February 6 – Read the newsletter below for the latest Mortgage Banking and Consumer Finance industry news, written by Ballard Spahr attorneys. In this issue, we dive into the new administration’s executive orders, proposals, and actions, and their effect so far.
- This Week’s Podcast Episode: Alan Kaplinsky’s ‘Fireside Chat’ with Kathy Kraninger, Former Director of the CFPB During Trump 1.0
- This Week’s Podcast Episode: The Impact of the Election on the CFPB: What to Expect With Supervision and Enforcement During Trump 2.0
- President Trump Fires Rohit Chopra as Director of the CFPB and Appoints Treasury Secretary Bessent as Acting Director
- President Trump Orders Regulatory, Hiring Freeze
- CFPB, DOJ Take Action in Redlining Cases
- Led by California MBA, Five Banks Provide Mortgage Relief for Fire Victims
- The Changes Begin: Trump Administration Takes Slew of Actions in the Labor and Employment Field
- Home Equity Contracts: The CFPB Weighs in
- CFPB Should Encourage States to Educate Consumers, Not Enact More UDAAP Statutes
- The CFPB Adjusts HMDA Asset Exemption Threshold
Today’s podcast episode is a repurposing of Alan Kaplinsky’s “fireside chat” with Kathy Kraninger, the Director of the CFPB during the second half of President Trump’s presidency from December 2018 until January 2021. (This was originally the first half of a webinar we did on January 6, 2025, which was entitled “The Impact of the Election on the CFPB – Supervision and Enforcement.” The January 6 webinar is Part 2 of a three-part series. Next Thursday, we will release the second half of that webinar, which will feature Ballard Spahr partners, John Culhane and Mike Kilgarriff, who will take a deep dive into the expected changes in CFPB supervision and enforcement during President Trump’s second term in office.)
During her “fireside chat” with Alan, Kathy discussed the following things:
- How she was nominated by Trump to be the Director and succeeded Mick Mulvaney, the acting director appointed by Trump to succeed Richard Cordray as Acting Director;
- Organizational and other changes made by Mulvaney and/or Kraninger, including a hiring freeze, appointments of new heads of departments, etc.;
- The practical impact on CFPB operations of the U.S. Supreme Court’s opinion in the Seila Law case in which the Court held that the President had the right to remove the CFPB director without cause;
- Her priorities as director, including her regulatory, supervisory, and enforcement agendas;
- Her policy statements on “abusiveness”, supervisory expectations, and COVID-19;
- Her thoughts on what she anticipates will change at the CFPB once a new acting director chosen by Trump succeeds Rohit Chopra; and
- Her thoughts on whether Congress should restructure the CFPB’s governance and funding.
The “fireside chat” provides stakeholders in the CFPB insight into what may happen at the CFPB during Trump 2.0. There will, however, be some important differences between the circumstances that existed during the transition from Cordray to Mulvaney to Kraninger during Trump 1.0 and the transition from Chopra to a new acting Director during Trump 2.0. At the time when Mick Mulvaney became Acting Director, there were no pending lawsuits challenging CFPB final regs and other actions. During Mulvaney’s term in office, a trade association of payday lenders sued the CFPB challenging the CFPB’s payday lending rule and, in particular, its “ability to pay” requirement. The acting director appointed by Trump will inherit multiple pending lawsuits against the CFPB challenging many of the regs issued by the CFPB under Rohit Chopra’s last two years as Director. The acting director will need to develop legislative (Congressional Review Act), judicial and regulatory strategies for dealing with the slough of regs, proposed regs and other written guidance issued by Chopra. The acting director will also need to quickly decide what position the CFPB will take with respect to the defense raised in at least 13 enforcement lawsuits claiming that the CFPB has been disabled from conducting business since September 2022 when there was no longer any “combined earnings of the Federal Reserve Banks” – a prerequisite to the Federal Reserve Board funding the CFPB under the Dodd-Frank Act.
Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, Alan Kaplinsky, hosts the discussion.
A link to the episode can be found here.
