[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
FROM WATCHDOG TO ATTACK DOG:
EXAMINING THE CFPB'S CHOPRA-ERA ASSAULT
ON DISFAVORED INDUSTRIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
JUNE 26, 2025
__________
Serial No. 119-32
Printed for the use of the Committee on Financial Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-991 PDF WASHINGTON : 2025
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON FINANCIAL SERVICES
FRENCH HILL, Arkansas, Chairman
BILL HUIZENGA, Michigan, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
ANN WAGNER, Missouri NYDIA M. VELAZQUEZ, New York
ANDY BARR, Kentucky BRAD SHERMAN, California
ROGER WILLIAMS, Texas GREGORY W. MEEKS, New York
TOM EMMER, Minnesota DAVID SCOTT, Georgia
BARRY LOUDERMILK, Georgia STEPHEN F. LYNCH, Massachusetts
WARREN DAVIDSON, Ohio AL GREEN, Texas
JOHN W. ROSE, Tennessee EMANUEL CLEAVER, Missouri
BRYAN STEIL, Wisconsin JAMES A. HIMES, Connecticut
WILLIAM R. TIMMONS, IV, South BILL FOSTER, Illinois
Carolina JOYCE BEATTY, Ohio
MARLIN STUTZMAN, Indiana JUAN VARGAS, California
RALPH NORMAN, South Carolina JOSH GOTTHEIMER, New Jersey
DANIEL MEUSER, Pennsylvania VICENTE GONZALEZ, Texas
YOUNG KIM, California SEAN CASTEN, Illinois
BYRON DONALDS, Florida AYANNA PRESSLEY, Massachusetts
ANDREW R. GARBARINO, New York RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin RITCHIE TORRES, New York
MIKE FLOOD, Nebraska NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York BRITTANY PETTERSEN, Colorado
MONICA DE LA CRUZ, Texas CLEO FIELDS, Louisiana
ANDREW OGLES, Tennessee JANELLE BYNUM, Oregon
ZACHARY NUNN, Iowa SAM LICCARDO, California
LISA McCLAIN, Michigan
MARIA SALAZAR, Florida
TROY DOWNING, Montana
MIKE HARIDOPOLOS, Florida
TIM MOORE, North Carolina
Ben Johnson, Staff Director
------
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
DANIEL MEUSER, Pennsylvania, Chairman
TIM MOORE, North Carolina, Vice AL GREEN, Texas, Ranking Member
Chairman RASHIDA TLAIB, Michigan
ANN WAGNER, Missouri NIKEMA WILLIAMS, Georgia
BARRY LOUDERMILK, Georgia CLEO FIELDS, Louisiana
ANDREW R. GARBARINO, New York SAM LICCARDO, California
ANDREW OGLES, Tennessee
MIKE HARIDOPOLOS, Florida
C O N T E N T S
----------
Thursday, June 26, 2025
OPENING STATMENTS
Page
Hon. Daniel Meuser, Chairman of the Subcommittee on Oversight and
Investigations, a U.S. Representative from Pennsylvania........ 1
Hon. Al Green, Ranking Member of the Subcommittee on Oversight
and Investigations, a U.S. Representative from Texas........... 3
STATEMENTS
Hon. Maxine Waters, Ranking Member of the Committee on Financial
Services, a U.S. Representative from California................ 4
WITNESSES
Mr. James Kim, Partner, Cooley LLP 5
Prepared Statement........................................... 7
Ms. Jennifer Bassett, Chief Executive Officer, Pacific Rim
Alliance Corporation 12
Prepared Statement........................................... 14
Mr. Devin Watkins, Attorney, Competitive Enterprise Institute
(CEI) 22
Prepared Statement........................................... 24
Ms. Morgan Harper, Director of Policy and Advocacy, American
Economic Liberties Project 27
Prepared Statement........................................... 29
APPENDIX
MATERIALS SUBMITTED FOR THE RECORD
Hon. Al Green:
Consumer Financial Protection Bureau (CFPB) Worker's
Testimonies................................................ 60
Trumps Administration Sues all 15 Maryland Judges Over Order
Blocking Removal of Immigrants............................. 100
Hon. Nikema Williams:
Statement for the Record..................................... 107
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Representative
Maxine Waters
Mr. James Kim................................................ 109
Ms. Jennifer Bassett......................................... 110
Mr. Devin Watkins............................................ 111
Ms. Morgan Harper............................................ 112
Written responses to questions for the record from Representative
Nikema Williams
Ms. Morgan Harper............................................ 113
FROM WATCHDOG TO ATTACK DOG:
EXAMINING THE CFPB'S CHOPRA-ERA
ASSAULT ON DISFAVORED INDUSTRIES
----------
Thursday, June 26, 2025
U.S. House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
room 2128, Longworth House Office Building, Hon. Dan Meuser
[chairman of the subcommittee] presiding.
Present: Representatives Meuser, Loudermilk, Haridopolos,
Moore, Green, Tlaib, Williams of Georgia, Fields, Liccardo, and
Waters.
Chairman Meuser. Well, good morning. The Subcommittee on
Oversight and Investigations will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
This hearing is entitled ``From Watchdog to Attack Dog:
Examining the CFPB's Chopra-Era Assault on Disfavored
Industries.''
Without objection, all members will have 5 legislative days
within which to submit extraneous materials to the chair for
inclusion in the record.
[The information referred to can be found in the appendix.]
Chairman Meuser. I now recognize myself for 5 minutes to
give an opening statement.
OPENING STATEMENT OF HON. DANIEL MEUSER, CHAIRMAN OF THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.
REPRESENTATIVE FROM PENNSYLVANIA
Today's hearing is titled ``From Watchdog to Attack Dog:
Examining the CFPB's Chopra-Era,'' what one may describe as,
``Assault on Disfavored Industries.''
I would like to take a moment to thank the witnesses for
being here to discuss the actions of the Consumer Financial
Protection Bureau (CFPB) under the leadership of former
Director Rohit Chopra.
The CFPB was created to be a nonpartisan watchdog, an
agency tasked with protecting American consumers from
deceptive, unfair, and abusive financial practices, but under
Director Chopra, that mission was largely abandoned. The CFPB
ceased to be a pro-consumer agency and instead became an
ideological weapon used not to protect the public but to
pressure businesses into aligning with the CFPB's goals through
aggressive rules, enforcement, and supervision.
Chopra targeted entire sectors he disfavored, wielding the
agency's enforcement powers to intimidate and financially
exhaust companies that did not share his ideological
progressive vision for the marketplace.
One of the most troubling examples of this overreach was
the aggressive use of civil investigative demands, or CIDs.
CIDs are powerful legal tools that allow the CFPB to demand
vast amounts of documents, data, and testimony, often with
little to no justification or judicial oversight.
Under Chopra, the CFPB issued CIDs to effectively weaponize
the agency's authority to bury small firms in compliance costs
and reputational damage before any wrongdoing was even proven.
While a business can petition a CID, the decision on any
petition was ultimately at the discretion of the Director,
sending it back to the organization that issued it in the first
place. Unsurprisingly, Director Chopra denied 100 percent of
the petitions that were received. Under the first Trump
Administration, six petitions were granted to overturn CIDs.
For many businesses, especially small ones, the process of
responding to a CID is a very challenging task, often leading
to layoffs, loss of customers, and in many cases closures. One
of our witnesses here today will explain just how devastating
these CIDs were.
Under Chopra, the process became the punishment. The threat
of a CFPB investigation was less about compliance and more
about survival, especially for smaller businesses. This is not
consumer protection. It is a bureaucratic attempt at
intimidation, and it has no place in a system governed by the
rule of law.
I applaud President Trump for ending this campaign of
coercion at the CFPB. Businesses operating legally should not
have to fear their own government.
That is why, today, I have sent a letter to the CFPB's
Acting Inspector General, requesting a formal investigation
into whether Director Chopra consistently exceeded his
statutory, lawful authority. Congress must act to ensure that
the CFPB cannot be weaponized again.
Under the Trump Administration, legally operating, ethical
businesses no longer live in fear of the CFPB and their
punishment. Chopra's tenure has made one thing clear: Congress
must ensure the CFPB--or any agency, for that matter--can ever
again be weaponized for ideological purposes.
Of the countless banks and compliance officers, both large
and small, that I have spoken to over the last 2 to 3 years, I
have not heard from one that had anything positive to say about
Director Chopra and the CFPB's work. I have met with former
Director Chopra several times and told him about these
concerns, and it made no difference, and the CFPB continued its
crusade.
I look forward to hearing from the witnesses on how
Congress can help the CFPB return to its core mission of
protecting the American consumers from unfair and abusive
practices.
Sadly, the one investigating the abuses became the abuser.
Now I want to recognize my friend and ranking member of the
subcommittee, the gentleman from Texas, Mr. Green, for 4
minutes for an opening statement.
OPENING STATEMENT OF HON. AL GREEN, RANKING MEMBER OF THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.
REPRESENTATIVE FROM TEXAS
Mr. Green. Thank you, Mr. Chairman, and I acknowledge you
as a friend as well.
However, notwithstanding the fact that the title of this
hearing is ``From Watchdog to Attack Dog,'' I believe that a
better title for the hearing would be ``From Watchdog to
Lapdog,'' and ``How Trump's CFPB has Abandoned Consumers in
Favor of Corporations.''
It is not just the CFPB that is under attack, and we should
not view these things in a silo, because if we do, we will miss
the big picture. Federal agencies are under attack. We are
currently defunding the Department of Education, defunding the
Department of Health and Human Services (HHS), defunding the
Federal Election Commission (FEC), defunding the Department of
Housing and Urban Development (HUD), and defunding the Federal
Emergency Management Agency (FEMA).
With all of these agencies under attack, we should
understand that there is an effort afoot not only to defund the
CFPB, which is, of course, being done, but also to literally
remove from these agencies dollars--dollars--so that these
dollars can go to the pockets of the very wealthy in this
country.
