A law professor at the University of Utah has gone back and analyzed what the Financial Choice Act would have done to the actions of the Consumer Financial Protection Bureau had the bill been law dating back to the start of the federal agency.
The objective of the report is to provide analysis of what effects the bill would have on the CFPB going forward by looking at what it would have done to the agency’s activities from the beginning of its existence.
For example, based on the analysis, 41% of cases against debt collectors would have been eliminated and 97.4% of cases against collectors would have been either eliminated or seriously weakened.
The Financial Choice Act is a bill proposed by Rep. Jeb Hensarling [R-Texas] that would eliminate the supervisory authority of the CFPB and repeal the ability of the CFPB to enforce “unfair, deceptive, or abusive acts or practices (UDAAP)” in consumer finance, among other changes.
The report concludes that enacting the Financial Choice Act into law would “seriously weaken” the CFPB’s enforcement activities.
More than 93% of the CFPB’s enforcement actions have included at least one UDAAP claim in them, according to the report.
Debt collection has been the source of 39 enforcement actions from the CFPB since 2012, making it the second-most popular category after mortgages. Almost $6 billion of the $7 billion in collection-related enforcement fines and forgiveness would not have been assessed if the Financial Choice Act had been in effect since 2012. And $100 million of the $173 million in civil penalties would not have been enforced.
From the report, a copy of which can be downloaded here:
Between 2012 and 2016, the CFPB’s enforcement efforts generated $10.5 billion in consumer relief –accounting for 93 percent of all compensation—in cases that included a deceptive-practices claim. Had the Choice Act been in effect, the CFPB would have been powerless to stop the deception of American consumers by financial corporations within its jurisdiction. This change alone would have eliminated or seriously weakened the vast majority of CFPB cases.
