While there haven’t necessarily been any major announcements related to the Consumer Financial Protection Bureau in the past few days — I guess even they like to take time off and celebrate a long holiday weekend — there have been some minor developments that are worth mentioning, including names of who might be the new director of the Bureau, as well as further withdrawals from regulatory and enforcement actions.
CFPB Dismisses Remaining Claims Against Lease-to-Own Company
The CFPB yesterday filed a notice that it was voluntarily dismissing an enforcement action it started nearly two years ago against Snap Finance, which was accused making threats to take actions against consumers when collecting on delinquent accounts that it did not intend to take and not having policies and procedures concerning the accuracy of information it was furnishing to the credit reporting agencies, among other allegations.
A District Court judge had previously dismissed all but the Fair Credit Reporting Act claims against Snap.
This marks the latest in a string of enforcement actions that the Bureau has abandoned under Acting Director Russell Vought.
CFPB to Withdraw Open Banking Rule Amid Legal Dispute
The CFPB also announced yesterday that it will withdraw its 2024 open banking rule, which aimed to make it easier for consumers to move their financial accounts between institutions. This decision follows a legal challenge from several banking groups which argued that the rule was overly burdensome and beyond the CFPB’s authority.
In a filing to a federal court, CFPB Chief Legal Officer Mark Paoletta stated that the Bureau had determined the rule to be “unlawful” and would be vacated. The rule was intended to help consumers access their financial data more easily and transfer accounts, but the banking groups contested it on the grounds that it imposed significant compliance costs, without addressing concerns over data security, fraud, and the liability issues associated with the sharing of consumer data.
The current status of the rule remains in effect until a federal judge issues a decision, after which further legal proceedings could unfold.
Report Identifies Potential Successors to Lead Bureau
A published report has identified a pair of potential candidates who could be nominated to be the next director of the CFPB, saying that the White House has assembled a short list of names.
The two names mentioned in the report are Mark Calabria, the former director of the Federal Housing Finance Agency who is currently assigned to the CFPB through the Office of Management and Budget, and Rodney Hood, the acting Comptroller of the Currency.
Russell Vought has been the Bureau’s Acting Director since February, but his term is due to expire later this year under the Federal Vacancies Reform Act. The report did note that Jonathan McKernan, who was nominated to be the Director of the CFPB before being hired for a role at the Treasury Department, could still be named the director, as well.