It is not just from these agencies. The very essence of a
country is the ability for its citizens to have good
healthcare. We are removing dollars--dollars--from healthcare
so that persons who are very wealthy can have more money in
their pockets.
We seem to believe in this country that the poor can do
more with less, but the wealthy need more to do more. This is
an abomination and I believe that Trump's CFPB has not only
stopped initiating new investigations into abuses into the
financial industry, but it also has discontinued examinations
that are ongoing from Director Chopra's CFPB.
Most alarmingly, Trump's CFPB has taken the unprecedented
step--the unprecedented step--of rescinding settlements with
companies that the CFPB had negotiated following investigations
into consumer harm.
In April, Trump's CFPB announced a wide-scale reduction in
force affecting 90 percent of the agency's staff. That 90
percent of agency's staff cut will benefit persons who are very
wealthy.
This administration seems to believe that you can take from
the needy to support the greedy. I am not with that. I believe
that this country has been built upon the foundation of
agencies that are helping people.
The CFPB is at the very core of this, and we have to do
what we can to protect consumers. We do not want the CFPB to
become the agency for the financial institutions. It was for
consumers. It has now become an institution that is going to
protect financial institutions from consumers that are under
attack. This is unimaginable.
Finally, I want to mention something else as we move to
closure. Something has happened today that I cannot believe.
The Trump Administration has indicated that they will sue all
15 Federal judges in Maryland over an order that those courts
issued.
Rather than appeal the cases, the Trump Administration is
now suing the judges who rendered the decisions. We have
already heard the administration indicate that it would want to
have judges impeached for decisions that it disagrees with.
This administration is out of control. This administration
is causing the demise of democracy to take place before our
very eyes, and we have to stop it. We cannot allow American
democracy to become authoritarianism with an authoritarian
President.
I yield back the balance of my time.
Chairman Meuser. The gentleman yields.
The chair recognizes the ranking member of the full
committee, Ms. Waters, for 1 minute.
STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
CALIFORNIA
Ms. Waters. Thank you.
Today, my colleagues on the other side of the aisle are
holding yet another hearing to attack the Consumer Financial
Protection Bureau under former Director Chopra's leadership for
fulfilling his duties to protect consumers.
That Consumer Financial Protection Bureau returned $21
billion to harmed consumers. On the other hand, under Trump's
leadership, the agency has abandoned American consumers and the
dedicated public servants who protect them.
I am once again calling on Chairman Hill to bring Acting
Director Vought before this committee to explain the Trump
Administration's unlawful efforts to delete the Consumer
Financial Protection Bureau and fire 90 percent of its workers.
Where is the accountability, Mr. Chairman?
Unfortunately for consumers, who broadly support having a
strong Federal watchdog protecting them from financial rip-
offs, this Republican-led Congress is not providing it.
Mr. Green, I join you in my outrage and disgust at this
administration. They are trying to wear us out, and they are
almost doing it. Of course, none of the members on the opposite
side of the aisle are willing to stand up to----
Chairman Meuser. The gentlelady's time has expired.
Ms. Waters [continuing]. stop this mess.
I do not know if I will stop or not.
Chairman Meuser. The gentlelady is out of order.
We will now move to witness testimony.
Today, we welcome the testimony of Mr. James Kim. Mr. Kim
is a partner at Cooley LLP, where he advises clients on
compliance with Federal and State consumer financial laws and
regulations. Previously, Mr. Kim was a Senior Enforcement
Attorney at the CFPB. Mr. Kim holds a bachelor's degree from
Brown University and a J.D. from Cornell University.
We also have with us Ms. Jennifer Bassett. Ms. Bassett is
the Chief Executive Officer at Pacific Rim Alliance
Corporation, where she served for 17 years in several
leadership roles. She also serves on the board of INFiN, a
national trade group for consumer financial services, and CFSP,
a California-based trade association. Ms. Bassett earned her
bachelor's degree in mathematics from the University of Texas.
We also have with us Mr. Devin Watkins. Mr. Watkins is an
attorney at the Competitive Enterprise Institute, where he
evaluates regulations and develops strategies to curb over-
regulation. He holds a computer science degree from Stevens
Institute of Technology and a J.D. from George Mason
University's Antonin Scalia Law School; and with us is Ms.
Morgan Harper. Ms. Harper is the Director of Policy and
Advocacy at the American Economic Liberties Project. Ms. Harper
holds a J.D. from Stanford Law School, a master's degree in
public affairs from Princeton, and an undergraduate degree from
Tufts.
Thank you all very much for being with us.
Each of you will be recognized for 5 minutes to give an
oral presentation of your testimony. Without objection, your
written statements will be made part of the record.
Mr. Kim, you are now recognized for 5 minutes for your oral
remarks.
STATEMENT OF JAMES KIM, PARTNER, COOLEY LLP
Mr. Kim. Thank you, sir.
Chairman Meuser, Ranking Member Green, and members of the
subcommittee, thank you for inviting me to testify today.
My name is James Kim. I am a partner at the law firm
Cooley. I am presenting my own views today and not those of my
firm or any of its clients.
The CFPB has a critical mission--to protect American
consumers--and I believe in that mission. That is why I joined
the Bureau in 2012 as one of the first enforcement attorneys in
New York Regional Office.
Between working at the CFPB for 2 years and spending the
last 11 years in private practice working on matters involving
the Bureau, I have been immersed in agency matters over three
different administrations.
There is no question the CFPB, over the years, has
strengthened consumer protections since its inception, but some
of the Bureau's actions during the past administration exceeded
the boundaries of the laws and rules that it enforces.
Notably, the CFPB issued interpretive rules, guidance
documents, and advisory opinions that supposedly interpreted or
clarified Federal consumer financial laws but, in reality,
sought to change the substance of those statutes and rules.
These actions created confusion rather than clarity.
It started enforcement investigations and filed lawsuits to
create new compliance requirements rather than go through the
public notice-and-comment rulemaking process mandated by the
Administrative Procedure Act. This unilateral approach deprived
stakeholders, including other Federal agencies, State
lawmakers, and State regulators, from participating in policy
discussions directly impacting their jurisdictions.
The CFPB pressured companies to submit to the Bureau's
supervisory authority, its most powerful and least transparent
regulatory tool, under the threat of the Bureau exercising its
so-called dormant authority to examine companies that posed
risk to consumers.
Compared to other Federal agencies, the CFPB is still a
startup. Like other startups who have gotten off the ground, it
needs reminders to stay faithful to its mission and its core
principles, and it needs adjustments to better execute its
mission.
Most importantly, the Bureau should focus on engaging with
and gathering information from stakeholders at the ground
level. All CFPB functions, from supervision to rulemaking to
enforcement, should be driven by data collected from a wide
range of sources, rather than siloed, top-down decisions from
agency leadership.
Thank you again for the opportunity to testify today. I
look forward to any questions that you may have.
[The prepared statement of Mr. Kim follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Meuser. Thank you.
The gentleman yields back.
Ms. Bassett, you are now recognized for 5 minutes for your
oral remarks.
STATEMENT OF JENNIFER BASSETT, CHIEF EXECUTIVE OFFICER, PACIFIC
RIM ALLIANCE CORPORATION
Ms. Bassett. Thank you.
Chairman Meuser, Ranking Member Green, and members of the
subcommittee, thank you for the opportunity to testify before
you today.
My name is Jennifer Bassett. I am CEO of Pacific Rim
Alliance Corporation, a small, women-owned financial services
company based in Phoenix. For 36 years, we have provided small-
dollar loans and essential financial services to underserved
consumers. We are a State-licensed, federally compliant
business with no outside investors.
Our customers are everyday, working people who rely on our
services for short-term credit when traditional options fall
short. Our products help them afford urgent car repairs,
appliance repairs, and avoid utility shutoffs, overdraft fees,
or even eviction.
I am here today because our business, along with others in
the small-dollar-lending sector, were designated for
enforcement by the CFPB under Director Chopra's leadership. The
CFPB pressured our small, compliant business to the brink, not
because of any proven wrongdoing but due to a bias against our
industry.
We are a small company that is getting smaller. Since the
start of this targeted enforcement campaign, we have closed 35
percent of our locations and laid off a third of our staff. We
currently operate 30 branches across 5 States and employ 80
people.
At some of our lower-performing locations, as they
approached lease renewals, we were forced to make difficult
decisions, including closing branches we had successfully
operated for over 25 years. Rather than reinvesting to improve
underperforming branches, we had to divert resources, both
financial and human, to comply with burdensome demands by the
CFPB.
We have been the subject of an ongoing investigation by the
CFPB for 3 years, since July 2022. The Bureau has issued three
CIDs, each more burdensome than the last. None has been tied to
any specific allegation, consumer complaint, or exam finding.
Despite our full compliance with the first CID, which
included producing over 11,000 pages of documents and my
participation in an entire-day 8 hours of testimony, we never
received any follow up or feedback from the Bureau.
Rather than focusing their investigation, we received a
second sweeping CID demanding detailed data on every loan made
for a period of 6 years, as well as all internal
communications, all personnel files, and more. We were also
expected to review and produce 3.8 million emails. Still, no
violations were cited.
The third CID requested additional written responses and
multiple investigational hearings with employees.
Each time, we complied in good faith. We had to hire
outside counsel. We do not have in-house attorneys. The legal
fees and costs have now reached nearly half a million dollars.
A half a million dollars is an extraordinary burden for a
company of my size.
We petitioned the Bureau twice for relief. Both petitions
were denied by the very agency that issued the demands. There
is no neutral arbiter, no check on the Bureau's authority.
Director Chopra served as the judge, jury, and executioner.
Even worse, after submitting confidential financial data to
support the tremendous strain we were under in our first
petition, the CFPB published our sensitive business and
financial information while redacting their own most aggressive
CID demands. This kind of selective transparency has a chilling
effect on participation, and it intimidates businesses.
We have a history of working cooperatively with the CFPB.
