A spokesman for the American Financial Services Association (AFSA) said the Consumer Financial Protection Bureau (CFPB) does not have strong enough policies for rule making and direction, relying on "blog posts and occasional guidance."
“We appreciate that the CFPB press office cited a blog post about use of guidance, as it confirms the very point our organization and others have been making, which is that the Bureau believes that blog posts and occasional guidance are acceptable substitutes for standard rule making,” Ed McFadden, AFSA’s senior vice president of communications, told American Credit News. “They are not.”
“And this simply highlights why Congress must assert a greater role in accountability for the Bureau,” said McFadden.
A spokesperson for the Consumer Financial Protection Bureau (CFPB) responded to the American Financial Services Association (AFSA) president’s call for regulatory clarity by sharing a 2022 blog post with American Credit News.
The blog post, “Rethinking the approach to regulations,” was authored by CFPB Director Rohit Chopra in June 2022.
“Thank you for your query,” wrote CFPB spokesperson Tia Elbaum in response to a request for comment on American Credit News’ May 9 story in which AFSA President Bill Himpler said his industry would like “clarity, not confusion” from the CFPB.
”We’d refer you to the following blog by the CFPB Director,” wrote Elbaum, linking to the aforementioned 2022 blog post.
“Markets work best when rules are simple, easy to understand, and easy to enforce,” wrote Chopra. “The CFPB is seeking to move away from highly complicated rules that have long been a staple of consumer financial regulation and towards simpler and clearer rules.”
“In addition, the CFPB is dramatically increasing the amount of guidance it is providing to the marketplace, in accordance with the same principles,” Chopra wrote.
Himpler told Legal Newsline in March that the CFPB creates uncertainty for the marketplace by refusing to clearly explain its rules.
“What we're calling on the CFPB to do is not operate regulation by enforcement or press release or blog, but to use (Administrative Procedures Act) rulemaking authority," said Himpler.
Established in 1916, AFSA is a national trade association for the consumer credit industry in the United States. Headquartered in Washington, D.C., AFSA represents a wide range of financial services companies, including consumer and commercial finance companies, auto finance companies, mortgage lenders, credit card issuers, and industry suppliers. The association advocates for its members at both the federal and state levels, focusing on legal, regulatory, and legislative issues related to consumer credit.
The CFPB was created in 2011 following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It operates as an agency of the United States government with the primary mission to enforce federal consumer financial laws and protect consumers in the financial sector.
The bureau's jurisdiction encompasses banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the United States. The bureau spent $2.75 billion in FY 2023, according to the Government Accounting Office (GAO).