CFPB Finds Few Problems As ‘Expedited’ Reviews Surge
By CU Today Staff —
WASHINGTON—The Consumer Financial Protection Bureau gave largely clean reviews to most companies it examined earlier this year, with more than half receiving an expedited review that typically signals only minor problems and little risk of penalties, Reuters reported.
The CFPB resumed examinations in the spring after the Trump Administration suspended most agency work after taking office. Roughly 70 companies were selected for examination this year—about half the usual number—and most spring examinations were deemed “clean” under agency guidelines, three people familiar with the matter told Reuters.
Expedited reviews historically have been rare because the CFPB selects companies for examination based on perceived consumer risk. Austin Hinkle, former senior counsel in the CFPB’s Supervision Division, told Reuters the unusually high number suggests either the agency selected the wrong companies or career staff are being discouraged from pursuing violations.
“A significant number of expedited track reviews suggest to me that either political leadership simply picked the wrong companies to examine, or that when violations are identified, career staff are being told to back off,” he said.
The shift comes as the Administration has sought to sharply narrow the CFPB’s supervisory footprint, including cutting examinations by half, focusing more heavily on banks rather than nonbanks and redirecting attention away from areas including student loans and medical debt. Former acting CFPB director Russell Vought told lawmakers in July that the goal was to do “as little damage as possible,” while maintaining that did not mean doing as little oversight as possible.
Former CFPB officials warned the lighter approach could allow compliance problems to go undetected. Larry Lee, a former CFPB attorney now with Better Markets, told Reuters, “Today's undiscovered compliance issues may fester and explode into tomorrow's widespread but preventable consumer injuries.”
Former CFPB supervision director Lorelei Salas said reducing scrutiny of nonbanks could leave higher-risk companies with less oversight, adding, “The picture is pretty grim for consumers in the United States.”
Originally reported by CU Today.