The Full Extent of the CFPB’s Power—Years Later and Still Imbalanced

The Full Extent of the CFPB’s Power—Years Later and Still Imbalanced
handcuffs next to gavel

Only a few years ago, everyone was questioning what the CFPB was and how it would function. For the first time in the States history, we had a bureau with all the judiciary power possible. The CFPB is often the police officer, judge, and jury. A true to life Judge Dredd situation and their only goal is to bring down small businesses under the guise of standing up for the “little guy.”

The Consumer Financial Protection Bureau now has a power that far exceeds most intelligence and research agencies. They can perform an investigation on a company based on nothing more than hearsay or customer complaints. How many financial institutions receive regular complaints from their customers? Do those complaints warrant a full-scale investigation for harassment, fraud, misleading information, or worse? Contact our Connecticut criminal defense attorneys today.

What Does the CFPB Do?

The Consumer Financial Protection Bureau is an agency that investigates and addresses findings for financial fraud against consumers. They look at collections agencies, retail stores (which offer credit lines), financial service providers, and more. Not only do they investigate these companies, but they perform audits, and can even determine when a company must close in order to protect consumers.

The CFPB started due to the Dodd-Frank Wall Street Reform, where it was clear that there was a failure to due diligence toward the consumer. The idea is that the CFPB should promote fairness for things like credit cards, mortgages, and more. However, that quickly changed, and now more people fear the CFPB than any other regulatory body.

A consumer can submit a direct complaint to the CFPB through an online portal or in writing. There is no need for hard proof to launch an investigation or audit. For example, you can provide a complaint that a collections agency has called multiple times during one day, every day, for a week. That could be a violation of the FDCPA and, in turn, a CFPB concern. The consumer doesn’t need to prove their complaint, only file it.

Is the CFPB’s Power Unconstitutional?

As explained previously, a consumer only has to file a complaint. They can sit there and say, this is not fair, or this is harassment, and the CFPB will pounce. It is the image of a bad police department that’s only trying to fill jails rather than catching crooks. Now, of course, consumers do need protection, and that is where the CFPB came from, the issue that business owners have is the extent of damage that the CFPB or an investigation can do.

In fact, the fear of the power of the CFPB is so real that companies regularly pay hundreds of dollars for a third company to perform a mock-audit. That is where another company will come in and audit them the way the CFPB would in order to identify areas that will demand attention or change.

On many occasions, with a peak in these being through 2017, the CFPB shut down multiple companies at a time. They can request that executives step-down, or demand that their board members insist on a resignation. Always the threat is that the entire company will crumble.

It’s comparable to fit the CFPB and FTC’s power side-by-side, and still, the CFPB seems to have more sway. The biggest highpoint in their power is their ability to investigate without reasonable cause or even good suspicion. The CFPB could quite literally pick a loan business’s name out of a hat and perform an investigation.

Can The CFPB Shut Down Your Company?

It’s the big question on everyone’s mind. Will a CFPB audit shut down your company? In all essence, it’s very likely. The CFPB puts all the financial strain of an audit on the company, so you’re paying the CFPB to have their employees in your building, going through your materials, and issuing you citations or even criminal charges.

They have full orderly liquidation authority and can liquidate a company and more. It’s a scary prospect, and often it will result in charges against the business owner, and possibly key executives or managers who made high-level decisions.

Aeton Partners—24 Hour Criminal Lawyer

CFPB investigations are brutal and costly. Then you have the case that follows because it is rare that the CFPB goes into a company and doesn’t have some findings. It’s not only suspicious but should clearly attest to their “seek and destroy” mentality. The CFPB has destroyed the lives of many business owners and executives because they simply didn’t have anyone standing up for them.

Don’t get lost in this process. Fight allegations of fraud and other criminal activity relating to business activities with your own attorney. Reach out to Aeton Partners, the Connecticut criminal attorney office that helps business professionals when they need it most.

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