By Douglas Gillison WASHINGTON (Reuters) -The top U.S. consumer financial watchdog, which the White House refuses to fund, is seeking to move all remaining enforcement cases and litigation to the Department of Justice in light of the agency’s dwindling financial resources, according to four people with knowledge of the matter. The Consumer Financial Protection Bureau, […]
U.S.
US consumer watchdog seeks to transfer cases to DOJ, citing funding, sources say
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By Douglas Gillison
WASHINGTON (Reuters) -The top U.S. consumer financial watchdog, which the White House refuses to fund, is seeking to move all remaining enforcement cases and litigation to the Department of Justice in light of the agency’s dwindling financial resources, according to four people with knowledge of the matter.
The Consumer Financial Protection Bureau, which said last week it expects to exhaust remaining funds after December 31, has pending court cases against companies including credit bureau Experian, but dropped most active enforcement matters earlier this year.
Spokespeople for the CFPB and Justice Department did not immediately respond to requests for comment on Thursday evening.
The decision was a major step in the Trump administration’s efforts to dismantle the CFPB, which Trump and acting Director Russell Vought have said should be shut down despite a court order prohibiting this which remains in effect.
The decision heightened expectations that agency workers will be furloughed, or go without pay, immediately thereafter. The agency warned staff of that possibility in September.
It was unclear whether the Justice Department would be equipped to absorb the CFPB’s cases, given heavy staff departures in recent months.
The CFPB was created following the 2008 financial crash to police consumer industries which produced many of the toxic assets that underpinned the crisis and is the only federal agency empowered to enforce consumer financial laws at the federal level. It has returned more than $21 billion to harmed consumers.
Since its creation in 2011, the CFPB has faced relentless legal and political attacks from industry and Republicans who accused the agency of acting illegally, exceeding its legal authorities and needlessly burdening free enterprise. Though challenged in court, the Trump administration’s actions this year are the closest yet to eliminating the agency.
Democrats have assailed the action as a giveaway to predatory actors that will leave the public vulnerable to scams, fraud and unfair practices.
“This is Russ Vought’s latest illegal power grab in his ongoing plan to shut down the CFPB and protect CEOs instead of consumers,” Cat Farman, president of the CFPB’s worker union, said in a statement, accusing Vought of illegally refusing to fund the agency and calling on Congress to remove him from office.
(Reporting by Douglas Gillison in Washington; Editing by Chris Reese and Sonali Paul)