We underwent full, lengthy examinations in 2015 and 2018 with
no violations of law, zero fines, and no penalties.
We suspect we were targeted, in part, because I
participated in the 2015 Small Business Regulatory Enforcement
Fairness Act (SBREFA) panel for the CFPB's Small Dollar Lending
Rule. When that rule was deemed unworkable and largely
rescinded, Chopra's Bureau shifted tactics, regulating not
through rulemaking but through enforcement. Multiple small
lenders like us were hit with nearly identical CIDs. This was
not a company-specific investigation; it was an intimidation
campaign against our industry.
Director Chopra has claimed that the Bureau was focused on
large participants and repeated offenders, but our experience
tells a different story. We are neither large nor a repeat
offender. Yet we have been hammered, our reputation damaged,
and our ability to serve customers weakened.
This is not how regulatory oversight should function in
America. Enforcement should be targeted, fair, and transparent,
not arbitrary or punishing.
The current CID process lacks procedural safeguards. That
is why I urge the subcommittee to support real, meaningful
reforms to this process, including supporting the bipartisan
CID Reform Act.
The CFPB should be a watchdog, not an attack dog.
Thank you, and I look forward to your questions.
[The prepared statement of Ms. Bassett follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Meuser. Thank you, Ms. Bassett, for your
testimony.
We now recognize Mr. Watkins for 5 minutes for his remarks.
STATEMENT OF DEVIN WATKINS, ATTORNEY, COMPETITIVE ENTERPRISE
INSTITUTE
Mr. Watkins. Chairman Meuser, Ranking Member Green, and
members of the subcommittee, I appreciate the opportunity to
speak to you today.
My name is Devin Watkins. I am an attorney at the
Competitive Enterprise Institute (CEI). CEI has advocated for
nearly 40 years for a more accountable government rather than
bureaucratic control so people can live freer, healthier, and
more prosperous lives.
Two years ago, I testified before this committee to express
serious concern about the structure and conduct of the Consumer
Financial Protection Bureau. I proposed reforms to the CFPB.
Shortly after my testimony, the Supreme Court granted a review
in Jarkesy and, last year, agreed with me that jury-free
administrative trials for the imposition of fines, like those
used by the CFPB, are unconstitutional.
The absence of a reform I proposed--that rules clearly
define unlawful actions before enforcement--led to the abuses I
will discuss today.
Regulatory enforcement abuse, like that which occurred at
CFPB, is just another form of prosecutorial abuse. A normal
prosecutor waits for a potential victim, examines the evidence
to see if a well-known violation of law occurred, and then
brings enforcement to protect that specific victim. The problem
occurs when prosecutors follow the old Soviet saying, ``Show me
the man, and I'll show you the crime.''
That chilling phrase reflects a regime where law is not a
constraint on power but a tool of it, where the decision of who
to investigate comes first and the legal justifications follow
later, where the government does not apply well-known rules, it
invents them for the occasion.
Sadly, this has become the reality of too many businesses
facing CFPB enforcement actions. Let me illustrate with three
concrete examples.
Consider the case of Comerica Bank, which CFPB sought to
penalize over consumer-call wait times. I know the CFPB
regulates banks, but there is no law or CFPB rule stating how
long is too long for a wait time. The agency simply declared
that the wait time was too long and sought to retroactively
punish Comerica for violating the new rules.
John Locke described freedom as having a standing rule to
live by, not to be subject to the inconstant, uncertain,
unknown, arbitrary will of another man. If a company cannot
know in advance what conduct it will be punished for, that is
not regulation; it is an ambush.
The second example involves Acima, Snap Finance, and the
broader rent-to-own industry. Such rent-to-own leases were not
previously treated as credit, but one day the Bureau simply
announced they were now subject to its authority as credit
products, and then, in violation of the ex post facto
prohibitions, or at least the spirit thereof, the CFPB fined
companies for transactions that occurred before the new
interpretation was announced.
Lastly, Townstone Financial is a small Chicago mortgage
company. The CFPB did not go after Townstone for denying anyone
a loan. There were no consumer complaints; so, what was CFPB's
issue? Townstone's owner, Barry Sturner, had a weekend radio
talk show. On the radio talk show, Mr. Sturner expressed
concern about crime in urban neighborhoods. CFPB targeted
Townstone Financial for his protected speech.
The CFPB then destroyed his business by claiming complaints
about neighborhood crime on the radio were really disguised
attempts to dissuade minority applicants from mortgages.
Facing a mountain of fines and after 7 years and spending a
million dollars to defend itself, Townstone was offered a
settlement for $105,000. That might sound big, but it is less
than it would cost to hire a private attorney to fight those
charges in court.
Townstone was defended by many great lawyers, including
Pacific Legal Foundation, an excellent nonprofit law firm that
defends many worthy causes. Townstone's costs could easily have
doubled but for the legal assistance provided pro bono, but,
still, the burdens of litigation were too much for Townstone to
continue.
Coerced plea agreements are far too common in today's legal
system. When people are facing millions in fines and offered a
settlement for less than what it costs to defend yourself, many
innocent people give in. A coerced agreement of an innocent
person is not a badge of honor for the prosecutors but a mark
of shame.
These cases represent a broader pattern where the CFPB has
brought cases for the purpose of stretching its authority.
Congress never gave CFPB authority to regulate consumer-call
wait times, comments on radio talk shows, or rent-to-own
leases. The agency just seized that power.
Fortunately, there is cause for hope. Under new leadership,
the CFPB has dismissed many of these abusive actions. It has
also tried to unwind the Townstone settlement, recognizing that
the enforcement violated the First Amendment.
Shockingly, a Federal judge has refused to let the agency
correct its own mistake. According to the judge, the people
cannot be allowed to select new leaders to reverse
constitutional violations by their government.
A President has the power to pardon even the most atrocious
terrorists and traitors, but for some reason an
unconstitutional settlement in a civil proceeding cannot be
vacated. This is wrong.
The rule of law is not a partisan issue. It is the
foundation of our Republic.
Thank you.
[The prepared statement of Mr. Watkins follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Meuser. Thank you, Mr. Watkins.
Ms. Harper, you are now recognized for 5 minutes.
STATEMENT OF MORGAN HARPER, DIRECTOR OF POLICY AND ADVOCACY,
AMERICAN ECONOMIC LIBERTIES PROJECT
Ms. Harper. Thank you.
Chair Meuser, Ranking Member Green, members of the
subcommittee, thank you again for the opportunity to testify
about the CFPB today.
Since its inception, the CFPB has enforced laws to protect
consumers and honest businesses. Today's hearing is about
attacks but let us be clear who is attacking American consumers
and competition: It is this administration's unleashing of
corporate lawlessness and the rejection of CFPB's true law
enforcement mission.
This mission is personal. Though I currently serve as the
Director of Policy and Advocacy at the American Economic
Liberties Project, a few years after the financial crisis I
left a corporate law firm to join the agency, appalled at how
private-equity-funded corporate giants profited from the crash
while so many communities in my home State of Ohio were still
reeling economically. I had heard this new agency was trying to
do something about it, and I wanted to help.
We wrote rules for prepaid cards and sued Wells Fargo for
opening millions of fake accounts in customers' names. Though
it garnered fewer headlines, I am also extremely proud of how
we looked out for special populations like older Americans. My
own 82-year-old mother lost an entire month's pension in a scam
involving prepaid cards--a painful violation too many American
families have experienced and then reported to the CFPB.
In fact, the CFPB has processed over 10 million consumer
complaints, returning, on average, over $1,400 each. The agency
has used every tool Congress bestowed to deliver real results,
returning $21 billion to over 200 million Americans and forcing
lawbreakers to pay more than $6 billion in fines.
Former Director Chopra continued this legacy of cracking
down on illegal conduct, whether perpetrated by Wall Street,
Big Tech, or newer companies. Under his leadership, the agency
confirmed that ``buy now, pay later'' lenders are credit
providers and subject to the same legal protections as credit
cards; the agency held data brokers accountable for how they
mismanaged consumers' personal financial information; and,
through the open banking rule, the CFPB expanded consumer
access to their own financial data, allowing companies of all
sizes to compete.
The agency took action to ensure fintech companies follow
Federal laws, cracking down on debanking and holding repeat
non-bank offenders like TransUnion accountable. Chopra's CFPB
also did not shy away from suing big guys, like Bank of
America, Apple, and Goldman Sachs, for numerous violations.
Acting Director Russell Vought, however, has veered
dangerously off this course since assuming his role in
February. He has taken a sledgehammer to the agency's
enforcement function. The CFPB has dismissed or withdrawn more
than half of its pending cases with no explanation. Talk about
arbitrary. Many of these were permanently dismissed.
Vought is letting J.P. Morgan, Wells Fargo, and Bank of
America off the hook for $870 million in fraud on the Zelle
platform and dropping a case against Capital One for cheating
consumers out of $2 billion in interest payments. It comes as
no surprise that both J.P. Morgan and Capital One donated to
the President's inauguration fund.
The current administration's CFPB has not just handed out
corporate pardons to their friends on Wall Street but also
reversed course on already-negotiated settlements, robbing
consumers blind. Chopra's CFPB ordered Toyota to pay $60
million for illegally raising borrowers' monthly car payments.
Last month, Trump's CFPB inexplicably terminated the agreement.
It is again of note that Toyota donated $1 million to the
President's inauguration.
As Americans continue to manage increased costs, the
current CFPB, along with the congressional majority, has rolled
back rules that would limit junk fees, including overdraft and
credit card late fees. Estimates suggest Vought and Trump's
rollbacks have already cost Americans $18 billion--almost as
much as CFPB has returned to the public since opening its
doors.
In the background of this destructive policymaking are CFPB
employees in limbo, punished for working to prevent any
American family from experiencing the pain of being cheated,
scammed, or made homeless by a faceless corporation that does
not give a damn.