Links to our blogs containing links to our about our re-purposed December 16 webinar appear here and here. The first podcast consists of Alan Kaplinsky’s “fireside chat” with David Silberman who held senior positions at the CFPB for almost 10 years spanning the Directorships of Cordray, Mulvaney, and Kraninger. Mr. Silberman had an insider’s view of the transition of the CFPB from Democratic leadership to Trump 1.0 which he expects to be similar to what happens in the transition from Chopra to Trump 2.0. The second podcast consists of presentations by Ballard Spahr partners John Culhane and Mike Kilgarriff who discuss what they perceive as the regulatory agenda of the CFPB during Trump 2.0.
Consumer Financial Services Group
Our podcast show features John Culhane and Mike Kilgarriff, partners in Ballard Spahr’s Consumer Financial Services group. They discuss what supervision and enforcement will look like under a new acting director/director appointed by President Trump. This episode is a repurposing of the second half of a webinar that was produced on January 6. On January 23, we released the first half of the webinar, which consisted of Alan Kaplinsky’s “fireside chat” with Kathy Kraninger, the former Director of the CFPB during Trump 1.0., linked here.
With respect to supervision, we consider, among others, the following issues with respect to the CFPB’s leadership under Trump 2.0:
- Will it be business as usual or more relaxed?
- Will it focus on compliance with the federal consumer financial services laws and less on UDAAP?
- Will there be reduced staffing and fewer exams?
- Will there be fewer PAAR letters and more use of MRAS and MRIAs?
With respect to enforcement, we consider, among others, the following issues with respect to the CFPB’s leadership under Trump 2.0:
- Will there be an exhaustive review of all existing investigations and lawsuits and a dismissal of those which involve “regulation by enforcement” or “pushing the envelope”?
- Will they focus more on fraud and scams and less on UDAAP?
- What position will they take on whether the CFPB has been unlawfully funded because the Federal Reserve Banks have had no combined earnings since September 2022?
Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, Alan Kaplinsky, hosts the discussion.
To listen to this episode, click here.
Consumer Financial Services Group
Although many pundits speculated that President Trump would appoint Russell Vought as Acting Director once Vought is confirmed by the Senate to be Director of OMB, the CFPB reported today that, on January 31, President Trump actually appointed Treasury Secretary Scott Bessent to be acting director. (The Federal Vacancies Reform Act authorizes the President to appoint as an acting director of a federal agency someone who has already been confirmed by the Senate for a position in another agency.)
Does this playbook sound familiar? This is what happened during Trump’s first term when Richard Cordray resigned early in Trump’s term and Mick Mulvaney, who had been confirmed by the Senate as Director of OMB, was appointed as Acting Director of the CFPB until the Senate confirmed Kathy Kraninger as the next Director of the CFPB.
Shortly after the announcement of Chopra’s firing, Professor Emeritus Hal S. Scott of Harvard Law School published an op-ed in The Wall Street Journal calling on President Trump to “shut the CFPB down.” Here is an excerpt from his op-ed:
“As I pointed out in these pages in May, the bureau is operating illegally. Congress mandated that it be funded by the earnings of the Federal Reserve, but there have been no earnings since the Fed began incurring losses in September 2022 due to rising interest rates. These losses currently total $219.6 billion. The CFPB’s defense, in 13 pending enforcement cases where defendants have raised the illegality of funding, is that “earnings” really means revenue, an absurd claim under accounting standards. It is telling that the Fed, the source of illegal funding, has been silent on the issue.
Since the bureau is operating illegally, the president can close it immediately by executive order. The order should declare that all work at the CFPB will stop, that all rules enacted since funding became illegal in September 2022 are void, and that no remaining rules will be enforced.”
Our blog and podcast show, Consumer Finance Monitor, have extensively covered the CFPB’s funding issue. This included a discussion I had with Professor Scott about his May, 2024 op-ed in The Wall Street Journal. With the change in administrations, this seems like a propitious time to bring the CFPB funding issue to a head. While there would almost certainly be a legal challenge to President Trump issuing an executive order as urged by Professor Scott, there is no point in ignoring an issue of such paramount importance.
