McHenry, Emmer, Luetkemeyer Demand Answers from CFPB Director Chopra Regarding Alleged Improper Collusion with State AGs
July 28, 2022 -
Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), the top Republican on the Subcommittee on Oversight and Investigations, Tom Emmer (MN-06), and the top Republican on the Subcommittee on Consumer Protection and Financial Institutions, Blaine Luetkemeyer (MO-03), sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra.
The letter demands Director Chopra provide documents and information regarding alleged collusion between the CFPB and state Attorneys General (AGs) offices to pursue duplicative enforcement actions, in violation of the Consumer Financial Protection Act.
Read the full letter to CFPB Director Chopra here.
Read key excerpts from the letter to CFPB Director Chopra:
“Dear Director Chopra,
“It has come to our attention that the Consumer Financial Protection Bureau may be colluding with states contrary to the Consumer Financial Protection Act (CFPA). On May 19, 2022, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule to expand the authority of states to pursue and enforce violations of federal consumer protection law under the CFPA. The CFPB further promoted this additional enforcement activity by assuring states they may bring ‘an enforcement action to stop or remediate harm that is not addressed by a CFPB enforcement action against the same entity.’ At the same time you announced this rule, you announced more than 20 arrangements with state attorney general offices.
“While Congress intended for the CFPB to enforce federal consumer financial laws and protect consumers in the marketplace, it did not intend for the CFPB to intimidate companies by conspiring with state agencies to pursue duplicative enforcement actions. The Dodd-Frank Act limits the attorney general in bringing a federal enforcement action. Pursuant to 12 U.S.C. §5552, a state attorney general or state regulator ‘shall timely provide a copy of the complaint to be filed and written notice describing such action to the Bureau and the prudential regulator.’ In response, the Bureau may intervene as a party in the action, and upon intervening ‘remove the action to the appropriate U.S. District Court, if the action was not originally brought there.’ The CFPB may also ‘appeal any order or judgement, to the same extent as any other party in the proceeding may.’
“It is clear that state attorneys general may enforce the CFPA in cases where the CFPB has not. But the statute does not allow for a state attorney general to become a party to an existing CFPB enforcement action. It is therefore inappropriate for the CFPB to recruit a state attorney general that is not otherwise investigating a company, to pursue enforcement as a means of intimidation.
“This announcement is not new. According to your calendar, between October 12, 2021, and April 30, 2022, you spoke with attorneys general throughout the country on twenty-three occasions. On December 7, 2021, you addressed the National Association of Attorneys General, during which time you encouraged state attorneys general to bring actions under the ‘Consumer Financial Protection Act, particularly when federal protections are stronger than state statutes.’ Moreover, you spoke about working with states to ‘rein in repeat offenders.’
“Since then, the CFPB has sued three ‘repeat offenders,’ in one case partnering with the New York Attorney General. On April 21, 2022, the CFPB and the New York Attorney General filed a lawsuit against MoneyGram International, Inc. and MoneyGram Payment Systems, Inc. (MoneyGram). In the complaint, MoneyGram, one of the largest remittance providers in the United States, is alleged to have violated the Remittance Rule. In addition to the lawsuit, you ‘authorized information sharing with MoneyGram’s state authorities to facilitate parallel actions.’
“Of course, one of the duties of the CFPB is to enforce the CFPA and protect consumers from predatory and discriminatory practices, among other things. However, the effect of the May 19, 2022 interpretive rule is different from solely enforcing the law. It is more akin to deputizing state attorneys general to enforce the CFPA on behalf of the CFPB – something Congress did not authorize. Furthermore, under the May 19, 2022 interpretive rule, the CFPB can forum shop across the country to find friendly attorneys general willing to bring cases on behalf of the Bureau, rather than the process that Congress intended, whereby attorneys general bring a case to the CFPB when appropriate. …”
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