The management of the Consumer Financial Protection Bureau is in legal dispute, leaving payment compliance officers and the collections industries in a state of flux.
Richard Cordray has resigned and named his chief of staff, Leandra English, to take over as the bureau's acting director per the rules of the agency established under 2010's Dodd-Frank Act. In response, President Trump subsequently announced that Mick Mulvaney, the current director of the Office of Management and Budget, would be acting director of the consumer watchdog agency. Obviously both appointments cannot stand; English filed a lawsuit against Trump and Mulvaney, seeking a court order halting the appointment of Mulvaney as acting director.
The outcome would have major differences. If English wins the suit we may see the new proposed rules published during her term as acting director. If she does not, the new rules likely won’t see the light of day. Mulvaney has been a very vocal opponent of the CFPB both in terms of its purpose and its structure and he will not want to be associated with increased regulation.
It is unlikely the CFPB will be entirely unraveled either in the short run or the long. Both Republicans and Democrats have constituents to answer to and any move to completely deregulate the credit and collection industry could spell political suicide. However, the CFPB’s control will almost certainly be modified. There is an appetite on Capitol Hill to seat a five person commission to direct the actions and decisions of the CFPB rather than a single director.
Compliance professionals have less than 12 months to effect positive change. The interim elections next November could upset the makeup of Congress to the detriment of Republicans.
The best course of action is to not focus advocacy efforts on the CFPB; rather, focus efforts on those members of Congress who support small business, deregulation and free enterprise. Help them understand why more regulation, and in particular regulation that does not bring crystal-clear guidance to rules such as the Fair Debt Collections Practices Act, is pointless and costly.