For the Consumer Financial Protection Bureau, the hits just keep coming.
In the latest blast from the Trump administration, the Education Department said it is ending an information-sharing agreement because the CFPB handled complaints about federal student loans instead of passing them on to the department.
"This latest [jurisdictional] expansion is characteristic of an overreaching and unaccountable agency," wrote Education Department officials in a letter sent late last week to the consumer watchdog agency, saying the agreement called for the CFPB to forward all of those complaints.
CFPB spokesman David Mayorga said his agency had "not previously heard any concerns as we have worked together to make sure that all student loan borrowers are treated fairly, with respect and dignity."
The criticism in the Education Department letter echoes ongoing charges from other administration officials, congressional Republicans and the financial services industry that the agency and its director, Richard Cordray, operate with too much power and too little oversight.
And as lawmakers are resuming their work in Washington this week following their month-long recess, multiple pieces of legislation are on the table that would address critics' concerns by reining in the CFPB's power.
Among them is the Financial Choice Act, which the House passed in July. The bill would end the CFPB's rulemaking ability and allow its director to be fired at will (currently disallowed), among other provisions. Whether the Senate would have the required 60 votes to pass it is questionable.
"It's too controversial," said Alan Kaplinsky, a partner with national law firm Ballard Spahr. "It would make dramatic changes to the CFPB, and Democrats simply aren't going to support it."
Awaiting Senate Action
H.R. 10 (Financial Choice Act)
This bill, which aims to gut many parts of the Dodd Frank financial reform bill of 2010, would also strip the CFPB of its rulemaking ability and make it an enforcement agency, allow the president to fire the agency's direct with or without cause, end its authority to supervise and examine financial institutions and let Congress decide the agency's funding, among other provisions.
H.J. Resolution 111
This joint resolution nullifies a new CFPB rule that bans financial firms from including mandatory arbitration clauses in customer agreements. The rule, scheduled to take effect Sept. 18, would make it easier for consumers to band together in class-action lawsuits.
In addition, the House also passed a resolution in July to kill a new rule issued by the CFPB that bans financial firms like banks or credit card companies from including mandatory arbitration clauses in customer agreements. The rule, scheduled to take effect Sept. 18, would make it easier for wronged consumers to band together in class-action lawsuits.
While the fate of the resolution is unclear, Kaplinsky said it has a better chance than the Financial Choice Act of getting Senate approval because it only requires a majority vote vs. the 60 required with legislation.
"Right now there are three or four Republican senators who are undecided or haven't said which way they'll vote," said Kaplisnky, who co-chairs his firm's consumer financial services group and blogs about the CFPB.
Republican disdain for the agency has persisted since it was created by the Dodd-Frank Act financial reform bill of 2010. Yet public opinion could stand in the way of the GOP kneecapping the agency despite the party's hold on both chambers of Congress and the White House.
A poll done in June by for the Center for Responsible Lending and the Americans for Financial Reform showed bipartisan support among American consumers for a watchdog agency: 80 percent of Democratic voters, 77 percent of independent voters and 66 percent of Republican voters either strongly or somewhat support the mission of the CFPB.
"Reining in Wall Street is not a left-right issue. It's a big guy-little guy issue," said Mike Litt, consumer advocate with U.S. PIRG, in a statement regarding the poll's results.
The CFPB, whose mission partly is to prevent and pursue abusive lending and debt collection practices, says it has received more than 1.2 million since 2011.
It also has returned nearly $12 billion to 29 million people wronged by financial institutions, including credit card companies and banks. Most of the complaints received by the agency relate to debt collection (27 percent) and mortgages (23 percent).
Despite the ongoing threats of reduced jurisdictional power and less funding, the CFPB has continued in its crusade to protect consumers in their relationships with financial institutions.
Among the new rules the agency is tackling is one to crack down on so-called payday loans, which are short-term, small-cash loans typically used by consumers coming up short until their next paycheck. The CFPB is expected soon — perhaps this month — to issue a final rule, which would tie a consumer's ability to use one of these loans to their ability to repay it.
Kaplisnky said that rule, too, will likely face pushback among CFPB opponents on Capitol Hill.
Meanwhile, amid all the rumbling, is the broad assumption that Cordray, the CFPB director, will resign his post soon to run for governor of Ohio. Cordray, a Democrat, formerly served as that state's attorney general. His five-year CFPB appointment runs until mid-2018.
Kaplinsky said that if Cordray does resign and it's not quickly made clear who's running the ship with full legal authority to do so, "there is the potential for chaos at the bureau."