After the worst financial crisis since the Great
Depression, Congress created the CFPB to ensure, ``all
consumers have access to financial products and services'' and
that markets are ``fair, transparent, and competitive.''
Chopra's CFPB fulfilled this congressional mandate to
protect American consumers, mitigate risk to our financial
system, and enforce the rule of law without fear or favor. It
is a mission 82 percent of Americans, including 77 percent of
Republicans, support.
Congress should push this administration to resume the work
of stopping lawlessness instead of enabling it. As household
debt teeters on $20 trillion and loan delinquencies rise, the
administration's reckless rollback----
Chairman Meuser. The gentlelady's time has expired.
Ms. Harper [continuing]. of the CFPB law enforcement
agenda----
Chairman Meuser. We will now turn to member questions.
Ms. Harper [continuing]. is something that threatens
financial stability.
Thank you.
[The prepared statement of Ms. Harper follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Meuser. The gentlelady's time has expired. Please
follow the rules.
We will now turn to member questions. The chair now
recognizes himself for 5 minutes.
Thank you for your testimony, all of you. Interesting
perspectives. Real-life examples of unbelievably abusive
overreach that have caused you to fly in from all over the
country when you could spend your time doing many other things,
but you want to come here and talk about the tyrannical crusade
taken within a government agency, and we are not going to stand
for it. This is America, and it is going to remain a free
society, not one where an agency feels it can do whatever the
hell it wants.
That is where we start.
Mr. Kim, in your view, was the Bureau's primary mission to
protect consumers through evenhanded enforcement of clear
rules? Was that pretty much----
Mr. Kim. Yes, sir.
Chairman Meuser. ``Yes, sir''? You----
Mr. Kim. Yes.
Chairman Meuser [continuing]. think their--well, did they
carry out the mission evenhandedly to protect consumers?
Mr. Kim. During the last administration, I think the record
is clear that certain actions exceeded its legal mandate and
its legal boundaries.
Chairman Meuser. Okay. Well, I guess that means that they
did things that were unlawful according to their scope and
their mission and their legal authorities.
Ms. Bassett, flying in from Phoenix, where you of course
would have better things to do, like helping to keep your
company alive and functioning, you have been under CFPB
investigation, which you expressed, and before that you had
been in regular contact with your State regulators. You are a
very regulated industry and business.
Would you describe those relationships with your State
regulators as fair and constructive?
Ms. Bassett. Thank you for the question.
Yes, our relationship with our State regulators has always
been great, and it is very collaborative and effective.
Chairman Meuser. Okay, so a big difference between your
State regulators that have been doing their business for a long
time--and then enter the Chopra era, and you had different
experiences, to say the least. Do you want to elaborate on
that?
Ms. Bassett. Thank you, Congressman.
Yes, it was extremely different. We received our first
civil investigative demand just out of the blue. We had been
through two prior examinations in 2015 and 2018. No fines, no
violations. Then all of a sudden, we just get this civil
investigative demand with no clear purpose.
The amount of data that they expected from us was just
overwhelming. It has consumed over half of my time for the last
almost 3 years.
Chairman Meuser. Last 3 years.
What sort of rationale do you give to these CIDs? What were
their purposes?
Then what were the results of these CIDs to your company's
reputation? Did it help you improve your relationship with your
consumers? Did it protect any consumers? Did it provide
reputational harm, personal burden, business disruption? Or was
there any glimmer of helpfulness in their oversight and
intrusive behavior?
Ms. Bassett. Thank you for the question.
There was absolutely no benefit to consumers based on this
investigation. It is still open, actually, today, but we have
never had a clear understanding of what they are looking for.
They asked for just everything we had. We kept trying to narrow
the scope and say ``Can we work this out?'' We tried to comply
the whole time, and it is just--I do not know what the end was
going to result in; we never got there.
Chairman Meuser. Thank you.
Mr. Watkins, you have vast experience, many years in this
industry, dealing with oversight bureaus, dealing with
government regulations. Yet you used the phrase ``show me the
man, and I'll show you the crime'' in order to describe the
Chopra CFPB.
So, you obviously believe that these tactics that were
being used, with the CID and everything else, were overly
aggressive. Could you elaborate?
Mr. Watkins. Yes. There are many times, I think, where the
CFPB has chosen what its targets are first before it has any
evidence that a crime has occurred or even that there is any
reason to believe a crime has occurred.
I really think the government needs to have some kind of at
least probable cause to believe there is a crime before it
creates enormous burdens and harm to these companies.
Chairman Meuser. All right. Thank you very much.
I yield back.
Now the gentlewoman from California, Ranking Member Waters,
is recognized for her questions for 5 minutes.
Ms. Waters. Thank you very much.
First, I would like to ask those who have come here to
undermine the Consumer Financial Protection Bureau, do you
believe that it should be deleted from government altogether?
Each of the three who have testified, do you want to eliminate
it altogether? Yes----
Mr. Kim. No, ma'am.
Ms. Waters [continuing]. or no?
Mr. Kim. No.
Ms. Waters. Yes or----
Ms. Bassett. Yes.
Ms. Waters [continuing]. no?
Ms. Bassett. Yes.
Ms. Waters. Yes or no?
Mr. Watkins. I would have Congress write the rules and
transfer its enforcement authority from the CFPB to Department
of Justice.
Ms. Waters. You made an interesting statement. You said
that President Trump ``has the power to pardon even the most
atrocious terrorists and traitors, but for some reason an
unconstitutional settlement in a civil proceeding cannot be
vacated.''
I am so happy that it cannot be vacated, because you are
right. You are absolutely right. He supports the terrorists. He
supports those who came to the Congress of the United States to
kill us all. Thank you for that, in the record.
Now let me go to our witness Ms. Harper.
The Consumer Financial Protection Bureau has returned $21
billion to consumers. Do you believe that alone should justify
the work that they are doing?
Do you believe that--in early May, Trump's Consumer
Financial Protection Bureau asked a Federal judge to scrap the
previously finalized medical debt that would take medical debt
off credit records and help 15 million people in the United
States with unjustly lowered credit scores due to medical debt.
The Consumer Financial Protection Bureau previously researched
this matter and found medical debt has little value in
predicting a consumer's creditworthiness.
Should someone who experienced an unexpected medical event
through no fault of their own deserve to end up with a damaged
credit score that prevents them from getting mainstream credit
or forces them to pay much more for a loan?
Ms. Harper. Thank you for the question, Congresswoman.
I think the $21 billion figure that the CFPB--the money
that CFPB has been able to return to consumers is evidence of
just how effective it is as a regulator of the consumer
financial markets.
I think the reason why it should continue to exist is
because Congress said so, and we should respect the rule of
law. It has not been a priority of this administration or the
leadership under Acting Director Vought, but that is something
that is a principle of this country. Regarding medical debt, I
am glad you mentioned it, because this has been a very
troubling development in this administration, seeing the lack
of support for doing something about this industry. We have
millions and millions of dollars and millions of consumers that
are now being caught up in this system of their debt now
informing--their debt from a healthcare system that has been
monopolized by corporate giants and has not been checked yet
through government action now informing credit decisions.
Really, what the result of this could be and a question
that this committee needs to be asking itself is, do we want a
system where a healthcare giant, like UnitedHealth Group, is
now determining who gets mortgages in this country or whether
you get a credit card?
That is the end result of this kind of reckless decision
making from this administration and not supporting the medical
debt rule, which would address some of the abuses that have
been happening in that industry.
Ms. Waters. Thank you very, very much.
You know that the chairman here today talked about rules,
follow the rules. He even made that point when he talked to
you.
Do you know and understand that the Consumer Financial
Protection Bureau Director should be brought, according to the
rules, before this committee every 6 months, and it has not
been done?
Why do you think they did not follow the rules?
Ms. Harper. It is a great point, because, yes, that is an
obligation that has not been fulfilled.
I think it is very interesting for all of us as panelists
to share our views on different consumer financial protection
policies, but the elephant in the room is, there is a guy that
is in charge of that right now, his name is Russell Vought, and
he should be here at this hearing explaining some of his
decision making.
I mean, I would also like to come back to this Townstone
case, because ``following the rules.'' What we had in that
case--a Republican judge who agreed with the settlement that
had been negotiated by the CFPB, a panel of judges that also
were Republican-appointed that agreed to it, and then this
administration that said, ``Oh, no, do not worry, we no longer
care whether fair-lending laws have been violated.''
``Follow the rules''? What are we talking about?
Ms. Waters. Wow. It could not be better stated. What are we
talking about?
I guess I will yield back the time so he can continue with
this hearing. All right. Thank you.
Mr. Watkins. Mr. Chairman?
Ms. Waters. I yield back.
Mr. Watkins. If I could have a minute?
Chairman Meuser. Time has expired.
We will now--the chair now recognizes the gentleman from
Georgia, Mr. Loudermilk, for 5 minutes.
Mr. Loudermilk. Thank you, Mr. Chairman.
Before I start with my questions, Mr. Watkins, I will yield
a little time for you to respond.
Mr. Watkins. I just wanted to correct the record. I did not
say the current President supported terrorists and traitors. I
was talking about any President's power, whether that is Biden,
Obama, or any President, to pardon terrorists and traitors,
such abusive people being given a second chance. Civil
penalties should also fall under the same provisions.
Mr. Loudermilk. Thank you, Mr. Watkins.
Ms. Waters.
[Off-mic.]
Mr. Loudermilk. Reclaiming my time. This is my time.
Mr. Kim, in your opinion, did the Chopra-era CFPB target
companies outside the financial services industry through
enforcement actions?
Mr. Kim. Yes, sir. I believe Mr. Watkins touched upon a few
examples.
One public one is the rent-to-own industry. It is not new;
it has been around for decades. About 46 States have rent-to-
own specific laws and regulations. It is also policed by the
Federal Trade Commission.
