Enforcement

The Consumer Financial Protection Bureau's revocation of a Trump-era policy on abusive practices could mean higher fines and penalties for violators. But it still isn't clear what makes a practice abusive.

A recent statement by acting Director Dave Uejio is the clearest signal that the agency plans to revive strong underwriting standards that the Trump administration eliminated.

The agency's new leadership, which has already unwound numerous actions from the prior administration, said the January 2020 guidance implementing criteria for punishing firms that mistreat customers was “inconsistent with the bureau’s duty to enforce Congress’s standard.”

Rohit Chopra, President Biden's pick to lead the Consumer Financial Protection Bureau, told a Senate panel he would do more to protect veterans from foreclosure, empower consumers to dispute data on their credit records and crack down on student loan servicers that aren't helping troubled borrowers.

Rohit Chopra, President Biden’s nominee to lead the Consumer Financial Protection Bureau, has not minced words in calling out private companies for wrongdoing. He could get a grilling from Banking Committee Republicans and some opposition on the Senate floor.

The agency is recruiting more attorneys and shuffling personnel under new Democratic leadership as it prepares to toughen oversight of the financial services industry.

Dave Uejio, acting director of the Consumer Financial Protection Bureau, promised to protect veterans from predatory loans and to crack down on companies that improperly garnish stimulus checks or mistreat struggling borrowers.

Now that Democrats have won control of the Senate following the Georgia runoffs, experts say tax increases, progressive regulators and stricter congressional oversight await. Still, there could be some positives for banks, too.

The agency said Omni Financial in Las Vegas illegally required service members to designate a portion of their paychecks to repay loans, depriving of them of other payment options.

The Consumer Financial Protection Bureau has taken a hands-off approach to servicers during the pandemic. But with forbearance plans set to expire and President-elect Biden likely to appoint new CFPB leadership, companies lacking aggressive plans to help borrowers could face tougher enforcement.