The CFPB’s newly revised rules of practice for administrative adjudication are “a step in the wrong direction,” expanding the powers of the bureau’s already-powerful director and reducing protections for defendant companies, a coalition of financial services groups including American Bankers Association said in a letter last week.
In particular, the groups noted that concentrating adjudicative authority in the CFPB director creates legal uncertainty and risks depriving defendants of due process, and that the implementation of the revised rules could unfairly favor the bureau in many cases. They also urged the bureau to revert back to prior rules while it considers further changes to its adjudication processes.
“Concentrating even greater power in a director who serves at the will of the president, the revised rules will not enhance the impartiality and fairness that are the hallmarks of sound administrative adjudication processes,” the groups wrote. “Rather, they will lead to legal interpretations that will be promptly abandoned once the White House changes hands, outcomes driven by policy rather than impartial application of law to the facts of a case, and a frustration of the due process that is promised all Americans. In short, the revised rules will make it harder for the CFPB to ‘enforce Federal consumer financial law consistently’ as required by Congress in the Dodd-Frank Act.”