It is clear in the law that it is not an extension of
credit under the Bureau's jurisdiction, but the CFPB, under the
past administration, brought multiple enforcement actions and
lawsuits against that industry. It took that industry 4 years--
or the companies involved--4 years to be vindicated with a
dismissal in Federal court, with a decision by a district court
judge, not a dismissal by the Bureau.
Mr. Loudermilk. It was dismissed by the judicial branch
that there was nothing to the accusation. How many millions of
dollars were spent defending that?
Mr. Kim. I do not know, and I cannot say. Like I said, it
took several years to get that vindication.
Mr. Loudermilk. The industry obviously suffered, but would
it not be the consumer who ended up really bearing the costs of
those actions?
Mr. Kim. I presume so. Companies tend to pass on costs to
end users if there are costs imposed on them.
Mr. Loudermilk. That was not a whole lot of protection of
consumer finances, was it?
Mr. Kim. Not that I am aware of, especially----
Mr. Loudermilk. Okay.
Mr. Kim [continuing]. when States can police that industry.
Mr. Loudermilk. Right.
Mr. Watkins, did any Chopra-era CFPB regulations undermine
other Federal or State regulators' existing regulatory
authority?
Mr. Watkins. Yes. Comerica Bank that I was talking about,
they were directly regulated and under the oversight of the
financial services of the--in Department of the Treasury. The
CFPB went after them in a sense because they thought that the
Treasury Department was not being aggressive enough.
Mr. Loudermilk. Okay.
Ms. Bassett, how would you describe your engagement with
the CFPB's team in terms of your request to modify the various
CIDs, the civil investigative--I am forgetting the term----
Ms. Bassett. Demands.
Mr. Loudermilk. Yes. Thank you--the various CIDs they
served on you? In making those requests, you were not trying to
hide anything, were you?
Ms. Bassett. Thank you for the question, Congressman.
Absolutely not. We did try to work with them in their meet-
and-confer process, where we asked that they just narrow the
scope, because they were asking for everything that we had, and
the experience is just detrimental to a company my size.
When I said I wanted to delete the CFPB earlier, the reason
that I would even go that far is because my experience with my
company has been horrible. It has really hurt our company and
our reputation.
I have been through examinations with them with no issues,
but that was also so time-consuming and crazy, when we already
are State-regulated and examined by our States all the time.
Thank you.
Mr. Loudermilk. The CIDs we were talking about are civil
investigative demands.
Ms. Bassett. Yes.
Mr. Loudermilk. These are demands on your company that you
have to respond, whether you are guilty of anything or not. Are
they even--they are not even accusing you of anything.
Ms. Bassett. No, they were not. They issued these CIDs to
at least four or five companies in our industry with the exact
same notification purpose and the exact same document request.
It was not company-specific to me.
Mr. Loudermilk. So, they had no probable cause.
Ms. Bassett. Correct.
Mr. Loudermilk. They were just fishing.
Ms. Bassett. It was a fishing expedition.
Mr. Loudermilk. Which is a violation of the Fourth and
Fifth Amendment of the Constitution.
The Bureau's investigation of your company has taken 3
years. In that time and to this day, were you ever told of a
single violation your company is guilty of? You said ``no''----
Ms. Bassett. No.
Mr. Loudermilk [continuing]. correct?
Chairman Meuser. The gentleman's time has expired.
Mr. Loudermilk. Thank you, Mr. Chair. I yield.
Chairman Meuser. The gentleman yields.
The chair now recognizes Mr. Liccardo of California for 5
minutes.
Mr. Liccardo. Thank you, Mr. Chair.
Thank you to our witnesses for coming to testify.
Ms. Harper, I was very interested in your testimony,
specifically about specific actions that were taken by CFPB,
the Consumer Financial Protection Bureau, against companies
that subsequently were dismissed.
My understanding was, in November 2023, Toyota settled a
$60 million legal scheme that increased monthly car loan
payments on consumers.
You indicated Toyota was a contributor to President Trump.
Is that right?
Ms. Harper. Yes.
Mr. Liccardo. How much?
Ms. Harper. A million dollars, I believe.
Mr. Liccardo. In May 2025, the consent order that Toyota
agreed to was actually terminated by the administration. Is
that right?
Ms. Harper. Yes.
Mr. Liccardo. Is there much precedent for an administration
terminating a consent order that the opposing corporation
actually agreed to?
Ms. Harper. No. I think it is fairly safe to say that what
we are seeing from the current CFPB, led by Acting Director
Vought, is beyond any normal parameters of what we would expect
from a financial regulator.
Mr. Liccardo. Do we know anything about the $48 million
that was supposed to be returned by Toyota to consumers?
Ms. Harper. In terms of?
Mr. Liccardo. That consent order, was it actually--was any
of that money actually returned?
Ms. Harper. No, I do not think a dollar has been returned
yet.
When I said in my opening testimony that this is really
robbing consumers blind, this is money that should have been
going back to consumers who were harmed. Especially in this
period where we know that the American public is facing so many
challenges around the cost of living, it is really inexplicable
to be adding to that burden and prevent consumers from getting
more money.
The last thing I would add is: These are legal violations.
This is a law enforcement agency. We all should be encouraging
that. That should be a bipartisan issue, and the fact that it
is not saying a lot about who Russell Vought wants to benefit
in this administration--their friends.
Mr. Liccardo. Well, let us go to that in a moment.
Bank of America and J.P. Morgan were both under
investigation regarding the Zelle network, regarding a failure
to reimburse customers that were defrauded by scam artists, and
that action was taken to the CFPB. What was the result of that
action?
Ms. Harper. Those are also among the cases that have been
dismissed.
Mr. Liccardo. Bank of America contributed to Donald Trump
and his inauguration, did not he?
Ms. Harper. Yes.
Mr. Liccardo. Was it half a million dollars?
Ms. Harper. I believe so.
Mr. Liccardo. J.P. Morgan, another million dollars?
Ms. Harper. Yes.
Mr. Liccardo. Capital One, the evidence from the CFPB
indicated they may have cheated customers out of as much as $2
billion. How was--how is it that Capital One engaged in that
fraud?
Ms. Harper. Yes. What was happening in that case was that
Capital One was signing consumers up for accounts that they
said were going to be high-yield-interest accounts, that
consumers, by putting their money in those accounts, through
interest payments, would be able to earn some additional money,
and instead of actually doing that, they were keeping them in
lower-yield accounts and not telling them.
Again, just another example of straight-up taking money
away from people in this country that need it more than ever.
Especially when we are looking at an entity, an institution
like Capital One, talk about a repeated offender. Long litany
of legal violations.
That is why it was also very disconcerting to see from this
administration that they green-lit the Capital One-Discover
merger that is only going to increase Capital One's market
power and make it really difficult for small businesses and
consumers to get ahead.
Mr. Liccardo. Ms. Harper, Capital One contributed a million
dollars to Trump's inauguration.
Ms. Harper. Also true.
Mr. Liccardo. What happened as a result to the CFPB case?
Ms. Harper. They got their case dismissed.
Mr. Liccardo. I am puzzled as to why we are having this
hearing. As we are watching the defunding of the financial
police happening over the last several months and weeks, all I
have heard is criticism of whatever happened in the last
administration. I am sure there is plenty of criticism that is
legitimate against the last administration. I do not understand
why we are still spending time on whatever happened in the last
administration when we know what is happening under this
administration is so corrupt and so clearly undermining the
interests of every American consumer.
I hope that our next hearing is going to actually focus on
protecting American consumers and what we can do now and
prospectively with a CFPB that has been utterly gutted as
Republicans continue to defund the financial police.
I yield.
Chairman Meuser. The gentleman yields.
The chair now recognizes Mr. Haridopolos from Florida for 5
minutes for his questions.
Mr. Haridopolos. Thank you, Mr. Chairman. I appreciate this
conversation. It is one that has been happening way too often,
in the idea that this previous administration seemed to pick
winners and losers over and over again.
Let us just be clear: If the CFPB did not exist--it does--
if it did not exist, there are still 12 different Federal and
State regulators that could oversee these financial markets. As
many people even said after they created the CFPB, you could
have just consolidated all of this into the Federal Trade
Commission (FTC). After all, it has been around--as a history
teacher, I know this--since 1914 and the Progressive Era.
Let us make sure that this is not some ``Wild West'' we are
talking about here. There are 12--12--different agencies that
oversee these type of things.
What we have heard consistently in this very committee, as
both Mr. Moore and I are new members, is that this was
clearly--this agency was playing politics. That is the
frustration I think we are going through, is that they would
pick on folks who they necessarily did not like and they would
run them into the ground--run up expenses and make it very hard
for them to compete in an increasingly competitive world, and
so, I am glad to see we are having conversations like this.
Let us also be clear that the U.S. Supreme Court
aggressively told the CFPB that they violated the Seventh
Amendment. That was a recent Supreme Court decision.
Now all we are asking is, ``Hey, CFPB, would you mind
following the Administrative Procedure Act (APA) standards?''
That is a good idea so we could actually know what the rule
book is.
In this committee we have heard over and over again--it is
the reason why our Chairman, Mr. Hill, has been so effective.
He was saying, with things like cryptocurrency and the
blockchain, let us make sure we know who is actually going to
regulate it so out-of-control regulators do not get to pick
winners and losers. I think that is a commonsense thing to do.
Mr. Kim, let me ask you this with that premise: We saw the
violations of the Seventh Amendment. The Supreme Court ruled
very clearly on that measure. What are we doing now, as I think
that our previous questioner asked--what are we talking about
in the future? I cannot go in the past either, folks. Let us
talk about the future.
What can we do so we do not have these fishing expeditions,
and these people do not pick winners and losers before they
even get into the game? What have they done to make sure that
this does not happen again?
Mr. Kim. If we are looking forward, I think the guidelines
and rules are clear, and you have referred to them. There is
the Administrative Procedure Act. There are a host of
requirements for public rulemaking through a transparent
process.
I think that is your answer, sir, is that----
Mr. Haridopolos. Let me ask Mr. Watkins.
