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U.S. Justice Dept. Challenges Consumer Lending Watchdog Agency
A federal agency set up after the banking crisis to monitor auto loan companies and other lenders in the U.S. has been challenged as unconstitutional by the U.S.
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A federal agency set up after the banking crisis to monitor auto loan companies and other lenders in the U.S. has been challenged as unconstitutional by the U.S. Dept. of Justice, Reuters reports.
The Consumer Financial Protection Bureau was set up in 2010 within the Justice Dept. to help protect consumers against fraud in lending. Thus the Justice Dept. under the Trump administration is challenging the legality of one of its own departments.
Critics says CFPB’s single-director structure gives its chief—an appointee of the Barack Obama administration—too much power. Under the law, the president can remove the bureau’s director only for cause. The current director's term expires next year.
The constitutionality of the bureau is being challenged by mortgage company PHH Corp. The Justice Dept.’s brief in support asserts that CFPB’s structure increases the risk of the bureau “taking actions or adopting policies inconsistent with the president’s executive policy.”
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