Incredibly Opaque Process at the Unaccountable CFPB
Washington, D.C. – Congressman Keith Rothfus [PA-12] today questioned Consumer Financial Protection Bureau (CFPB) Director Richard Cordray regarding the Bureau’s lack of transparency and accountability during a Financial Services Committee hearing entitled “The 2016 Semi-Annual Reports of the Bureau of Consumer Financial Protection.” Congressman Rothfus expressed frustration at the Bureau’s continued refusal to provide documentation that would explain the Bureau’s process for identifying uncompensated victims of financial fraud and for determining the amount of compensation distributed from the Bureau’s Civil Penalty Fund.
Rothfus referenced a case involving Global Client Solutions (GCS), a debt-settlement payment processor, in which GCS was allegedly involved in facilitating the collection of illegal upfront service fees. The Bureau reached an agreement with GCS in August of 2014 requiring the firm to pay $6 million in relief to consumers and a $1 million civil penalty. The CFPB did not hold responsible, however, the 208 debt-settlement companies that allegedly wronged their customers. The CFPB then allocated $107.9 million from its Civil Penalty Fund to compensate eligible victims of these firms that contracted with GCS for eligible uncompensated harm.
Director Cordray failed to clearly explain the basis by which the CFPB identified victims and assessed the appropriate level of damages. The Bureau has refused for months to provide Congress with requested records regarding the GCS case.