CFPB Faces Suit Over Abuse of Power

The Consumer Financial Protection Bureau (CFPB), less than one week after Richard Cordray was confirmed as director, is now facing a lawsuit over its use of power. The lawsuit, filed by attorney Kimberly Pisinski along with legal support services firm Morgan Drexen. Many have been concerned over the power of the CFPB, which seems limitless. "We believe this work is within our authority and consistent with the ordinary course of a government investigation," a CFPB spokesperson told HousingWire. "Our goal is to determine whether companies are complying with the law and seek appropriate remedies where that's not the case." “We are concerned that CFPB lacks oversight from Congress and the President and also lacks internal checks and balances. We are asking the Court to declare unconstitutional the CFPB’s enabling statute and send this back to Congress to fix the structural defects,” said Venable LLP partner Randy Miller, the lead counsel for the plaintiff. Court documents indicate that the CFPB asked for access to Morgan Drexen documents, which the plaintiff alleges harmed the company’s reputation. The firm alleges that they can no longer secure a credit line at anything less than 22 percent. In 2012, Bank of America VP Susan Falkner questioned the CFPB, "Do they need the reams and reams and reams of data we're having to provide to them?" in an interview with PYMTS.com. By asking the court to review the constitutional structure of the CFPB, that will surely establish limits of the government agency. While not the first time the CFPB has faced litigation, after years of Dodd-Frank, it’ll be interesting to see what the court determines, in terms of potentially establishing boundaries with the CFPB.