WASHINGTON (Reuters) -The reversal of dozens of enforcement actions by the U.S. Consumer Financial Protection Bureau has jeopardized more than $360 million in compensation to consumers allegedly harmed by financial companies, according to an analysis released Tuesday by pro-consumer organizations.
The compensation relates to allegations of predatory practices by lenders, student loan servicers, money transfer businesses and others pursued by the CFPB in recent years.
The latest estimate from the Consumer Federation of America and Student Borrower Protection Center adds to what critics of President Donald Trump’s administration say is the mounting cost to ordinary people from his clampdown on the CFPB.
The two organizations also said last month that the CFPB’s rollback of regulations on overdraft and credit card late fees and the dismissal of enforcement cases would increase consumer costs by $18 billion.
The CFPB’s current leaders have said they are changing the agency’s focus and have criticized prior enforcement actions as politicized and unfair attacks on free enterprise. The agency now says it can meet its obligations under the law with about 90% fewer employees.
According to the analysis released Tuesday, recent CFPB actions to revise or cancel consumer payouts due from settlements dating back as far as 2023 with Navy Federal Credit Union, the lending arm of Toyota, National Collegiate Student Loan Trusts and the money transfer company Wise together account for more than $120 million.
The authors, former top CFPB officials Eric Halperin and Allison Preiss, say these reversals cast doubt on dozens of other prior cases involving more than $244 million in further consumer payouts that the CFPB may have yet to approve or process, such funds arising from actions against Cash App parent Block and student loan processor Navient.
Congress created the CFPB following the 2008 financial crisis to protect consumers from unfair, deceptive or abusive practices. A federal appeals court in Washington has yet to decide on the legality of the CFPB’s attempt this year to dismiss the vast majority of its staff.
(Reporting by Douglas Gillison in Washington; Editing by Stephen Coates)
Comments