Mr. Kim [continuing]. the rules are there----
Mr. Haridopolos. Mr. Watkins, I would love to get your
opinion.
Mr. Watkins. We need to do more. The APA is not sufficient
here.
We should require that any kind of civil investigative
demand go before a judge to show that it is reasonable in its
scope and that it is supported by probable cause and allow the
individual or business to dispute that before the judge to
ensure that these businesses are protected from these enormous
burdens before they are forced to undertake them.
Mr. Haridopolos. I will just close with this, Mr. Chair.
I want to thank Ms. Bassett for coming in. These are not
easy, and I know that--these challenges you have had. I
appreciate your willingness to testify, because some people
like to play games in retribution, and it is very much the
wrong way just to do things.
Also I would mention the last thing we want to do in this
business is start getting into the discussion about who gave
money to who. I mean, I think it diminishes the quality of the
conversation we can have here.
What I am excited about is that we are taking a fresh look
at, whether it be the CFPB, whether it be how the FEC
regulates, or the Commodity Futures Trading Commission (CFTC)
regulates. That is, I think, the mission of our committee.
I am glad to see that our chairman here has done a great
job of bringing testimony forward, because I do not want to
litigate fights in the past either. I want to move this country
forward, and I am glad to see that we are taking a fresh look
about how we administer the APA and how we are going to--when a
company comes into play, that they feel like they are going to
have a fair umpire instead of someone coming in and picking
winners and losers, which clearly some of the folks before were
doing.
I am not here to litigate that, but I am here to litigate
the idea that we are going to use this committee effectively,
find out what the consumer is dealing with, and when they go
before one of these huge Federal administrative agencies, that
they feel like they are going to get a fair shake and that the
die has not already been cast.
Mr. Chairman, I applaud this oversight meeting, and I think
it is going to be very helpful as we move forward, once we
complete the work with bitcoin, cryptocurrency, and other
crypto-type measures.
Thank you, Mr. Chairman, and I yield back.
Chairman Meuser. I thank the gentleman for his remarks.
The gentleman yields back.
I now recognize Ms. Williams from Georgia for 5 minutes.
Ms. T4Williams of Georgia. Thank you, Mr. Chairman.
You all, as I prepared for this hearing, I was initially
very excited, because I thought maybe the hearing would focus
on oversight of the CFPB and I would finally get an answer
about all of the jobs lost and the consumer protection
investigations that have been halted after my Republican
colleagues stood by as the Trump Administration has gutted the
CFPB.
Then I read the title, ``From Watchdog to Attack Dog.'' I
guess my Republican colleagues are right about something: They
have consistently attacked the CFPB and consumer protection
since I have arrived on this committee. No matter what the
facts are, my colleagues on the other side of the aisle, they
just want to continue to attack the CFPB under the guise of
accountability.
Well, here are the facts. Congress has already placed
conditions on the CFPB to ensure that it is accountable. Now we
just need the Trump Administration to follow the law, which
seems to be a pretty high bar in this administration.
The CFPB Director is required to testify before this
committee twice a year. We have not had that first hearing yet,
you all, and it is almost July. It might have something to do
with; we still do not have a permanent director at the CFPB.
It is a shame that we are here today to help my Republican
colleagues feel like they care about accountability with this
sham of a hearing when we could and should be focused on
consumer protections.
Let us be real: This hearing is not about making the CFPB
work better. House Republicans are just hurt that former
Director Chopra prioritized the most important piece of our
financial system--the consumer--and not their billionaire
buddies.
Despite how some of my colleagues feel, the work of the
CFPB--well, the work that the CFPB did do before it was gutted,
and we are still dealing with that--but it was imperative for
my constituents in Atlanta, across the Fifth District in
Georgia, and across the country, in Democratic and Republican
districts because the CFPB is nonpartisan. Reducing excessive
junk fees, that is nonpartisan. Relieving the burden of medical
debt on consumer credit reports, that is nonpartisan. Combating
housing discrimination and holding banks accountable for
deceptive practices, that is nonpartisan.
These are consumer protections. Are we really describing
those actions as those of an attack dog? To me, those are
actions that are all critical to the financial well-being of
the American people--people that I fight for every single day
in Congress, people who are seeing prices skyrocket under the
Trump Administration, people who already could not afford to
buy a home, send their kids to college, or just get ahead
because of years of my Republican colleagues' blocking
investments in people and communities who need them most.
With the Trump Administration's lack of a consumer
protection agenda, he has already turned the consumers'
watchdog into a muzzled little puppy.
In my district alone, according to the Student Borrower
Protection Center's own data, the CFPB helped over 196,000
consumers find financial relief in Georgia's Fifth District.
That is not an attack dog. That is a watchdog--a watchdog for
the people.
I want to take this time to help American consumers
understand exactly what is happening now, now that we do not
have a consumer watchdog.
I will start with you, Ms. Harper.
Ms. Harper, I understand that you used to work at the CFPB,
and we thank you and your colleagues for your work and service
on behalf of the American people.
Georgia's Fifth District is home to 13 higher-ed
institutions and the largest consortium of Historically Black
Colleges and Universities (HBCUs) in the Nation. For many young
consumers in my district, especially first-generation college
students, they are taking out a loan for the first time to
finance their education. Students may also be opening a bank
account or getting a credit card for the first time on campus,
and this makes students a very captive market for financial
firms.
Ms. Harper, how are students currently at risk of being
targeted without protections from the CFPB?
Ms. Harper. Thank you for the question. Yes, your point
about being marketed when you are a young person, I know my
brother fell into one of those traps----
Ms. Williams of Georgia. I fell into those traps.
Ms. Harper. Yes. Yes. It used to be very bad before there
was a cop on the beat, and in order to continue to make sure
laws are enforced, you have to have people working at the CFPB
to supervise some of that conduct.
Right now, based on the decisions out of this
administration, we have seen the supervisory staff drop from a
few dozen in some cases for certain departments to just a
handful of people, that is not enough to keep track of what is
going on out there in the market to protect students.
If I may just clarify a couple of other points that have
come up because I think a lot of today's focus is that--
suggesting that there is some targeting, and Ms. Bassett,
though I have heard some of her testimony, I think it is
important to keep in mind, again, that the CFPB's mission is to
follow legal violations. Sometimes people who conduct and
participate in legal violations, it is not comfortable to go
through that process.
Ms. Williams of Georgia. My time has expired because this
conversation is so important in protecting the consumers. Mr.
Chairman, I yield back, and I look forward to having this
conversation as we continue to work on this committee to
protect consumers in this country.
Chairman Meuser. The gentlewoman yields. The chair now
recognizes Mr. Moore of North Carolina for 5 minutes.
Mr. Moore. Thank you, Mr. Chairman. This has always been an
intriguing subject for me because before being a Member of
Congress I was an attorney for 30 years. During those 30 years
I had cases over the time where I actually represented victims
who were defrauded, civilly defrauded, some actually criminally
defrauded, and I am a big advocate for consumer protection, but
I will tell you, under the former Director, under Direct
Chopra, the CFPB was essentially I would say fundamentally
reshaped to reflect a progressive agenda, prioritizing
aggressive enforcement over clear guidance and balanced
oversight.
The big injustice that always stuck out to me, and we have
talked about this before the committee hearings, was how like
rules are made up on the fly. They would be like press releases
that came out. Then the fundamentally flawed way that the
agency was funded was that it got more money based on the
number of fines and penalties and so forth that were leveraged.
I mean, that is just fundamentally unfair.
That is--and Mr. Haridopolos made the good point that
consumer protection has been the law before this monstrosity of
CFPB was ever dreamed up where you have had multiple agencies.
States have laws dealing with consumer financial protections,
with unfair and deceptive trade practices, other Federal
agencies that cover this and this you simply had an agency that
I would submit was a rogue agency, particularly in the last
administration.
I will just ask a couple of questions. I will start with
Mr. Kim. You have extensive experience with enforcement at
CFPB, as well as the Administrative Procedures Act. I have
asked this before, I just want to confirm, does the APA apply
to the CFPB?
Mr. Kim. It does.
Mr. Moore. Is agency guidance, is that a rule?
Mr. Kim. It is not.
Mr. Moore. Is a press release a rule?
Mr. Kim. No.
Mr. Moore. Is a simple statement by the Director, is that a
rule?
Mr. Kim. No.
Mr. Moore. Should a press release or statement by the
Director be the basis of any enforcement action?
Mr. Kim. I do not think so. I cannot think of a situation
in which it should.
Mr. Moore. I agree with you. My understanding is that kind
of thing was happening on a routine basis in the prior
administration.
Ms. Bassett, thank you for being here with us today. You
have experienced this abuse first-hand as a small business
owner. My understanding is your business was specifically
targeted by the previous Director, and you received civil
investigative demands. Can you explain what a CID is and what
it has cost your business dealing with this mess?
Ms. Bassett. Congressman, thank you for the question. Yes,
so the civil investigative demand, I was--it was unknown to me
until I received one in July 2022, but it is basically a
subpoena where they are asking you for an unbelievable number
of--for us, an unbelievable number of documents from our
company. The statement of purpose was very vague in general,
and it was the same--they were issuing them to everyone in
our--or lots of people in our industry. So the process was--it
is still ongoing for us, and it has been 3 years, and we spent
close to $500,000, and for my small business, that is just
crippling.
Mr. Moore. My understanding is that you, in effect--you
lost about a third of the value of your business; is that
correct?
Ms. Bassett. That is correct.
Mr. Moore. It just--it just shocks me, and frankly I wish
more Americans knew about this rogue agency and how it is just
wrong in terms of what it has done. I think that our
constituents back home expect us--they expect to know if they
are dealing with any level of Government, particularly the
heavy hand of the Federal Government, that there are rules in
place that protect them, that there is due process in place,
that there is not an incentive, if you will, for an agency to
go after them.
You had the entire, the entire funding stream, Mr.
