CFPB to Make Organizational Changes

According to media reports, CFPB Deputy Director Martinez sent a memo to staff the week of July 11th announcing the following organizational changes:

• The work of the Students team and the Private Education Loan Ombudsman will be consolidated into a single Office for Student and Young Consumers that will be led by an Assistant Director for Students.
  
  
• To prepare for the likelihood of increased oversight demands from a Republican-controlled House and/or Senate following the mid-term elections in November, the Legal Division will divide the Office of Litigation and Oversight into two separate offices: an Office of Litigation and an Office of Oversight.  All of the Office of Litigation and Oversight’s current staff will remain in the Office of Litigation and continue to work on litigation matters.  The Office of Oversight will be staffed by new personnel.   
  
  
• The CFPB’s docket management function has been moved from the executive secretary’s office into the Legal Division.  This function includes the management of both the CFPB’s docket and public notice process and its ex parte participation in rulemaking.

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Of the three changes, the most significant is undoubtedly the creation of a new Office of Oversight.  This Office will likely be staffed by new hires, presumably persons with deep experience working on the Hill or lobbying Congress.  If Republicans take control of the House and/or Senate during the midterm elections, Director Chopra will likely be invited to appear at more than the hearings about the CFPB’s semi-annual reports at which he would ordinarily testify.  Those hearings are likely to be much more contentious than the hearings at which he has testified so far since the Democrats control both the House and Senate. 

Director Chopra’s actions have already generated strong criticism from one of the most powerful industry groups, the U.S. Chamber of Commerce, which has sent a letter to him identifying several of his actions that the Chamber opposes.  The Chamber has also joined with several financial institution trade associations in sending a White Paper to Director Chopra in which they urge him to rescind the recent revisions to the UDAAP section of the CFPB’s Exam Manual which re-defined a UDAAP violation to include discrimination in connection with non-credit products and services.  We have argued that this type of dramatic and impactful change should only be made by adhering to APA requirements, including notice and comment.  And, we have chronicled many other actions by the CFPB under Director Chopra that push the envelope in ways that have provoked industry criticism.