CFPB Pauses Enforcement Changes After Staff Objections
After initially announcing plans to reorganize the agency to prioritize supervision over enforcement, the Consumer Financial Protection Bureau (CFPB) recently announced that it is halting the restructuring plans after staff objected to the changes. The restructuring would have required the unit to seek approval for new research and investigations from a new office in the Supervision, Enforcement, and Fair Lending unit (SEFL).
“The feedback I received raised important concerns that warrant more considered thought and analysis,” said an email from Bryan Schneider, associate director of the SEFL unit obtained by Bloomberg Law. “It has also demonstrated the need for further engagement around the best solutions for the issues you raised in the SEFL org review.”
CFPB Associate Director of Supervision Peggy Twohig would have led the new Office of SEFL Policy and Strategy under the reorganization. The new office would approve proposed research matters and investigations by the enforcement division, which is currently authorized to open investigations without outside approval.
CFPB Director Kathleen Kraninger signed off on the proposed restructuring after more than seven months of review. However, the proposal brought criticism from Democratic lawmakers who said it would allow big banks to solve issues through the confidential supervisory process, avoiding possible scrutiny and penalties for those actions.
President-elect Joe Biden is expected to replace Kraninger at the start of his term, so the reorganization will likely be decided by the CFPB’s next director.
“At this point, new CFPB leadership under President Biden should determine the future direction of the agency,” said Senator Sherrod Brown (D-Ohio).