By Dan Calabrese ——Bio and Archives--November 15, 2017
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Under Mr. Cordray, the CFPB brought significant changes to consumer finance, a corner of the financial industry that had previously escaped regulatory scrutiny. The agency tightened underwriting standards for mortgages, required more disclosure on credit-card rates and fees, and introduced federal government oversight to payday lending. The agency’s aggressive enforcement actions sometimes went well beyond what were considered conventional practices. Those actions have drawn praise from consumer advocates and Democrats, but put Mr. Cordray and his agency in bitter disagreements with financial companies and Republican lawmakers.
A pending case in a federal appeals court questions the constitutionality of the agency’s independent structure that prevents the president from firing its director without cause. Some Republican lawmakers had called on Mr. Trump to fire Mr. Cordray. The president took no action to do so. The Trump administration has unveiled its vision for the CFPB. In a June report laying out ideas for deregulation for the broad banking sector, the Treasury Department listed a dozen changes at the agency, including eliminating its authority to examine financial firms on a continuing basis and not be able to set its own budget. In the first substantial step to reverse agency policy, Mr. Trump signed a bill passed by Congress in October to overturn its rule that made it easier for consumers to sue banks in groups. The so-called arbitration rule was considered one of the most significant achievements of the CFPB’s rulemaking efforts and had been in several years in the making. The CFPB was established after the crisis as one of the most significant features of the 2010 Dodd-Frank financial-overhaul law, with an aim to tip the balance of power toward consumers away from the financial industry. The agency, a brainchild of Sen. Elizabeth Warren (D., Mass), a fierce critic of Wall Street, has been a subject of attack of Republicans.
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