Chairman, the way CFPB was arranged, they were incentivized,
they were incentivized to go out and actually levy these fines,
these penalties. That was the basis of their funding, and it
would be the same as if you asked--if a police officer got paid
more if he wrote you up for a bigger ticket or something, and
that is just a fundamentally flawed system. I think it goes to
show why this agency, frankly, should be abolished. We have
other agencies that can do this and have done a better job when
it comes to actually protecting consumers instead of just
trampling over people's individual rights.
I hope as we move through this session and as we tackle
some of the other serious matters this committee is charged
with dealing with, that this is something we will deal with.
With that, Mr. Chairman, I yield back.
Chairman Meuser. The gentleman yields back. The chair now
recognizes Mr. Fields of Louisiana for 5 minutes.
Ms. Fields. Thank you, Mr. Chairman, and Ranking Member,
and let me thank all of the witnesses for being here today. Ms.
Harper, I do have a question for you. Given your research on
financial industry practices, what do you anticipate will
happen to consumer protection if the CFPB is effectively
eliminated through workforce reduction or enforcement
sensation? What alternative mechanisms could protect consumers
from predatory practices that necessitate strong oversight, and
what would you recommend to this committee to preserve
meaningful consumer protection?
Then lastly, I mean, if you look at the number--the States
with the members of this committee, the complaints that have
been lodged to the CFPB, you have over a half a million in
Georgia, and you have over a million in Florida. With that,
looking at that as your basis, what would be your response?
Ms. Harper. Thank you for the question, Congressman. I
think it is an important question, especially as we have folks
that are reflecting on the past and what got us here.
Not having--the CFPB not having resources, not being
appropriately staffed, not really having any enforcement agenda
to protect the rule of law to speak of, which is what we have
seen under this administration, is laying the groundwork for
another financial crisis. It is interesting that so many of
your colleagues on the other side of the aisle are saying we
would love to have all of these resources focused on the CF--on
the FTC, I should say, that there are other agencies that can
handle this, that we can have these authorities scattered. That
was the situation before the financial crisis. We have played
that tune before and it devastated the lives of millions of
Americans.
I think it is also very interesting that they are saying
that because if there is so much respect for the FTC, it is
interesting that this administration has actually dismissed
Democratic commissioners from the FTC that were doing the
important work of some of that market monitoring and being able
to look into investigations of different practices that might
hurt consumers across the country.
Mr. Fields. Thank you. Let me ask a question to Ms.
Bassett. Small businesses historically create two-thirds of the
new jobs. In my district, I have 2,478 older Americans who have
filed complaints with the CFPB. How does eliminating
transparency help these folks have access to the broader
economic developments in our community?
Ms. Bassett. Congressman, thank you for the question. I
think I understand what you are asking, but through the--I want
to say that through the complaint--the CFPB has a huge data
base of complaints, and with that my industry, which is small
dollar lending, accounts for .08 percent, not my company, but
my industry, of those complaints. We do not--our customers are
very satisfied with our services. Maybe you can restate your
question.
Mr. Fields. Well, make it very simple, I mean, how does--
you understand the complaints that we have at the CF--the CFPB,
the Congressional Media Consumer Protection Bureau, you
understand the number of complaints we have nationwide of how
would eliminating that department help consumers?
Ms. Bassett. Thank you. As I said before, when I stated
that I wanted to, I did not believe in keeping the CFPB, a part
of that is just my personal experience which has just been, for
our industry, has just been such an overreach, and it just
seems like an out of control agency at times.
Mr. Fields. Do you feel it serves any meaningful purpose?
Ms. Bassett. For me, no. There was no--I was never accused
of any violation of law or consumer harm.
Mr. Fields. Not for you, but for the consumer.
Ms. Bassett. I am sorry. I do not really have a complete
answer for that. I think again, like the other gentleman said,
I think there are other agencies that are available to protect
consumers.
Mr. Fields. All right. Name one in the financial industry.
Ms. Bassett. We have our State agencies that regulate,
audit us, and also take complaints in as well; so, I believe
that our States have done a great job. We have been in business
for 36 years and so I believe that the States do a great job.
Mr. Fields. I yield back, Mr. Chairman.
Chairman Meuser. The gentleman yields back. The chair now
recognizes Ranking Member Green of Texas for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. Thank the witnesses for
testifying as well. Ms. Harper, I especially want to thank you
for your bold, brave and brilliant testimony. You are a
superior talent. BA from Tufts, JD from Stanford, MPA from
Princeton, clerked for a Federal judge, senior advisor to the
Director of the CFPB for some 3 years. You are a superior
talent, and I must tell you something, I am afraid for you. I
am afraid for you because of the vindictive nature that is
permeating this society emanating from the very top, from the
President of the United States of America.
There are some other people who would agree with me. I have
in my hand statements from 25 current and former employees of
the CFPB. I would like to place them in the record, if I may,
Mr. Chairman.
Chairman Meuser. Without objection.
[The information referred to can be found in the appendix.]
Mr. Green. These 25 people have not allowed their names to
be associated with these statements. They live in fear. These
are former employees, not just the current, people who are no
longer with the CFPB, afraid to be associated with the actions
that they believe to be unfair, and to some degree unlawful. We
will place this in the record.
I am afraid for you because I have in my hand an article
styled; Trump Administration Sues all 15 Maryland Federal
Judges Over Order Blocking Removal of Immigrants. Sued all 15
judges because he did not like the decision. Where are we
headed in this country when we refuse to honor court orders. It
is one thing for this to happen at some lower level by some
lawyer. This is the President of the United States of America.
He sets the tone and tenor for everything that happens in this
country.
I am afraid for you, and I want you to know this, I am
going to stand with you. If you receive anything that causes
you a good deal of consternation, causes some fear, I want you
to contact my office. I am not among the pusillanimous
politicians who are afraid to take a stand. I am going to
stand, and I appreciate the boldness and the brilliance of your
testimony.
Now, I have said earlier that what we are doing in this
country does not only impact the CFPB. The Department of
Education is being defunded. We cannot view these things in a
silo, one hearing, one bit of information, and then we go to
another. We have to connect the dots. Let us connect the dots.
Defunding the Department of Education, crippling the ability to
help our Nation's most vulnerable children. Defunding HHS,
which provides essential services, especially those regarding
Centers for Disease Control, Food and Drug Administration.
Defunding department known as HUD, Department of Housing and
Urban Development, at a time when Congresswoman Waters is
trying to help more people get into homes. Affordability is a
real problem in this country. She has legislation that would
help with affordability, especially for first-time home buyers.
Here is one that is personal, defunding FEMA. I live along
the Gulf Coast. I know what the severity of hurricanes is. I
know how they impact the lives of people. If we defund FEMA,
who is going to be there after a natural disaster to protect
people who are sometimes living literally in the streets of
life.
We have gone too far now. We have put the people who live
in the suites of life above all other people, especially those
who live in the streets. This country has to stop and take
notice of what is happening. This President is destroying
democracy in this country.
Sir, you said you wanted to make sure that rule of law is a
foundation. I respect you, Mr. Chairman, I am going to yield
back, but I am going to tell this gentleman, you are right, it
is, and it is being diminished by the President of the United
States of America. I yield back.
Chairman Meuser. The gentleman's time has expired. The
chair now recognizes the chairman of the full committee, Mr.
Hill of Arkansas, for 5 minutes.
Chairman Hill. Thank you, Chairman Meuser. It is good to
have our panel. Thanks for helping us analyze the CFPB 15 years
later. It is hard to believe that 15 years have passed by since
Dodd-Frank, and all of you bring your expertise to our members,
and so that is very very, very helpful.
Before I was in Congress, both in the brokerage industry
and in the commercial banking industry, I was subject on and
off to Federal regulation for years both in public companies
and private companies, and I have to tell you, and I always
tell my colleagues, I never once saw the Federal Government
ever shirk its consumer protection enforcement responsibilities
at any of the businesses I worked for. In fact, quite the
contrary. I mean, just intensively disciplining the businesses
I was associated with, enforcing the law, enforcing the
regulations. So you can count me as--I know there are
exceptions, and I know there are bad actors, and that is why we
have Federal law. That is why we have fair housing laws and
consumer protection laws and credit protection laws, and they
are all enforced, and they were enforced before the CFPB
existed. I want to be very clear about that.
The question here is not whether this committee is
interested in consumer protection. It is dedicated to consumer
protection. The facts here are how to do it and do it in the
right way, the appropriate way based on business strategy,
business size, business entity, and in conjunction with, what,
the Federal statute.
The title of Dodd-Frank that set up the CFPB, being true to
that statute and not inventing law out of whole cloth or
operating by regulation by enforcement. That is not the way our
State and Federal regulatory system has operated over the
decade.
Mr. Kim, thank you for your enforcement responsibility. I
looked at your resume. It looks like you were an early
enforcement attorney working for Director Cordray, who I had
the pleasure to know when I was first in Congress and you have
seen now as an attorney, outside attorney, good enforcement and
bad enforcement, or enforcement over past the fridge of
statutory authority. I want to talk about that a little bit.
Can you explain how the CFPB skirted the Administrative
Procedures Act process by stating that it would consider
discrimination as an unfair, deceptive or abusive practice,
UDAP, where we do not have the right defined terms here, we
have been talking about this for years, give me your assessment
on that.
Mr. Kim. Thank you, Chairman Hill. On that specific issue,
trying to impose antidiscrimination requirements through UDAP
authority, you do not have to take my word for it, there is a
district court in Texas that made that very ruling. Right. That
it was improper to basically legislate through an enforcement
action, and that district court struck down that section of the
UDAP manual that would impose these new kind of
antidiscrimination requirements outside of existing Federal
law, outside of ACOA, outside of the Fair Housing Act, and by
imposing it kind of through the backdoor as UDAP requirements
through a manual, which it is just a manual, like I can write a
manual, not through the APA process.
