Roundup of Conflicted Characters Cheerleading the Predatory Lender Lawsuit Against CFPB

Washington D.C. – In recent days, a who’s who of right-wing pariahs, industry front groups, and self-interested politicians have come out of the woodwork to file amicus briefs in favor of a lawsuit before the Supreme Court brought by the predatory payday loan industry that seeks to gut the popular Consumer Financial Protection Bureau by striking down its independent funding structure – a transparent effort to bring an end to the agency and leave millions of consumers vulnerable to predatory financial industry behavior.

Government watchdog Accountable.US has been documenting the fringe elements that have come to the aid of predatory lenders, including: Mick Mulvaney, perhaps the most prolific industry shill and former Trump CFPB acting director; former top Trump CFPB official Eric Blankenstein who was ultimately ousted from his position after his old racist writings were exposed including his insistence that “the great majority of hate crimes were hoaxes.”; and John Eastman, seminal architect of President Trump’s insurrection strategy and former clerk of ethically-challenged Supreme Court Justice Clarence Thomas.

“This is all about shutting down an agency that has been successful at protecting everyday Americans from industry fraud and abuse, having recouped billions of ill-gained dollars. The proponents of this lawsuit are both people who’ve faced consequences from the CFPB for abusing consumers and industries that support them. Americans face the most consequential rollback of consumer protections in history if the Supreme Court rubber stamps this lawsuit brought by unscrupulous predatory lenders with a serious ax to grind,” added Zelnick.

WHAT YOU NEED TO KNOW ABOUT THE LATEST BACKERS OF THE PREDATORY LENDER LAWSUIT AGAINST THE CFPB: 

 Republican Members of Congress: On July 10, 2023, a group of 132 Republican lawmakers, including several members of the House Financial Services and Senate Banking Committee, filed an amicus brief in support of the payday industry’s lawsuit.

•     An Accountable.US review found that members of the House Financial Services Committee and Senate Banking Committee took a combined $277,000 from CFSA and the affiliated INFiN, a payday trade group comprising of CFSA members

 Americans For Prosperity: On July 07, 2023, the conservative Americans for Prosperity (AFP) filed an amicus brief calling the CFPB’s “budgetary independence incompatible with the Constitution” due to being “insulate[d]” the CFPB from Congressional oversight. 

•     The organization has a long history of attacking the CFPB, also urging Congress to roll back provisions of Dodd-Frank. In 2017, AFP urged the U.S. Senate to vote “YES” on S.J. Res.47 to disapprove of a CFPB arbitration rule “ban[ning] mandatory arbitration clauses for everyday financial products,” claiming it “removes customer choice, overburdens the court system, and forces consumers to pay more to solve their disputes.“”

•     In June 2018, Americans for Prosperity commended then-President Trump for signing into law S.2155, calling it “the most significant bank reform” since Dodd-Frank. AFP accused Dodd-Frank of “expand[ing] the federal government” and “creating unaccountable agencies like the Consumer Financial Protection Bureau.“
•     In June 2017, Americans for Prosperity “cheered” the House for passing the “Financial CHOICE Act 2.0” which was praised as “add[ing] much-needed accountability to the Consumer Financial Protection Bureau (CFPB).” This legislation was introduced by then-Representative and chair of the House Financial Services Committee Jeb Hensarling, who was appointed to AFP’s “advisory council” in November 2022. Throughout Hensarling’s time in Congress, he took over $5 million from the securities & investment, insurance, and commercial bank industries.
•     Meanwhile, a 2020 investigation by the Center For Media And Democracy found Americans for Prosperity received over $21 million from right-wing groups since 2014, including the Ed Uihlein Family Foundation and the Charles Koch Institute, among others.

The U.S. Chamber of Commerce: On July 10, 2023, the U.S. Chamber of Commerce led a financial industry-wide amicus brief in support of the CFSA lawsuit. The industry argued that the CFPB’s “funding mechanism violates the Constitution’s structural protections embodied in its separation of powers.“

•     However, the U.S. Chamber’s current President and CEO—Suzanne Clark—has served on the board of directors at TransUnion, which has been hit with multiple enforcement actions from the CFPB, since 2017. In 2017, TransUnion settled with the CFPB for $13.1 million in restitution and an additional $3 million in civil penalties for “deceptively marketing credit scores and credit-related products.” In 2022, TransUnion faced a lawsuit from the CFPB alleging the company violated the 2017 law enforcement order over its “deceptive marketing,” calling the company an “out-of-control repeat offender.” In response to the CFPB’s latest lawsuit, TransUnion released a statement calling the Bureau’s claims “meritless,” while attacking the actions of the “CFPB’s current leadership” as “seek[ing] headlines through press releases and tweets.”

ACA International: On July 10, 2023, ACA International—the largest trade group for debt collectors—filed an amicus brief in support of the CFSA’s lawsuit. ACA International urged the Supreme Court to “affirm the Fifth Circuit’s decision vacating the bureau’s payday lending rule.” Meanwhile, several ACA International members have been hit with over $71 million in fines and restitution by the CFPB since 2018:

• Just one month prior, the CFPB ordered ACA International member Phoenix Financial Services to pay a $1.675 million fine for attempting to collect consumer debt even after the debt “was not substantiated” and the consumer disputed its validity. 
• Between September 2015 and October 2020, ACA International member Encore Capital paid $25 million in civil penalties and over $42 million in consumer redress after collecting payments through false statements and robo-signed court documents and violating a previous consent order, among other allegations of misconduct.
• In November 2020, the CFPB ordered ACA International member Afni to pay $500,000 in fines for providing inaccurate information to credit reporting agencies and failing to properly investigate consumer disputes in violation of the Fair Credit Reporting Act and the Consumer Financial Protection Act.
• In April 2020, ACA International member Cottonwood Financial was ordered to pay over $1.3 million in fines and restitution after it violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the Truth In Lending Acts through its “marketing, servicing and collection [of] high-interest payday, auto-title, and unsecured consumer-installment loans.”
• In July 2018, the CFPB barred ACA International member National Credit Adjusters (NCA) from using certain debt collection practices and ordered the company and its former CEO to pay a $3 million civil money penalty each, with full payment “suspended subject to NCA paying a $500,000 civil money penalty and [CEO] Hochstein paying a $300,000 civil money penalty.”

Landmark Legal Foundation: In July 2023, the conservative Landmark Legal Foundation filed an amicus brief supporting the CFSA’s lawsuit against the CFPB. The group echoed other arguments that the CFPB was in violation of the separation of powers, calling the agency “a wolf” for its consumer protection efforts. However, the group has ties to the Club For Growth, which has financed the campaign of Byron Donalds (R-FL), a staunch opponent of the CFPB:

• Landmark board member John N. Richardson Jr. is the Executive Vice President and Chief Operating Officer of the Club For Growth. The Club For Growth is financially backed by right-wing billionaire Richard Uihlein and has continuously and repeatedly attacked the CFPB, even calling for its abolition. 
• The Landmark Foundation has also received funding from right-wing investor William A. Dunn, whose capital management fund has over $1 billion in assets under management and is seen as the foundation’s main source of funding. 
• Continuing to support Byron Donalds, the Club for Growth spent nearly $3,000 on flight and travel expenses for the Florida congressman in March 2023. That same month Donalds reiterated his opposition to the CFPB during a House Financial Services Subcommittee hearing as the sponsor of legislation to fully repeal the agency. Throughout his career, Donalds has taken over $117,000 from the group and individual contributions earmarked by the Club for Growth. Donalds is also a signatory of the amicus brief sent by the 132 Republican members of Congress.

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