Former CFPB attorney Ronald L. Rubin was once assigned to one of the agency’s largest debt collection investigations. His experience left him a harsh critic of the agency.
“The CFPB’s strategy was, and still is, to produce dramatic headlines by suing ‘choke points’ – i.e., the leading firms in every consumer financial business,” he wrote for the Weekly Standard.
Rubin said the CFPB’s 2012 investigation of two large debt-collection firms demonstrated to him the bureau’s “cynical” objectives.
“The Dodd-Frank law that created the CFPB armed it with a Stalinesque administrative process that guaranteed these two unlucky firms would fork over tens of millions of dollars in fines,” he wrote. “After three years of futile protests, both agreed to the same penalty the bureau charges almost all of its investigation targets – the maximum they could afford to pay. CFPB enforcement attorneys demand detailed financial information from every target for the sole purpose of calculating that figure.”
While debt collection firms may not get much sympathy, Rubin made the case that the CFPB’s targeting of those firms hurts everyone in the long run.
“Lenders ultimately pass increased default and operating expenses on to borrowers by charging higher interest rates,” he wrote. “When some consumers dodge lawful debts, all consumers pay the price.”
Read Rubin’s full story here.
A former CFPB enforcement attorney is accusing the agency of intentionally targeting the biggest financial companies and imposing large fines – largely to “produce dramatic headlines.”