Since the moment the Consumer Financial Protection Bureau opened its doors over a decade ago, there have been criticisms about its lack of accountability and oversight, its largely unchecked structure and its inclination toward playing politics. The latest, most prominent source of these concerns has been the bureau’s efforts to cap prices and eliminate fees it doesn’t like through a crusade against so-called “junk fees.”
Similarly, the CFPB has consistently targeted industries it doesn’t like: companies offering short-term, small-dollar loans have faced heightened scrutiny. Unable by law to cap the industry’s fees, the CFPB recently seems to have abandoned standard, transparent, time-intensive rulemaking. Instead, it has pivoted to indirect regulation by investigation and enforcement.
Such efforts illustrate the continuing necessity of CFPB reform — to bring essential sunlight, objectivity and a core focus on consumers’ financial needs and protections through a fairly regulated financial services marketplace.
As a stark example of indirect regulation by investigation, over the last year and a half, multiple companies in our industry — including members of INFiN, the national association for state-licensed operators — have been unexplained targets of the CFPB’s investigations, receiving extensive and aggressive civil investigative demands, or CIDs, that threaten the future of their business and the vitality of our industry.
Read more in American Banker