In Letter to Kraninger, Reps. Waters and Green Question Lack of Restitution in Recent CFPB Settlements

On February 7, Rep. Maxine Waters (D-CA) and Rep. Al Green (D-TX) submitted a request for documents to the Consumer Financial Protection Bureau (CFPB or Bureau) related to recent settlements the Bureau entered with certain financial services companies. This request was included in a three-page long letter to the Bureau’s Director Kathy Kraninger.

The letter opens with:

The Consumer Financial Protection Bureau ("Consumer Bureau") has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct. This stands in stark contrast to the Consumer Bureau's practice under the leadership of former Director Cordray. During Director Cordray's tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years. American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.

The letter goes on to outline three settlements entered into since the beginning of the year where, according to the letter, redress to consumers was missing. The three settlements include:

1. Sterling Jewelers Inc., where the company was accused of enrolling credit card customers into a payment protection plan without consent. The settlement includes a $10 million penalty payment, but does not include a refund for consumers impacted by the company’s actions.
2. Enova International, Inc., where the company was accused of debiting consumers’ bank accounts without authorization. The settlement included a $3.2 million penalty, but does not include a redress to consumers for “extract[ing] millions of dollars in unauthorized debits from consumers’ accounts.”
3. NDG Financial Corp., where the company is accused of collecting on payday loans made in violation of state law. The settlement did not require the company to provide relief to impacted consumers.

The documents requested include any communications the between the Bureau and others, including the accused companies listed above, related to restitution or redress to impacted consumers.

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insideARM Perspective

Rep. Waters made it clear that she would focus her attention at the CFPB if she were to become the Chair of the House Financial Services Committee. As far back as October – shortly before the midterm election that resulted in Democratic control of the House of Representatives – Rep. Waters took action directed at the CFPB by introducing a bill that would require the CFPB to meet its statutory purpose. A month and a half after being chosen to serve as the Chair of the Committee, it seems Rep. Waters is keeping true to her word.