October 16, 2020
Last month, BuzzFeed News published a report that alleged that banks sat on their hands while criminals laundered trillions of dollars over two decades. In the wake of the scandal, commentators have contended that reform is needed. While reform is needed, the report suggests the banks followed the letter of the law—that law being the Bank Secrecy Act and its respective regulations.
October 14, 2020
Last month, the Federal Reserve released a preliminary proposal to update the Community Reinvestment Act. The Fed’s proposal deviates greatly from the free-market, albeit imperfect, revamp of the CRA finalized by the Office of the Comptroller of the Currency earlier this year. The Fed’s proposal would do little to fix the existing problems with the CRA and create even more, inevitably hurting both lenders and borrowers.
October 2, 2020
Recent research from the Consumer Financial Protection Bureau has found that consumers have not experienced significant increases in negative credit outcomes as a result of the COVID-19 pandemic and that negative credit outcomes remain lower than they were prior to the Great Recession. Two new reports help illustrate how consumers have fared during the pandemic.
September 29, 2020
Earlier this month, the California Legislature passed the California Consumer Financial Protection Law to create a new state-based regulatory agency modeled after the federal Consumer Financial Protection Bureau. If the legislation is signed by Governor Gavin Newsom, he would be approving of a bill that picks winners and losers in the financial services sector and that would hurt consumers.
August 26, 2020
In a recent piece, Washington Post Opinions Contributor Helaine Olen slammed CFPB Director Kathy Kraninger for doing too little to protect consumers during the COVID-19 pandemic. While it’s true that Kraninger went forward with a modest measure to revise the bureau’s preexisting small-dollar loan rule in July, it’s wrong to argue that this was without cause or anti-consumer.
August 18, 2020
The Consumer Financial Protection Bureau recently published a report that explores the use and proliferation of debt settlement. While its findings identify some important trends across the economy and debt settlement industry, it is important that regulators do not use this report as a justification for burdensome new regulation of debt settlement firms.
July 2, 2020
On June 29, the Supreme Court ruled the structure of Consumer Financial Protection Bureau to be unconstitutional. Chief Justice John Roberts delivered the majority opinion, arguing that “the structure of the CFPB violates the separation of powers,” but noting that “the CFPB Director’s removal protection is severable from the other statuary provisions bearing on the CFPB’s authority.” In non-legalese, this essentially means that the agency may continue to exist so long as the CFPB director is removable by the president at will.
June 18, 2020
Debt collection firms play a vital role in a market economy, as part of the "plumbing"—the underlying architecture—that makes modern credit markets possible. Legislation to constrain the debt collection industry would disrupt credit markets, ultimately hurting consumers.
June 3, 2020
On May 19, student loan servicer Navient filed for summary judgement on a CFPB lawsuit started over three years ago. In the filing, Navient urged Judge Robert D. Mariani of the Middle District of Pennsylvania to stop the litigation, arguing that the agency has yet to bring forth any evidence to support its claim that the company purposefully misled borrowers into forbearance.
May 20, 2020
The HEROES Act calls for trillions of dollars in new deficit spending and includes a number of longstanding progressive pet projects unrelated to the COVID-19 pandemic. Yet, there is a free-market pony in the middle of this pile of big-government initiatives: Affirming the legality of banking services to marijuana-related firms in states that have declared the substance legal.