CFPB Dispute, Consumer Financial Protection Bureau, judge, ruling, unconstitutional

CFPB Dispute Continues: Judge Rules Structure Unconstitutional

The Consumer Financial Protection Bureau, or CFPB dispute and accompanying drama is continuing to unfold. With April’s Senate vote on the CFPB Finance Bulletin, followed by rising questions about the affects of CFPB regulations on consumers, 2018 has proven to be an eventful– and not particularly pleasant– year for the organization. June is proving to be par for the course. Earlier this month New York U.S. District Judge Loretta Preska called the agency’s setup unconstitutional. What, if any, affect might this ruling have for BHPH dealerships?

This is a big change from January, when an appeals court ruled the structure of the CFPB to be legal. In fact Judge Preska entirely disagrees with the previous ruling. The issue, according to reports, is that the CFPB is an independent organization which, according to some, wields too much power with too little transparency. On top of that, the president lacks to power to fire the CFPB director without documented cause, making the organization’s leadership entrenched.

Some of the leadership, in fact, agrees with Judge Preska’s ruling. Acting director of the CFPB, Mick Mulvaney, called the bureau “a joke,” and since his appointment in November has been working to weaken it from the inside. To hear him speak, it would seem that he wants the CFPB dispute to end with the agency being required to adopt increased accountability and transparency measures.

This move has been largely counteracted not only by the continuing CFPB dispute, but also an ongoing clash with Senator Elizabeth Warren. Warren accused Mulvaney in April of “hurting real people to score cheap political points.”

She has not been the only one to criticize Mulvaney, with others saying he was no longer putting the consumer first in the CFPB’s functions. Mulvaney himself, however, has maintained that he is trying to curb the organization’s power in the midst of a raging CFPB dispute. Previous requests concerning the CFPB have included the institution of independent inspection, as well as relinquishing control over the CFPB budget to congress.

Mulvaney has also been pointing a finger at Senator Warren in the course of this CFPB dispute. Because the bureau was originally her idea, he has been laying the blame for some of its deficiencies on her proverbial doorstep. Recently, he even referred to the organization as “Elizabeth Warren’s baby,” claiming that that would have to change before the CFPB could become useful regulatory body. Indeed, Warren still takes an obvious interest in the organization she helped create, speaking out against President Trump’s recent appointment of Kathy Kraninger as Mulvaney’s replacement. While Mulvaney himself seems disposed to view this as Senator Warren trying to control the CFPB, Warren claims that it is merely because Kraninger has “no track record of helping consumers.”

If you’re starting to feel a little dizzy, you’re not alone. In the middle of this CFPB dispute, with all of its blame shifting, the recent ruling by Judge Preska feels almost like a breath of fresh air. It is a relief to see something actually happening. The problem is that it is unclear exactly how much effect this ruling might have. The immediate effects, at any rate, will be limited. (The CFPB can no longer participate in the current law suit involving 9/11 responders who were scammed, for example.) However, as the CFPB dispute rages on, the long term effects of this ruling are still far from certain. For the time being, BHPH dealerships, along with consumers, will have to continue watching and waiting. There seems little more to be done at present.

Sources: CNN: CFPB Ruling

CNN: Warren and Mulvaney Clash



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