In the flurry of layoffs since the Trump Administration took office, one affected agency is responsible for overseeing companies like mortgage servicers and Cash App. We sat down with an enforcement lawyer with the Consumer Financial Protection Bureau to find out why she thinks this is one cut that can’t be made.
About two weeks after the new administration was sworn in, Becky Coleman got an email. It said to stop all work. Becky says that’s not totally abnormal with a new presidency.
They pause work while the new administration makes sure that government agencies are in line with their priorities. But to Becky and her colleagues, this time felt different. “Stopping all work whatsoever is very abnormal. They also immediately closed the building.”
This happened about two weeks after Trump named Russell Vought as acting director of the agency. And while all other federal workers were told to return to the office. Becky says, “We couldn’t talk with opposing counsel. We couldn’t talk with companies or anything.”
That’s core to what the CFPB does. Created in 2010 in response to the foreclosure crisis, the bureau’s mission is to make sure consumers have access to reliable finances. It’s also not funded by taxpayer dollars. Becky explains, “We are funded by money that comes from the Federal Reserve from the interest they earn when they loan money to banks.”
Regulation is a hot-button topic. Last year a financial industry group challenged the CFPB’s regulatory authority. The Supreme Court ruled that the CFPB is constitutional and still subject to oversight by Congress. Becky adds, “They did change the structure in terms of making it possible for the president to fire the director at will.”
And they’ve faced other challenges to their authority. Last year after the CFPB issued a request for information from mortgage lenders, the Mortgage Bankers Associationpushed back saying the industry had done enough.
But Becky says the CFPB continually finds new violations. “Within financial regulation there’s lots of different industries and so it made sense to Congress to put all of those together and have one agency specialize in financial consumer protection.”
Because of the CFPB’s work, consumers have received nearly $20 Billion in financial relief from bad actors. “We get lots of money back into Americans pockets, individual Americans pockets. More money than it costs to run the agency really.”
Becky’s own work for the bureau has delivered real money to consumers pockets. Most recently she got a $3 Million redress for homeowners who’s mortgage servicer was not properly handling foreclosure risk.
“They were already under a consent order for violating those rules that had been issued in 2017, and then when examiners went in to check on compliance, they noticed that they weren’t complying with what they were supposed to be doing.”
She’s proud of her work. In this case, she won an agreement that if the company continued to not comply with orders, the leadership of the company would face financial consequences.
Despite that, the Trump-appointed CFPB Director Russell Vought has maintained the work stoppage by indicating in a letter to employees that they are to only do work “required by law.” However, bureau leaders have cancelled contracts for tools Becky needs to do her job in addition to sending everyone home.
So no agency is monitoring the complicated path of consumer access to money. “If companies know that there is nobody enforcing things, then they don’t have a lot of reason to follow the law.”
The CFPB’s union (the National Treasury Employees Union) is suing to allow regulators like Becky to return to the work Congress tasked them to do. For now Becky sits, waits, and hopes consumers realize this stoppage leaves them more exposed.
“This is really bad for them. I think you know we are risking another financial crisis without the CFPB.”
