GOP Lawmakers: CFPB Must Undo Changes to UDAAP Enforcement, Adjudications

House Republican lawmakers this week slammed recent changes made by the CFPB to its supervision examination manual for unfair or deceptive acts and practices and its rules of practice and procedure regarding administrative adjudication procedures, noting that these actions “deviate significantly from past practices” and were taken outside of the notice and comment process. In a letter to CFPB Director Rohit Chopra, the lawmakers—led by House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.)—called for the CFPB to “rescind these measures immediately and adhere to the appropriate notice and comment paradigm.”

The bureau’s recent changes to its administrative adjudication process greatly expanded the powers of the already-powerful CFPB director—something ABA and other financial trades called “a significant step in the wrong direction” in an April comment letter. ABA President and CEO Rob Nichols also raised concerns about the bureau under Chopra’s leadership in a hard-hitting op-ed last month published in American Banker.

“It sounds like harmless bureaucratic paper pushing, but in reality these changes allow Director Chopra to make decisions in enforcement actions that should be made by an impartial administrative law judge,” Nichols said of the administrative adjudication procedure changes. “He would play both prosecutor and judge in those cases.”

GOP lawmakers raised similar alarms. “Our concerns with the new UDAAP policy are heightened even more by the changes recently made to the rules governing CFPB administrative adjudications,” they wrote. “The rules of practice were effective immediately and provide significant new powers to the CFPB Director, limit due process rights, and will contribute to the formation of partisan, and not durable, jurisprudence. This action is disturbing.”

Read the lawmakers’ letter.
Read Nichols’ op-ed.
Read the joint trades’ letter.