Document Type

Article

Publication Date

11-2017

Abstract

The Financial Choice Act of 2017 is appropriately named in at least one sense: its proposed restrictions on the authority of the Consumer Financial Protection Bureau reflect a choice by the House of Representatives to protect financial companies at the expense of consumers. This choice is borne out by the data. As this empirical review of CFPB enforcement cases demonstrates, nearly all of the relief provided to American consumers in CFPB enforcement cases arose where a bank, credit union, or other finance company deceived their customers about a material aspect of their product or service. Between 2012 and 2016, the CFPB’s enforcement efforts generated $10.5 billion in consumer relief –accounting for 93 percent of all compensation—in cases that included a deceptive-practices claim. Had the Choice Act been in effect, the CFPB would have been powerless to stop the deception of American consumers by financial corporations within its jurisdiction. This change alone would have eliminated or seriously weakened the vast majority of CFPB cases. Moreover, the Choice Act’s blanket exemption on law enforcement cases involving payday loans and similar forms of credit would have eliminated at least 24 enforcement cases where the CFPB found payday or vehicle title lenders breaking the law, generating $73 million in consumer relief and $28 million dollars in civil money penalties. Between the Choice Act’s elimination of UDAAP claims and its proposed exemption for payday lenders, had the Act been in effect from 2012 to 2016, many consumers would have lost out on billions of dollars of relief, and even more would have fallen prey to unchecked violations of numerous consumer protection laws. This empirical comparison of the proposed Choice Act’s provisions to the CFPB’s law enforcement track record leaves little doubt that if the bill passes, meaningful consumer law enforcement will grind to a halt within the rebranded Consumer Law Enforcement Agency. Indeed, the Choice Act’s renaming of the CFPB as the Consumer Law Enforcement Agency is ironic and misleading. The Choice Act makes a stark and unapologetic choice favoring corporate wrongdoing and lawlessness over consumers.

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