It should be noted that Professor Scott is not calling for the elimination of the CFPB altogether. He is calling for the cessation of its activities until Congress rectifies the CFPB’s funding issue, presumably by subjecting the CFPB to Congressional appropriations, just like the Federal Trade Commission. Bills to do just that have been introduced by Representative Andy Barr (R-KY) (the Taking Account of Bureaucrats’ Spending (TABS) Act, which actually has been reintroduced) and by Representative Keith Self (R-Tex) and Senator Ted Cruz (R-Tex) (the Defund the CFPB Act)).
President Trump Orders Regulatory, Hiring Freeze
President Trump on Monday issued an executive order that prohibits most federal agencies from issuing proposed rules until an administration-appointed agency head reviews the regulation.
The President also imposed a hiring freeze at most federal agencies through another executive order.
The executive orders do not expressly exclude independent agencies, such as the CFPB. However, any Trump-appointed independent agency head would be likely to follow them.
The order governing rules requires agencies to withdraw any rules that have been sent to the Federal Register but have not been published in order to allow Trump-appointed agency heads to review them.
It is unclear when a Trump-appointed CFPB acting director will be in place. President Trump almost certainly will fire CFPB Director Rohit Chopra since he has not tendered his resignation and administration officials dislike the aggressive regulatory regime adopted by the bureau since he has been the director. However, President Trump did not take that action in his first day in office.
The executive order governing rules states that federal agencies should consider postponing, for a period of 60 days from January 20, i.e., until March 21, the effective date for any rules that have been published in the Federal Register or any rules that have been issued in any manner to allow administration officials to review any questions of fact, law and policy that might arise.
Federal officials imposing that 60-day delay should consider opening a comment period to allow interested parties to comment on issues of fact, law and policy, the order states. If more than 60 days are needed to review those comments, federal agencies may extend that period.
If the CFPB decides to follow the executive order, once an acting Director is in place, several agency rules could be affected.
For instance, the bureau last month issued a final rule prohibiting the listing of medical debt on credit reports, effective March 17. The executive order would provide a few more days in which to review that rule.
Technically, the final rule that would limit the overdraft fees that large financial institutions may charge consumers appears to be outside of the scope of the executive order, even though it was published in the Federal Register on December 30, because it won’t take effect until October 1, 2025. However, in the spirit of the executive order, the CFPB may decide to review it in the same 60-day period as well, or simply to review it without regard to that 60-day period, and it and actions like it may be the subject of a future executive order directing review, to eliminate any uncertainty.
Similarly, the CFPB issued a final rule that extends certain Truth in Lending Act (TILA) requirements to Property Assessed Clean Energy (PACE) transactions. The effective date of that rule is March 26, 2026. The Economic Growth, Regulatory Relief, and Consumer Protection Act (Act), enacted in 2018, directs the CFPB to prescribe regulations that apply TILA ability-to-repay requirements to PACE transactions, and apply the TILA civil liability provisions to violations of the requirements. The CFPB final rule more broadly applies TILA requirements, with certain revisions and exemptions, to PACE transactions, so it may also be a candidate for review.
The CFPB also has proposed a rule banning companies from using contract clauses that the bureau said limit fundamental freedom, including those that waive a consumer’s legal rights and fine print that suppresses speech. Comments on that rule are due April 1, 2025.
On hiring, President Trump issued an executive order stating that no federal civilian position that was vacant at noon on January 20 may be filled and no new positions may be created. administration officials also must, within 90 days, develop a plan to reduce the size of the federal government. Then, the hiring freeze would be lifted.
Consumer Financial Services Group
CFPB, DOJ Take Action in Redlining Cases
The CFPB has taken action against the Draper & Kramer Mortgage Corp. (DKMC) based on allegations of discriminatory lending activities that, according to the CFPB, discouraged homebuyers from applying to the company for home mortgage loans in majority-Black and Hispanic neighborhoods in the Chicago and Boston areas.
