Resurrection of CFPB Not That "Curious"

POLITICO reports on the "curious" resurgence of the Consumer Financial Protection Bureau under the Trump Administration. I wouldn't exactly call it curious; if you want to exert executive power, you need the administrative mechanism to do so. Go figure.

The rhetoric defining the CFPB has spanned the gamut, from "critical enforcement tool in protecting consumers" all the way to "unaccountable pillar of the administrative state." But as both parties have now discovered, the CFPB is a useful vessel for populist initiatives, too: the overwhelmingly bipartisan ROAD to Housing Act specifically tasks the CFPB with studying loan-originator pay and fee caps in small-dollar mortgage access. 

In the "Schoolhouse Rock" version of regulatory law, there is a procedural due process element of promulgating rules. The proposed rule is supposed to be within the remit of the authorizing law, and there is a notice and comment period before the final rule is issued. Of course, that's really messy and may get in the way of preferred outcomes.

There's a fair basis to the criticism of the "regulation by enforcement" posture the CFPB took during the Cordray years. Under the broad ambit of consumer protection, the Bureau pursued non-bank lenders for violations that were not specified in law and heretofore had not been violations.

The Trump CFPB's Enforcement Guidelines explicitly promised not to act this way. What remains to be seen is whether guidance letters and focused enforcement - which is where it looks like things are headed - produce a result that is materially different.

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