Within days of being sworn in, President Donald Trump has already pledged to cut business regulations by 75%. One way he is likely to fulfill that promise, at least in part, is by defanging a legacy of the 2008 financial crisis: the Consumer Financial Protection Bureau.
That could mean the functional end to the consumer watchdog, which has been responsible for returning roughly $11.8 billion to some 29 million consumers since its inception in 2011, according to data from the bureau. That's an average of $407 returned to each affected consumer, affecting roughly 9% of the U.S. population (assuming no single consumer was a victim in more than one case).
The agency was conceived by a group of consumer advocates including Elizabeth Warren (then a Harvard Law School professor and congressional advisor, and now a senator from Massachusetts), partly in response to reports of deceptive mortgage lending practices that helped precipitate the housing crash. Designed to safeguard consumers in their dealings with the financial-services industry, the CFPB has made moves to curb abuses in the payday, student, and auto lending industries. The agency has also focused on predatory lending practices that target low-income consumers that can ill afford their loans.
But Republican leaders have long tried to check the CFPB, arguing that the agency is flawed, too powerful and not accountable to elected officials. Currently, the bureau is funded by the Federal Reserve, and therefore doesn't report to elected leaders. Most recently, Senators Ben Sasse (R-NE) and Mike Lee (R-UT) called for replacing the director of the CFPB with a multi-member panel that can be controlled by Congress.
"Director [Richard] Cordray has vigorously supported the unconstitutional independence of the CFPB," Lee said in an early January statement."Considering the damage CFPB has done to credit unions and community banks, President Trump should act quickly to remove the director."
The word on the street is that the Trump administration wants Cordray out—even if the legality of firing the director is still up in the air, Politico reports.
In light of the CFPB's potential end and the debate over the conflict between business and consumer interests, Fortune looked back at the bureau's six-year tenure so far, reviewing some of its major actions and priorities.
Wells Fargo came out the good child after the financial crisis.
And then it wasn't.
In September 2016, the CFPB revealed that Wells Fargo employees had opened 2 million phony accounts without consumer permission, leading to unexpected fines and charges showing up on client's statements totalling $2.6 million, or $25 per person. The general public was outraged, as were government officials, causing then-CEO John Stumpf to resign.
Well Fargo's $100 million fine to the CFPB was the largest the agency had ever called for. Wells Fargo paid $185 million in total to various government agencies. (The saga continues for Wells Fargos, with other scandals erupting in the wake of the news.)
In a somewhat similar case, the CFPB accused PayPal of signing consumers up for credit lines they had not asked for. PayPal was ordered to pay consumers $15 million, and was fined $10 million.
For-Profit Colleges and Student Loans
Targeting unfair student-loan practices has been high on the bureau's list of priorities.
In 2014, the bureau sued Corinthian College, alleging that the for-profit chain touted bogus job prospects to lure low-income students into taking out private loans to cover tuition. Those loans often came with higher-than-average interest rates, and the students were more likely to default. When a student defaulted, Corinthian would strong-arm the borrower into making a repayment, using tactics including withholding the student's diploma. The CFPB called for over $500 million in relief for borrowers.
In September, the CFPB ordered for-profit college chain Bridgepoint Education to refund over $23.5 million, saying the college deceived students into taking loans that were more expensive than advertised.
In 2014, Bank of America and FIA Card Services allegedly charged 1.9 million consumers for credit monitoring and credit reports, though consumers never received the credit card add-ons. The CFPB ordered Bank of America to pay $727 million in consumer relief.
The CFPB has dubbed payday lending a "debt trap" for its unusually high interest rates. A typical two-week payday loan may come with an annual percentage rate ranging from 260% to over 780%, according to the CFPB. By comparison, credit card APRs usually range between 12% to 30%. Additionally, payday loans are mostly taken out by those who are least likely to be able to afford the additional interest expense.
In July 2014, the CPFB ordered payday lender ACE Cash Express to refund consumers $5 million for pressuring consumers into a "cycle of debt." The bureau obtained a copy of the lender's training manual, showing a physical circle in which consumers who cannot repay their loans to ACE must take out another short-term loan.
The bureau also proposed rules to limit the industry in mid-2016. They included forcing lenders to review whether borrowers have enough income to make the payments and still pay for living expenses. The rules haven't been enacted, however, and their prospects are uncertain under a Trump administration.
In 2013, the bureau ordered Ocwen, which specializes in subprime or delinquent loans, to relieve homeowners of $2 billion worth of loan obligations. Ocwen was also ordered to refund $125 million to foreclosure victims.
According to the order, Ocwen had driven troubled borrowers toward foreclosure rather than its alternatives, and also forced insurance on homeowners—even if Ocwen knew that the client already had adequate home-insurance coverage.
Discriminatory Lending Practices
In conjunction with the Department of Justice, the bureau has also fined lenders for discriminatory practices.
National City Bank was called to pay $35 million for charging Black and Hispanic borrowers with higher mortgage loan pricers than white borrowers with the a similar credit score between 2003 to 2008.
In 2013, the CPFB and DOJ jointly ordered Ally Bank to pay $80 million in damages to minority borrowers, saying that the bank had charged Black, Hispanic, Asian, and Pacific Islander borrowers higher interest rates. The case affected over 235,000 minority borrowers.