The CFPB alleged that from 2019 through 2021, DKMC, a nonbank mortgage lender based in Downers Grove, Illinois, engaged in redlining, and that this resulted in the company significantly underperforming its peers in lending activity in the Chicago and Boston areas. Specifically, the CFPB alleged that DKMC:
- Focused mortgage lending activity in majority-white neighborhoods. In particular, the CFPB alleged that the company had no offices in majority- or high-Black and Hispanic neighborhoods in Chicago and Boston, and that the company’s outreach centered on majority-white neighborhoods.
- Discouraged mortgage applicants from pursuing properties in majority-Black and Hispanic neighborhoods.
The consent order does not provide for the typical remedies contained in recent redlining consent orders, likely because, according to the complaint, DKMC ceased originating residential mortgage loans and wound down its mortgage lending operations in 2024. If approved by the U.S. District Court for the Northern District of Illinois, Draper would be required to refrain from engaging in mortgage lending activity for five years and pay a $1.5 million penalty.
Separately, the Justice Department has announced that The Mortgage Firm, a nonbank mortgage lender headquartered in Altamonte Springs, Florida, has agreed to pay $1.75 million to resolve allegations it engaged in lending discrimination by redlining predominantly Black and Hispanic neighborhoods in neighborhoods in the Miami-Fort Lauderdale-West Palm Beach, Florida, Metropolitan Statistical Area (Miami MSA).
According to the complaint, the company located its offices predominantly in white neighborhoods and failed to develop referral networks within Black and Hispanic neighborhoods. As a result, according to the DOJ, The Mortgage Firm generated mortgage loan applications in predominantly Black and Hispanic neighborhoods in the Miami MSA at rates far below peer institutions. As is common in DOJ and CFPB redlining matters, the DOJ considered peer institutions to be bank and nonbank mortgage lenders that received between 50 percent and 200 percent percent The Mortgage Firm’s annual volume of home mortgage loan applications.
If approved, the proposed consent order, filed in the U.S. District Court for the Southern District of Florida, would require The Mortgage Firm during the five-year term of the order to:
- Conduct a community needs assessment and use that assessment to design future loan programs, marketing materials, and outreach efforts in the Miami MSA.
- Provide $1.75 million for a loan subsidy program to offer affordable home purchase, refinance, and home improvement loans in predominantly Black and Hispanic neighborhoods in the Miami MSA.
- Conduct a detailed assessment of its fair lending program in the Miami MSA.
- Enhance its fair lending training and staffing, including by having a director of community lending on staff,
- Expand outreach and advertising efforts by maintaining an office in a majority-Black and Hispanic neighborhood in Miami-Dade County, and by translating its website into Spanish.
- Improve connections with the community and build referral sources in predominately Black and Hispanic neighborhoods by providing four outreach events per year, six financial education seminars per year, and partnering with one or more community organization to increase access to credit in predominately Black and Hispanic neighborhoods in the Miami MSA.
The DOJ has entered into numerous redlining consent orders with mortgage lenders since announcing the initiative to combat redlining in October 2021, and the CFPB has also been active in this area. Both consent orders were announced during the waning days of the Biden administration, so we will have to wait and see how the Trump administration handles existing redlining enforcement matters, and to the extent to which new redlining enforcement matters will be initiated.
Richard J. Andreano, Jr. and John L. Culhane, Jr.
Led by California MBA, Five Banks Provide Mortgage Relief for Fire Victims
Led by the California Mortgage Bankers Association, five lenders have made commitments to provide mortgage relief for the victims of the California wildfires.
The five institutions are Bank of America, Citibank, JPMorgan Chase, U.S. Bank, and Wells Fargo.
The banks will offer up to a 90-day grace period on mortgage payments, 90-day waiver of late fees, and 60- to 90-day moratorium on new foreclosures for property owners whose structures were damaged or destroyed. In addition, institutions will not report late payments of forborne amounts to credit agencies.
“We will continue to work with the Governor’s Office and the Legislature as they evaluate additional needs and strategies for relief and recovery,” the California MBA said. “Mortgage bankers will remain a key partner in the weeks, months, and years ahead as Los Angeles residents work to rebuild and restore their communities.”
