped in its tracks by the courts. "It cannot be that, if an agency is in the midst of executing a final agency action when the district court intervenes, that this is somehow no longer final," she said. U.S. Circuit Judge Gregory Katsas, whom Trump appointed to the bench in 2017, said the case could put the courts in the difficult position of deciding what specific actions showed that an agency was meeting its legal requirements, such as maintaining a consumer complaint hotline. "The court has to ask itself such imponderables as how many employees can the agency [dismiss] and yet ensure that the hotline gets answered," he said. It was unclear when the appeals court would issue a decision.
Yahoo
16-05-2025
- Business
- Yahoo
Appeals judges prod Trump admin, union over CFPB wind-down
By Douglas Gillison (Reuters) -Federal appeals court judges in Washington wrestled Friday with the extent to which they could instruct the Trump administration to operate the government's consumer finance watchdog agency, which the White House this year has sought to decimate if not shut down entirely. The three-judge panel is considering a government appeal to reverse a March lower-court ruling that temporarily blocked plans to fire virtually all workers at the U.S. Consumer Financial Protection Bureau. Lawyers for a worker union originally in February sued to halt efforts to dismantle the agency, asking the courts to prevent the administration from ordering CFPB employees to not perform work required by law. Though it was unclear from their questions on Friday how the judges intended to rule, the outcome is likely to decide the future of the CFPB, a watchdog created after the global financial crisis to police consumer financial products and protect American consumers against predatory business practices. Republican President Donald Trump and business moguls like billionaire Elon Musk have accused the agency of politicized enforcement and said it should be eliminated. Democrats, like Senator Elizabeth Warren, who championed the creation of the CFPB, criticized Republican attempts to weaken the agency. Earlier this year, Warren said no one other than Congress could dismantle the agency that has paid $21 billion in financial restitution to thousands of Americans. Deputy Assistant Attorney General Eric McArthur told the court that, while the administration intended to keep the CFPB operating in some form as required by law, it was within the government's power "to radically downsize this agency, to strip it down, as it were, to the statutory studs." "That is a lawful policy," he said, and "not for the courts to review." So far, the appeals court has differed to a degree with the Trump administration's actions at the CFPB. After initially finding that the lower court's injunction went too far, and allowing targeted staff reductions, the panel then reversed course after the CFPB again attempted mass dismissals last month. Jennifer Bennett, a lawyer arguing for a CFPB workers union and consumer advocacy organizations, rejected the government's argument that officials had made no final decision to close the agency and so the matter could not be reviewed under federal laws that control government actions. Bennett pointed to emails and testimony she said showed the administration had decided to shut down the CFPB -- in one case telling employees to return to work but separately issuing text messages with the opposite instruction -- and was only stopped in its tracks by the courts. "It cannot be that, if an agency is in the midst of executing a final agency action when the district court intervenes, that this is somehow no longer final," she said. U.S. Circuit Judge Gregory Katsas, whom Trump appointed to the bench in 2017, said the case could put the courts in the difficult position of deciding what specific actions showed that an agency was meeting its legal requirements, such as maintaining a consumer complaint hotline. "The court has to ask itself such imponderables as how many employees can the agency [dismiss] and yet ensure that the hotline gets answered," he said. It was unclear when the appeals court would issue a decision. 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
Miami Herald
16-05-2025
- Automotive
- Miami Herald
Feds Drop $60 Million Penalty Against This Automaker
The U.S. Consumer Financial Protection Bureau (CFPB) has canceled a 2023 settlement with the financing arm of Toyota that had ordered the automaker's division to pay a $12 million penalty to the federal government and $48 million to car buyers allegedly targeted by illegal lending practices since 2016. The allegations revolve around reports of Toyota illegally steering thousands of customers into expensive and unnecessary product bundles that many consumers were misled into believing were mandatory. According to the CFPB, these product bundles, which added $700 to $2,500 to each loan, included Credit Life and Accidental Health (CLAH) coverage paying a loan's remaining balance if the borrower passes away or becomes disabled, and Guaranteed Asset Protection (GAP), which waives some of the customer's loan balance if their vehicle is totaled, but they still owe on the loan even with car insurance. During their investigation, the CFPB determined that Toyota Motor Credit made it unreasonably difficult for consumers to cancel the unwanted