On March 11, 2021, Jonathan Pompan was quoted in Bloomberg Law on the Consumer Financial Protection Bureau’s (CFPB) announcement that it is lifting Trump-era restrictions on the agency’s ability to collect civil penalties and disgorgement from banks and financial companies for abusive acts and practices.
According to the article, the agency rescinded a January 2020 policy statement from former CFPB Director Kathy Kraninger that established a tough, two-part test for enforcement staff to bring abusiveness claims under the Dodd-Frank Act.
The 2010 Dodd-Frank Act, which created the CFPB, gave the bureau unique powers to bring claims against abusive acts and practices. Other federal financial regulators can only bring more traditional claims that companies engaged in unfair or deceptive acts or practices. The CFPB will now give its enforcement attorneys greater leeway to determine if a company has engaged in abusive practices, and to levy heavier penalties for such conduct.
“Realistically the organization and its staff wield a lot of power, and this suggests once more they will be using it,” said Pompan.
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