Governor Gavin Newsom’s administration also is working with other financial institutions, and external stakeholders, which in addition to the California MBA also include the California Bankers Association, and the California Credit Union League, all of which have expressed their support for these relief efforts. In addition, the Department of Financial Protection and Innovation is surveying state-chartered financial institutions to confirm additional commitments in the coming days.
“These financial protections will enable residents to concentrate on taking care of their immediate needs rather than worrying about paying their mortgage bills,” Newsom said.
The Changes Begin: Trump Administration Takes Slew of Actions in the Labor and Employment Field
As anticipated, immediately upon his inauguration, President Trump took swift action in the labor and employment arena. His initial appointments and executive orders left no doubt that his administration will make an abrupt and definitive break with his predecessor.
President Trump first appointed new leaders to the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB), and then took additional actions aimed at halting and reversing many Biden-era initiatives and policies. In perhaps the action that garnered the most publicity, he issued an executive order dismantling federal diversity, equity, and inclusion (DEI) programs, including a repeal of Executive Order 11246 governing affirmative action for federal contractors and subcontractors, including plans to target certain private sector organizations.
At the EEOC, Andrea Lucas, the only current Republican commissioner, was appointed acting chair. Though Commissioner Lucas must grapple with a five-seat commission slated to hold a Democratic majority through 2026, employers can look to her track record to anticipate the agency’s likely shift in priorities.
During her tenure with the EEOC, Commissioner Lucas frequently has taken issue with employers’ DEI programs, reflecting the opposition to such programs by many members of the new administration. In line with other members of the Trump administration, Commissioner Lucas also publicly opposed various guidance issued by the EEOC during the Biden administration. She raised concerns regarding the EEOC’s final regulations for the Pregnant Workers Fairness Act, arguing that the agency’s interpretation of the statute led to overly broad protections. She also took issue with the agency’s advice related to gender identity protections in the EEOC’s final workplace harassment guidance. Religious freedom is also expected to become an agency priority, as Commissioner Lucas has expressed interest in bolstering protections against religious discrimination.
Consistent with these positions, upon her appointment, Commissioner Lucas stated that her priorities will include “rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.”
At the NLRB, in December, former chair Lauren McFerran failed to receive Senate confirmation for a second five-year term. Had she received the appointment, the board would have retained a Democratic majority until 2026. Instead, President Trump tapped Marvin Kaplan, the only sitting Republican member of the board, as the chair of the agency. President Trump will also be able to appoint two new board members, cementing a Republican majority for years. Employers should expect the new board to work swiftly to undo many of the controversial decisions issued during President Biden’s term and which greatly broadened protections for employees and unions.
President Trump did not take immediate action to fire the general counsels for the EEOC and NLRB, moves that had been widely anticipated for his first day in office, although those actions are expected soon. Once made, the moves will further shift those agencies away from their Biden-era policies toward, to some extent, more business-friendly approaches with some significant caveats evident in the President’s initial executive orders.
In his first week in office, President Trump issued a torrent of orders, including ones that directed the U.S. Department of Labor and the EEOC to recognize only two sexes when enforcing anti-discrimination laws, eliminated the federal government’s DEI policies and programs, placed federal DEI workers on leave, ordered a return-to-office mandate for federal workers, and reversed dozens of executive orders issued by his predecessor and prior Democratic administrations. Indeed, President Trump rescinded President Lyndon Johnson’s 1965 Executive Order 11246, which banned discrimination by federal contractors and subcontractors and required them to maintain affirmative action programs for women and minorities. President Trump further ordered the heads of “all” federal agencies to submit proposed strategic enforcement plans to “deter DEI programs or principles,” and eliminate illegal discrimination allegedly wrought by those programs. This will include identification of up to nine (9) private sector employers (including publicly traded companies, large educational institutions, foundations and other nonprofits, and bar and medical associations) for potential compliance investigations.
Ballard Spahr’s Labor and Employment Group is monitoring new developments from the second Trump administration and regularly issuing alerts and advising employers across the nation on the far-reaching changes enacted by the administration.