Chairman Hill. Right. This is such a good point. Look, we
have a system in place, let us use it. If you want to come
advocate through the Federal register and promulgate a rule, or
promulgate the interpretation of a rule, do it, but this
backdoor enforcement work, I just cannot condone it.
Ms. Bassett, do you believe that the CFPB under Former
Director Chopra engaged with you on a good-faith basis? As I
understand it, under Director Cordray, your work had been
reviewed carefully and you have been given a clean bill of
health more than once, and then suddenly it is overturned by
Director Chopra, and I do not think anybody thinks Richard
Cordray is a patsy for the right, so where is the consistency
and the application of CFPB procedures? Could you reflect on
that?
Ms. Bassett. Thank you, Chairman Hill. You are right, we
were thoroughly examined by the Cordray CFPB. They sent 10
examiners to our small corporate office for 10 weeks in 2015.
They visited 17 of our locations. At the end of that, again,
there were no findings of law, no fines, no penalties.
They came back in 2018, looked again, 10 examiners, they
were not there quite 10 weeks this time, but by the end of 2019
they had closed out that exam and there were no findings.
Then we are just going along dealing with our State
regulators, just business as normal, and 2022 in July we get
this CID out of nowhere. It is very vague as to its purpose and
we were--again, there were multiple of those.
Chairman Hill. Thank you. My time has expired. I hope you
will expand to that in your answer in writing. Chairman, thank
you for the hearing. I yield back.
[The information referred to was not submitted prior to
printing.]
Chairman Meuser. The gentleman yields back.
Ms. Waters. I ask for unanimous consent----
Chairman Meuser. The chair now recognizes the gentlelady
from Michigan----
Ms. Waters. To submit to the record----
Chairman Meuser. Ms. Tlaib for 5 minutes.
Ms. Waters. Unanimous consent, I request unanimous consent
to submit to the record--Mr. Chairman, I ask unanimous consent
to enter into the record a copy of section 1016 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act which
requires this committee to hold a semi-annual hearing with the
CFPB Director.
We have not done so since June 2024. I wrote Chairman Hill
reminding him of this requirement, and it is high past time
that committee Republicans follow the rules and hold the
current administration accountable. I have both documents to
submit to the record. I ask unanimous consent.
Chairman Meuser. Without objection.
[The information referred to was not submitted prior to
printing.]
Chairman Meuser. The chair now recognizes Ms. Tlaib of
Michigan for 5 minutes.
Ms. Tlaib. Mr. Kim, you are for-profit, right? For-profit?
Mr. Kim. I work for a for-profit.
Ms. Tlaib. Yep. Ms. Bassett, for-profit, right?
Ms. Bassett. Yes.
Ms. Tlaib. How about you, Mr. Watkins?
Mr. Watkins. I work in a non-profit.
Ms. Tlaib. You are non-profit.
Mr. Watkins. Yes.
Ms. Tlaib. Great. How about you?
Ms. Harper. Non-profit.
Ms. Tlaib. Okay. I only say this because some of the for-
profit people are like, poof the agency just sent us a notice
and we--like you all did not do anything wrong. Like it just
came out of thin air.
I want to apologize to you, Ms. Harper, I was not here.
This institution sometimes utters people that look like you and
I and try to dismiss us or silence us, and I apologize. I
seriously apologize for that. There is no sense of I think
really understanding, sometimes our lived experiences are the
passion that we have and the advocating for what is important.
This month, CFPB's acting head of enforcement, Cara
Petersen, as you might have read or heard, and maybe you guys
celebrated and had like pizza or something, and she quit in
protest of this administration's attempt to undermine the
bureau. I want to quote her email. She said, quote, never
before have I seen the ability to perform our core mission so
under attack. It is clear, she said, that the bureau's current
leadership has no intention to enforce the law in a meaningful
way.
Sadly, Ms. Petersen's departure should have come as no
surprise to many of my colleagues. I mean, the administration's
Acting Director Vought sought to fire, what, 90 percent of
CFPB's staff. They have dropped 22 pending enforcement actions
against corporate lawmakers. No wonder people that are
listening, because I hear my colleagues really--400,000
complaints by veteran servicemembers. I know for a fact that
the fraud and the schemes targeting the American people right
now is rampant. I know for a fact the bigger banks, their
business plans are, what, 50 percent junk fees and overdraft
fees. Corporate greed is like a disease in our country, and it
is hurting the American people.
You all are acting like CFPB is sitting there just like
picking on your donor friends. That is not--they are doing
wrong actions against people. They have to have actual evidence
and complaints, you all, to investigate.
One of the things that really is--they have overturned
almost 70 pieces of non-binding guidance which can help inform
consumers of their rights. Consumers are our residents.
Residents. People. Servicemembers. Seniors.
The administration has allowed the backlog of 16,000
consumer complaints to pile up and has actually returned
millions of dollars that were meant to compensate consumers
back to the companies that broke the law. Like the loan,
student loan servicers, I know they got the calls from their
residents. You see how they were wrong just really violating
the process and so forth, and they got caught. The student loan
services. They were supposed to give money back to--well, here
he comes and he is like, we are not going to do that anymore.
Ms. Harper, one of the things that, I know CFPB for me, I
always was explain to my residents, it is like the 911 for
consumer protection. I know romance fraud, I am being serious,
like these outside entities, but in there are the corporations
that set up plans and business plans because they know no one
is going to watch over them. I mean, CFPB did not just come
from thin air. It did not just go, oh, we are just going to do
this. It is because they were doing illegal and unlawful
actions that were hurting the American people. Like they needed
a babysitter. That is exactly what you all need is a babysitter
because you will never put our people, the best interests of
the American people before the interests of your for-profit
clients and schemes.
Ms. Harper talks about the importance of CFPB and the
reaction, I mean, right now the reaction out there in regard to
what is happening without any consumer protection.
Ms. Harper. Thank you for the question, Congressman. I am
glad you used the term 911 because when you look at some of the
complaints, and we have been talking about the consumer
complaint data base, you can actually feel the emergency and
urgent emotions that the American people are having with things
like----
Ms. Tlaib. They have no where to go.
Ms. Harper. Medical debt.
Ms. Tlaib. That is right.
Ms. Harper. Being hounded at their jobs to pay medical debt
that is not the right amount, that they had no control over
that now is influencing their employment.
The other thing I would note that has come up in terms of
the risks that are in the market now, and it is more important
than ever to have a CFPB that is staffed and focused on a
strong enforcement agenda is around big tech. We were talking
earlier about entities that are outside the financial industry.
Looking at big tech and how they are trying to move into
payments, this is something the Chopra CFPB was trying to
regulate and be able to have supervisory authority to see risk
there, and this administration has completely rejected and
the----
Ms. Tlaib. I want to--I only have 3 seconds because he will
cut me off. $3.5 billion in overdraft fees. I want residents
out there in Republican, Democratic, do not matter, $3.5
billion of overdraft fees that were illegal, they have just let
it go. We are not going to go ahead and enforce that. I just
want the American people to know exactly what is happening.
Chairman Meuser. The gentlelady's time has expired.
Ms. Waters. Mr. Chairman, a request to--recognition to
correct the record.
Chairman Meuser. The lady is recognized.
Ms. Waters. I indicated that President Trump, based on the
testimony of the----
Chairman Meuser. Madam Chairwoman, my apologies, time has
expired. Cannot be recognized.
Ms. Waters. I want to correct the record. I asked
permission to correct the record.
Chairman Meuser. Is there a unanimous consent request?
Ms. Waters. The request that I am making was I quoted the
gentleman who has----
Chairman Meuser. The gentlelady is not recognized.
Ms. Waters. Said President Trump has the power to pardon
even the most atrocious terrorists and traitors, but for some
reason----
Mr. Moore. Point of order, Mr. Chairman.
Ms. Waters. Settlement in a civil proceeding cannot be----
Chairman Meuser. The gentlelady is not recognized.
Ms. Waters. This is wrong and the gentleman tried to say
that he did not say President Trump.
Chairman Meuser. The gentlelady is not recognized.
Ms. Waters. That he had said any President. The record
needs to be corrected.
Mr. Moore. Mr. Chairman, point of order.
Ms. Waters. The gentleman has written in the----
Chairman Meuser. Ms. Waters, the gentlelady is not
recognized. You understand that.
Ms. Waters. I want the record corrected.
Chairman Meuser. Nobody would do this during your hearing.
It is inappropriate and out of order.
Ms. Waters. I want it to be corrected that the gentleman
said----
Chairman Meuser. I would like to thank our witnesses for
their testimony today.
Ms. Waters. The gentleman said----
Chairman Meuser. I request unanimous consent to enter two
documents----
Ms. Waters. That he did not say President Trump. He did say
President----
Chairman Meuser. Ms. Waters, this is highly inappropriate
and completely out of order.
Ms. Waters. It is in the record.
Chairman Meuser. Yes, nice. I want to thank our witnesses
very much. I request unanimous consent to enter two documents
into the record.
One is a statement from the Consumer Credit Insurance
Association.
The other document is titled, the Abuse and Vilification of
James and Melissa Carnes. Without objection, so ordered.
Without objection, all members will have legislative days----
[The information referred to was not submitted prior to
printing.]
Mr. Green. Mr. Chairman, I ask for unanimous consent.
Chairman Meuser. In which to submit additional--as soon as
I am finished, I will yield to you.
Mr. Green. Thank you.
Chairman Meuser. Written questions for the witnesses to the
chair. The questions will be forwarded to the witnesses for
their response, and I ask our witness to please respond no
later than July 31, 2025. This hearing is adjourned.
Mr. Green. Mr. Chairman, you were going to--my unanimous
consent. You were going to entertain it, my unanimous consent.
I ask unanimous consent that Ms. Waters' comments be entered
into the record as corrections.
Mr. Moore. I object.
Chairman Meuser. There is an objection. The hearing is
adjourned. We are not going to do it twice.
[Whereupon, at 11:36 a.m., the subcommittee was adjourned.]
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