Today, U.S. Representative Ed Royce (R-CA), a senior member of the House Financial Services Committee, questioned CFPB Director Richard Cordray on the lack of public comments taken into account during CFPB rulemaking and enforcement actions. Rep. Royce questioned the agency's tendency to impose specific new requirements and policies without obtaining public or congressional input and suggested they use the rule making process, which has the benefit of notice and comment periods, rather than enforcement actions and bulletins.
The CFPB has issued four enforcement orders against banks this year with the connection to marketing with Debt Protection Products. Each enforcement action imposed drastically different remedial measures. "Regulation conducted through enforcement often results in confusion that can be harmful to consumers," Rep. Royce stated, "Many banks are uncertain about what is required of them to safely sell these debt protection products and have stopped offering them." Rep. Royce is requesting a written response from the CFPB to clarify the agency's position on debt protection products and what is required of banks to sell debt protection products. Royce encouraged the CFPB to consider looking into enlisting in advisory opinions to seek clarification on specific practices.
Watch the full hearing.
The ABIA is part of the Debt Cancellation Coalition, if you would like to join, please contact Sarah Ferman.