An assistant professor at the University of Montana law school has come out with a report criticizing the Consumer Financial Protection Bureau’s efforts to protect consumers during the COVID-19 pandemic, including not protecting consumers from debt collectors that have violated state laws and prohibitions that have been enacted in response to the pandemic.
The report — Is the CFPB Still on the Beat? The CFPB’s (Non)Response to the COVID-19 Pandemic — written by Craig Cowie, was published in the Montana Law Review. It chastises the CFPB for not pivoting from its traditional enforcement strategy and adopting a strategy that allows for enforcement actions to be investigated and adjudicated more rapidly.
“More than ten months into a historic pandemic, many regulators have taken actions directed at abuses arising from the crisis, but the CFPB — the federal agency created specifically to protect consumers in direct response to the last economic crisis — had not filed a single enforcement action under Director Kraninger regarding unlawful conduct related to the pandemic,” Cowie writes. “Worse, the cases it did file generally have been smaller: less consumer harm, lower amounts of consumer redress, and lower penalties.”
Cowie points out that it is not too late for the CFPB to alter its enforcement strategy and show the public that it is “still on the beat during the crisis.”
Cowie makes several recommendations detailing the types of enforcement activity that the CFPB should be taking, including bringing faster enforcement actions, issuing guidance on assessing unfairness during the pandemic, and bringing actions against collection efforts that violate state pandemic laws.
Taking such actions against collectors has “several benefits,” Cowie said, including protecting vulnerable consumers and sending a “strong signal that such unlawful collections activity will be prosecuted.” Among the actions that the CFPB should be on the lookout for are: violating orders prohibiting taking pandemic-relief funds, violating orders prohibiting foreclosures, repossessions, and other collection of debt.
