The Consumer Financial Protection Bureau faces a high-stakes legal fight.
The Consumer Financial Protection Bureau, a federal agency that rose from the wreckage of the Great Recession, is readying for a high-stakes fight Tuesday at the U.S. Supreme Court.
“Key to the current case is a law that goes right to the very existence of the CFPB. Lawyers representing payday lenders say receiving funding from the Federal Reserve violates the constitution.” Related: Payday lenders want Supreme Court to gut the CFPB. They paid $200 million in fines to regulators, records show.But would-be homebuyers, sellers and lenders could be in store for some of the biggest shockwaves. If the court invalidates how the CFPB is funded and casts doubt on a wider range of regulations beyond payday loans, the results could be access to fewer mortgages, observers say.
“The CFPB sets out rules on deceptive practices to protect consumers, and if it were to lose its funding, new questions could arise about whether the agency still had the power to enforce its rules. ” “Critically, the ramifications of the Supreme Court’s decision could go beyond rules on payday loans if the court ultimately decides to take a broad look at the CFPB’s jurisdiction.”
“This is one of the biggest financial transactions that a consumer can make, and the CFPB governs those regulations that ensure there’s that adequate transparency and protection as they engage in this process,” she said.In 2017, a rule related to payday lending blocked lenders from trying to withdraw loan repayments from borrowers after two straight failed attempts because of insufficient funds.
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