Home Equity Contracts: The CFPB Weighs in
If there was any doubt about how the Consumer Financial Protection Bureau (CFPB) (under current leadership) feels about what it calls “home equity contracts” (also known as shared appreciation agreements, shared equity agreements, home equity investments, among other names) its actions last week make it clear.
Among the flurry of issuances, enforcement actions and guidance coming out of the CFPB in the lead up to January 20, the bureau took aim at home contracts with i) the issuance of a Consumer Advisory warning consumers about the risks of these types of agreements, ii) the issuance of an Issue Spotlight, which similarly addressed potential risks to homeowners and provided a detailed summary of how these types of products typically work and how their features compare other home equity products, and iii) the filing of an amicus brief in Roberts v. Unlock Partnership Solutions AOI, Inc. (No. 1:24-cv-1374 (D.N.J.) wherein the CFPB argues that the particular product at issue is a residential mortgage loan subject to TILA because the homeowner had the right to defer payment and because the product is not an investment plan (which the commentary to Regulation Z excludes from the definition of credit) because the issuer of the contract does not have a meaningful risk of loss.
Interestingly and, perhaps surprisingly, neither the Consumer Advisory nor the Issue Spotlight take on the issue of whether these products are, or should be treated as, loans, although the CFPB (under its current leadership) appears to have signaled its general position in its amicus filing.
It is unclear what impact these efforts will have on how investors view or value these products, or how state regulators decide to treat these products, although we note that several states, including Connecticut, Maryland, and Washington, already have amended their statutes and/or issued regulations making clear that these types of products are considered residential mortgage loans. Regardless of how the CFPB ultimately may come out on treatment of these products, we can expect state regulators to continue to focus on these products and expect some number of them to follow the lead of Connecticut, Maryland, and Washington and regulate these types of products as residential mortgage loans.
CFPB Should Encourage States to Educate Consumers, Not Enact More UDAAP Statutes
Earlier this month, the CFPB issued a report titled Strengthening State-Level Consumer Protection. The report argues, among other things, that states should “[r]evitalize private enforcement” by promulgating additional UDAAP laws and regulations that permit consumers to file “representational and “organizational” actions against companies because the widespread use of arbitration clauses by companies has “severely constrained consumers” ability to enforce the law.” The CFPB obviously is still smarting from the fact that in 2017 Congress repealed its final rule that would have prohibited the use of class action waivers in consumer arbitration clauses. Because the Congressional Review Act does not permit the CFPB to reissue a rule that is substantially the same as the repealed rule and faced with the possibility that the new Trump administration will adopt less aggressive enforcement policies, the CFPB is passing the anti-arbitration baton to the states. It does so with an increased hostility to arbitration. While the final rule concluded that arbitration is not per se harmful to consumers or the general public, the CFPB report denigrates arbitration altogether, asserting that it is “forced” on consumers and that arbitral proceedings are conducted “in secret before a private judge the company selected.”
It is regrettable that the CFPB is urging states to create new ways for consumers to avoid arbitration. As we have previously observed, the Bureau’s 728-page empirical study of consumer arbitration, issued in March 2015, showed that arbitration is faster and less expensive than class action litigation and results in greater recoveries for consumers. In particular, the CFPB found that consumers who prevailed in an individual arbitration recovered an average of $5,389, and the entire arbitration process was concluded in an average of 2-7 months. By contrast, consumers who received cash payments in class action settlements got a paltry $32.35 on average after waiting for up to two years, while their lawyers recovered a staggering $424,495,451. The last thing consumers need is more statutes and regulations that permit plaintiffs’ attorneys to devour their clients’ monetary recoveries. Yet the CFPB report urges states to include generous attorney fee shifting provisions in any new representational and organizational legislation. It is unseemly for the CFPB to give advice to states on how to increase the powers of plaintiffs’ attorneys to bring claims under state law.
