CFPB’s Chopra says bureau will ‘be firing on all cylinders’ after SCOTUS win



Consumer Financial Protection Bureau Director Rohit Chopra said in a press call Friday that the agency — whose funding structure the Supreme Court decided a day earlier was constitutional in a 7-2 decision — will “forge ahead with our law enforcement work.”

Bloomberg News

With the Supreme Court decision affirming that the Consumer Financial Protection Bureau’s funding structure is constitutional, CFPB Director Rohit Chopra outlined the agency’s next steps, which include proceeding with cases that had been put on hold and plowing ahead with more enforcement actions.

“The CFPB is here to stay,” Chopra said Friday on a call with reporters. “Here’s what will happen next: The CFPB will be able to forge ahead with our law enforcement work.”

Chopra took what amounts to a victory lap after the Supreme Court ruled Thursday in a 7-2 opinion led by conservative Justice Clarence Thomas that the bureau’s funding is constitutional and does not violate the Appropriations Clause. The CFPB was sued in 2018 by two payday lending groups that challenged the bureau’s ability to issue the first federal payday lending rule — which was put on hold pending six years of litigation. 

With that case now over, Chopra said the bureau will be “firing on all cylinders,” and he reiterated his focus on prosecuting financial firms that he claims are repeat offenders. He also said the CFPB will continue to try to hold accountable individual executives “involved in calling the shots” who are found responsible for wrongdoing. 

Chopra also reiterated the bureau’s plans to hire 75 attorneys and support staff that will bring in its enforcement office to roughly 275 people, including a mix of lawyers, investigators, paralegals and economists. 

“We’ll have more people joining in the coming days and expect to be continuing to hire in the months ahead,” a senior CFPB official said on the call with reporters.

Fresh off the Supreme Court win, the CFPB on Friday sued the online lending platform Solo Funds, a Los Angeles-based fintech that lets users make small online loans to one another. The CFPB has alleged that the company deceived borrowers about the total cost of loans while advertising zero-interest or 0% annual percentage rate loans.

Chopra provided further proof that the CFPB is accelerating its actions on certain rulemakings by extending the compliance deadlines on Friday for the small-business data-collection rule, known as 1071 for its section in the Dodd-Frank Act. Some lenders had challenged the rule, which was stayed by a federal court in Texas last year pending the Supreme Court decision on the bureau’s funding. The CFPB plans to issue an interim final rule to extend compliance deadlines for the highest volume small-business lenders to July 18, 2025, rather than Oct. 1, 2024. Moderate and small-volume lenders will have until early and late 2026 to comply.

Another rule that has been fiercely litigated is the CFPB’s credit card late fee rule, which was put on hold days ahead of its May 14 implementation date by a federal judge in Texas. The CFPB said it will continue to vigorously defend that rule. 

“We’ll continue to defend our rule to close a long-standing late-fee loophole on credit cards, which credit card giants have abused for years,” Chopra said. 

All told, the CFPB has 14 actions in litigation that were stayed or inactive pending the Supreme Court ruling including two cases involving enforcement of the Military Lending Act, a senior CFPB official said. Those cases — one against FirstCash Inc. for allegedly making pawnshop loans to active-duty servicemembers or their families, and the other against online lender MoneyLion for allegedly overcharging servicemembers — will now move forward. 

The CFPB also has a number of petitions in federal court compelling payday lenders and debt collectors to respond to its civil investigative demands. 

The Supreme Court case filed by payday lending trade groups had the effect of putting many of the CFPB’s enforcement actions on hold, a senior CFPB official said. Many companies refused to comply or cooperate with the bureau, including on nonpublic investigations, that resulted in a cloud hanging over the agency’s work.

Chopra also said that the bureau plans to take action on debt collectors and credit reporting furnishers, which receive the highest number of consumer complaints. 

“We do not want a system where debt collectors can weaponize a credit report to coerce someone to pay a bill they may not even owe,” Chopra said in highlighting the significant uptick in complaints about credit reports. “We want to make sure that the credit reporting conglomerates and small background screeners alike are living up to their obligations under the law, which are that credit reports are accurate and that they investigate disputes.”

Lawyers continue to parse the Supreme Court’s opinion in the case, CFPB v. Community Financial Services Association of America, including the concurring opinion by Justice Elena Kagan, and a dissent by Justices Samuel A. Alito and Neil M. Gorsuch, that appeared to leave the door open to continued challenges to the bureau. 

“Opponents to the bureau are not done with their constitutional challenges but the funding mechanism may not be the road they choose to go down,” said Liz Boison, a partner at Hogan Lovells, and former prosecutor in the criminal division at the Justice Department and a former CFPB senior counsel. 

Justice Alito highlighted that the CFPB’s funding comes from the Federal Reserve — and is drawn from fees on banks rather than congressional appropriations or user fees.

“Thus no other agency — old or new — has enjoyed so many layers of insulation from accountability to Congress,” Alito wrote.

Just as trade groups sued the CFPB over the credit card late fee rule, the industry is widely expected to challenge the CFPB’s rules going forward under the Administrative Procedure Act, which governs the process by which federal agencies issue regulations.

With every single rulemaking, they can make an argument under the APA that can create trouble for the bureau, though maybe not at the existential level,” Boison said. 

Justice Thomas’ majority opinion hearkened back to first principles from long-ago history including the English Civil War and what he called the “broader struggle for popular control of the purse in England.” 

Justice Kagan’s concurring opinion, joined by Justices Brett M. Kavanaugh, Sonia Sotomayor and Amy Coney Barrett, claimed there was no need to do a deep historical dive in order to come to the conclusion that throughout history, Congress has created “a variety of mechanisms to pay for government operations.”

Some lawyers said the tendency for businesses to get lawmakers to do their bidding to restrict regulations was precisely the reason Congress structured the agency in such a unique way. 

When a three-judge panel of the U.S. Court of Appeals for the 5th Circuit ruled in 2022 that the CFPB’s funding structure was unconstitutional, it set up a major roadblock to the agency that now has been removed. 

“The 5th Circuit’s decision unquestionably disrupted the CFPB’s rulemaking and enforcement agenda,” said Rachel Rodman, a partner at the law firm White & Case LLP and a former CFPB enforcement attorney. “But at the end of the day, I think the CFPB feels vindicated and will push hard to accomplish as much as it can before the election.”

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