More Thoughts on the CFPB Puzzle: President Trump Can Select Someone to Run the CFPB Only if the Senate Has an Opportunity to Confirm

by Nina Mendelson | November 28, 2017

Originally posted at Notice & Comment, a blog of the Yale Journal on Regulation and the American Bar Association Section of Administrative Law & Regulatory Practice. Reprinted with permission.

On Friday, November 24, Consumer Financial Protection Bureau Director Richard Cordray named Leandra English, the longtime CFPB Chief of Staff, to the post of Deputy Director. Based on legislation specific to the CFPB, that put her in a position to serve as Acting Director upon his departure. Cordray then resigned. A few hours after Cordray resigned, the White House announced that President Trump had selected OMB Director Mick Mulvaney to serve as CFPB Acting Director, invoking the President’s powers under the more general Federal Vacancies Reform Act. Unfortunately, President Trump’s actions may result in needless—and illegal—chaos at the CFPB. The President surely retains the power to choose the next CFPB Director, but only by nominating a candidate that the Senate confirms.

Under the 2010 Dodd-Frank legislation, which authorized the creation of the CFPB, the Deputy Director is to serve as Acting Director in the absence of a director. Dodd-Frank’s statutory language is specific and mandatory. The Deputy Director—presently Leandra English—“shall serve as acting Director in the absence or unavailability of the Director.” 12 USC 5491(b)(5). But the Office of Legal Counsel has suggested that a more general statute, the Federal Vacancies Reform Act of 1998, also applies. That statute authorizes the “first assistant” to the office to act (also Deputy ...

With Final Forced Arbitration Rule, the CFPB Continues to Advance the Public Interest

by Thomas McGarity | July 13, 2017
Earlier this week, the Consumer Financial Protection Bureau (CFPB) took decisive action to protect hardworking people who are cheated by banks or other financial institutions. Specifically, the federal agency issued a rule limiting what are known as "forced arbitration" agreements in the contracts we must all sign when we open a bank account or purchase certain kinds of financial products and services. Last year, scholars and staff at the Center for Progressive Reform authored a report that supported CFPB's efforts ...

It's Time to Give Customers of Financial Services and Products Their Day in Court

by James Goodwin | October 10, 2016
Originally published by the Oxford Business Law Blog. Reprinted with permission. Forced arbitration clauses are now almost impossible to avoid in consumer contracts for financial services and products ranging from credit cards to private student loans. Despite their ubiquity, most consumers aren't even aware of them. This is because companies frequently bury them deep in the lengthy fine print of their contracts, which they then offer to consumers on a 'take it or leave it' basis. Forced arbitration clauses warrant ...

Comments from CPR: Forced Arbitration Proposal Is Strong but Should Be Stronger

by James Goodwin | August 23, 2016
Yesterday, several CPR Member Scholars and staff formally submitted comments on the Consumer Financial Protection Bureau's (CFPB) proposed rule to limit the use of forced arbitration agreements in consumer contracts for financial products like credit cards and bank accounts.  CPR Member Scholars and staff have been tracking this rulemaking for over a year and in May 2016 published a report that assessed several key issues shortly before the CFPB released its proposal. In particular, our report evaluated the CFPB's preliminary ...

Airlines' Bait-and-Switch Scheduling

by David Driesen | June 02, 2016
During the last few years, airlines have increased their reliance on "bait-and-switch" scheduling. They induce travelers to choose their airline based on advertised routes and schedules. They know that especially good routes are valuable and generally charge more for a good route than a bad one. Long after travelers have taken the bait, often paying more than the lowest available price to avoid delay-prone airports, long layovers, and multiple stops, the airlines simply switch around the schedule. While many of ...

New Paper: Americans Hurt By Forced Arbitration Agreements with Big Banks, Credit Card Companies

by Brian Gumm | May 04, 2016
NEWS RELEASE: New Paper Shows Americans Hurt By Forced Arbitration Agreements with Big Banks, Credit Card Companies Forthcoming Rule from Consumer Financial Protection Bureau Offers Some Solutions, but More Can Be Done to Protect Consumers Opening a checking account or using a credit card is an essential, everyday activity for many Americans, but most financial services are governed by pages of fine print, much of which is difficult to navigate and understand. As a new paper from the Center for ...

Gag Clauses Chill Consumer Rights

by Mollie Rosenzweig | October 08, 2015
Modern-day snake oil peddlers may have found a way to keep consumers quiet about their ineffective products: non-disparagement clauses, also known as gag clauses. These clauses, slipped into the fine print of form contracts, can restrict a consumer’s ability to post negative reviews of a product online. Non-disparagement clauses, which can vary in scope, generally prevent consumers from publicizing negative reviews of a product or company. This restriction includes comments made on online forums like Yelp or even complaints to ...

Steinzor Testifies Today on Proposed Giveaway to Energy Industry

by Matthew Freeman | April 12, 2013
This morning, CPR President Rena Steinzor will testify before the House Energy and Commerce Committee about the proposed Energy Consumers Relief Act of 2013 (ECRA), yet another in a series of bills from House Republicans aimed at blocking federal regulatory agencies from fully implementing the nation's health and safety laws — in this case such landmark legislation as the Clean Air Act, and any other law enforced by the Environmental Protection Agency that is in any sense "energy-related." Here's the ...

CPSC's First Year Under Obama: An Agency Still Finding Its Feet

by James Goodwin | January 15, 2010
This post is second in a series on the new CPR report Obama’s Regulators: A First-Year Report Card. It’s only fair to note that when President Obama assumed office in January of 2009, he inherited a slate of dysfunctional protector agencies. Perhaps none were more dysfunctional than the Consumer Product Safety Commission (CPSC)—the tiny agency charged with protecting all Americans from literally tens of thousands of different kinds of dangerous products, everything from backyard barbecues and electric drills to swimming ...

Amendment on Consumer Financial Protection Could Block Citizens From Taking Banks to Court

by Thomas McGarity | October 13, 2009
The debate over whether Congress should create a Consumer Financial Protection Agency, as recommended by President Obama, has recently taken a disturbing turn. Apparently, some congressional Democrats have been receptive to complaints from the big national banks that the current bill does not preempt state laws and regulations that are more stringent than the regulations that the new agency will promulgate. National banks have traditionally been protected from state regulation by virtue of express preemption clauses in the federal statutes ...

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