Contrary to the CFPB report, arbitration agreements are not “forced” on consumers. Most agreements provide consumers with an unconditional right to reject the arbitration provision and afford them 30 to 60 days to do so in order to give them time to consult with family, friends or their own legal counsel. Nor do companies unilaterally “select” the arbitrator. Consumer arbitrations are typically administered by prominent third-party organizations such as AAA, JAMS, or NAM whose rosters are replete with arbitrators who are distinguished members of the bar and retired federal and state court judges. The administrators strictly enforce due process rules that require arbitrators to be neutral and give consumers the same opportunity as companies to select them or object to their appointment. Finally, while the report criticizes arbitration for being confidential, the CFPB forgets that in the past it has encouraged its own employees to use alternative dispute resolution to resolve workplace disputes precisely because it provides “confidentiality” as well as "faster and less contentious results” than court litigation.
State legislators and regulators should reject the report’s mean-spirited and baseless attack on arbitration and look for opportunities to educate consumers about the many benefits they can derive from arbitrating rather than litigating disputes they have with companies. The CFPB itself is also in a prime position to do so. It has both the money and the resources to mount a robust arbitration education program, but it has previously lacked the will to do so. In its Spring 2024 Annual Report to Congress, the CFPB described in detail the resources it has available when it wants to educate consumers:
The CFPB regularly engages in outreach with external stakeholders, including consumer advocates, civil rights organizations, industry, academia, sovereign governments, and other government regulators and agencies to educate or communicate …. The CFPB achieves its educational objectives through publication of proposed and final rules, Advisory Opinions, and interpretive rules; Compliance Bulletins and CFPB Circulars; policy statements; requests for information; press releases, blog posts, podcasts, videos, brochures, social media posts, and website updates; amicus briefs; and reports …. Additionally, CFPB staff deliver speeches, panel remarks, webinars, and presentations …; and participate in smaller meetings and discussions with external stakeholders, including international, federal, sovereign, and state regulators and agencies, industry, academia, and consumer and civil rights organizations. During the reporting period, the CFPB also issued a range of content available to the public and to market participants …
That was in the context of fair housing issues. By contrast, the CFPB has never spent a single dollar or devoted a single minute to educating consumers about how they can benefit from arbitrating disputes with companies. We urge the CFPB in the new administration to have its Consumer Education and External Affairs division put arbitration on the agenda so that consumers receive a more balanced understanding of their dispute resolution options.
Alan S. Kaplinsky and Mark J. Levin
President Trump Continues to Reshape the NLRB
Two weeks after his inauguration, President Donald Trump continues to make unprecedented moves to impact the National Labor Relations Board (NLRB).
Trump Ousts NLRB Acting General Counsel
Since Inauguration Day, President Donald Trump has worked to reshape the NLRB by firing General Counsel Jennifer Abruzzo, Board Member Gwynne Wilcox, and now acting General Counsel Jessica Rutter. These removals have handicapped the decision-making power of the NLRB, which now has just two members and lacks the necessary quorum to issue decisions. This prevents a Democrat-majority board, which continued to exist until Wilcox’s removal, from issuing decisions that run counter to the changes that President Trump wants to make in the board’s approach. In removing Wilcox, President Trump directly challenges the statutory protections that typically shield board members from being removed without cause. The constitutionality of President Trump’s executive power to remove independent agency officials will undoubtedly be tested in courts and could impact the future of the NLRB and U.S. labor law.
The Board Moving Forward
The Board now consists of two members, Democrat David Prouty and Republican Marvin Kaplan, and has three vacant seats. This will allow the President to fill those slots with republican nominees and return the board to a republican majority. However, the board will not be able to issue decisions until the Senate confirms at least one new member.
Employer Takeaways
Although the board currently lacks the quorum required to issue decisions, the NLRB Office of the General Counsel’s Field Offices will continue their normal operations of processing unfair labor practice cases and representation cases. Regional directors will process petitions for election and administrative law judges will issue decisions on unfair labor practices. But, cases pending before the board will be at a standstill. While Biden-era precedent remains controlling, and field offices will be bound to follow it, we expect to see swift action to reverse many of the decisions issued by the board over the last four years, once board seats are filled.
Ballard Spahr’s Labor and Employment Group will continue to monitor the latest changes to the NLRB. We regularly assist clients in updating their policies and practices to be compliant with the recent developments to U.S. labor law.
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