add-ons after customer complaints claiming the automaker forced the product bundles without their consent. Additionally, the CFPB found that Toyota's financing arm failed "to ensure consumers received refunds of unearned GAP and CLAH premiums when they paid off their loans early or ended lease agreements early" and didn't "provide accurate refunds to consumers who canceled their vehicle service agreements as a result of flawed system logic." Lastly, the CFPB determined that Toyota's finance division hurt victims' credit by falsely reporting customer accounts as delinquent, even though consumers had already returned their vehicles, and failing to correct the information submitted to credit agencies promptly. "Toyota's lending arm illegally withheld refunds, made borrowers run through obstacle courses to cancel unwanted services, and tarnished their credit reports," former CFPB director Rohit Chopra said, according to Road & Track. The decision to drop the penalty may have something to do with the current administration's recent actions. When asked whether he intended to "totally eliminate" the CFPB on February 10, President Trump said "that was a very important thing to get rid of," according to Reuters. The current acting director of the CFPB, Russ Vought, who was appointed to the bureau by President Trump on February 7, sent an email to CFPB staff on February 8 directing employees not to issue any proposed or formal rules, stop pending investigations, not open new investigations, halt stakeholder engagements, and refrain from issuing public communications, according to CBS. Vought's email occurred after Elon Musk's Department of Government Efficiency (DOGE) thoroughly reviewed the CFPB. In late February, lawyers for President Trump's administration denied that the White House intends to dismantle the CFPB. However, on April 15, the Trump administration sent 1,500 of the CFPB's 1700 total staff members layoff notices before a federal judge temporarily blocked the move on April 18, which remains in effect. The Wall Street Journal reports that Vought has served as Elon Musk's lower-profile DOGE partner. Vincent Bray, Senior Manager of Corporate Communications at Toyota Financial Services, told Autoblog in response to the cancelled settlement: "Toyota Motor Credit Corporation (TMCC) appreciates the CFPB's action, and we look forward to maintaining a good working relationship with the bureau. We remain committed to doing the right things for our customers and following applicable federal and state laws in our sales, customer service, and administrative practices. We will continue to enhance our practices to deliver the best possible customer experiences." The CFPB's decision to reverse its 2023 settlement order against Toyota's financing arm reflects how President Trump's policies are affecting the automotive industry and its consumers beyond the ripple effects of tariffs. Additionally, the CFPB's cancellation of the settlement, which occurred on Monday, comes at a time when much of the bureau's operations are in flux, raising more questions than answers regarding its reversal. The CFPB did not provide a reason for the settlement's cancellation. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Reuters
14-05-2025
- Business
- Reuters
Trump administration scraps Biden-era plan to limit sale of Americans' personal data
May 14 (Reuters) - The U.S. Consumer Financial Protection Bureau is scrapping a proposal issued under former President Joe Biden that would have sharply limited the sale of Americans' private information by "data brokers," according to a Federal Register notice issued Wednesday. The agency also yanked proposals that sought to extend consumer protections to the use of new digital payment technologies including cryptocurrency, and that would have prohibited certain terms in the fine print in consumer finance products. In a statement, Consumer Reports said the withdrawal of the data broker proposal would leave consumers "vulnerable to scams and identity theft." President Donald Trump's administration has moved this year to decimate the CFPB, initially seeking to shut it down entirely and subsequently saying it can meet its legal obligations with about 10% of its current staff. Efforts to fire large amounts of staff are currently on hold as federal courts consider the matter. Senior officials in recent days have continued undoing much of the prior administration's work in regulation and oversight. The agency last week withdrew scores of guidance documents issued across administrations since 2011. In proposing the limits on data brokers in January, former CFPB Director Rohit Chopra said the sale of Americans' private information to data brokers was a "staggering" problem that also jeopardized national security by putting government officials' privacy at risk. The CFPB did not immediately respond to a request for comment. However, in a Federal Register notice, Russell Vought, the current acting CFPB director, said the proposal no longer aligned with the bureau's changed policy objectives and its interpretation of the Fair Credit Reporting Act. "Further, commenters raised numerous concerns related to this proposed rule that the Bureau believes require careful consideration before proceeding with a final rule," he said. These included whether the proposal was at odds with federal law.
