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The Consumer Financial Protection Bureau’s enforcement division will be under new leadership for the third time during the Trump administration after acting director Cara Petersen resigned Tuesday, saying in a farewell email that “the bureau’s current leadership has no intention to enforce the law in any meaningful way.”
The Trump administration is seeking to cut 90 percent of the CFPB’s workforce and has put the brakes on about 20 active enforcement cases, Bloomberg Law said in breaking the story of Petersen’s departure.
The New York Times, which also obtained Petersen’s farewell email, said she took over as the acting head of enforcement after her predecessor, Eric Halperin, resigned in February.
Petersen has worked at the CFPB since it was created in the wake of the 2007-2009 financial crash and Great Recession.
“I have served under every director and acting director in the bureau’s history and never before have I seen the ability to perform our core mission so under attack,” Petersen wrote to her colleagues.
“It has been devastating to see the Bureau’s enforcement function being dismantled through thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements that let wrongdoers off the hook.”
The CFPB did not respond to Bloomberg Law’s request for comment.
Under the leadership of acting Director Russell Vought and Chief Legal Officer Mark Paoletta, the CFPB has not only halted active enforcement cases, but moved to vacate or weaken several finalized settlements, Bloomberg Law reported.
The CFPB’s unprecedented attempt to undo a settlement in a fair lending case that the government reached with a Chicago mortgage broker last year would establish a “dangerous and destabilizing precedent” if granted, according to fair housing and consumer protection groups opposing the move in court. The judge in that case hasn’t ruled on the CFPB’s request.
Last month the CFPB knocked nearly $2 million off of a fine that international remittance company Wise had agreed to pay to resolve claims that it advertised inaccurate fees and failed to properly disclose exchange rates and other costs.
Although Wise is still on the hook to pay $450,000 to about 16,000 consumers who were allegedly overcharged, it will pay a revised fine of $45,000, rather than the $2.025 million that it had originally agreed to pay in a consent order.
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