Will CFPB investigations rise after the election?

Auto lenders could see an increase in new investigations from the Consumer Financial Protection Bureau as early as 2021 if Democratic nominee Joe Biden secures the presidency, Ori Lev, partner at Mayer Brown , said during the CBA Live conference Tuesday. A Biden victory is widely expected to result in a change in leadership at the Bureau, legal experts agree. “As an institution, you might be seeing the [civil investigative demands] and increased supervisory presence early in 2021,” Lev said. “The staff at the Bureau is largely the staff that had been there. They operated under Rich Cordray who was a go, go, go kind of guy. If you get a new director, and there's a push, they'll get up and running quickly with new investigations, it's just going to be a while before we see them publicly.” In fact, the number of new investigations opened by CFPB Director Kathleen Kraninger in her first year as head of the Bureau and former acting Director Mick Mulvaney in his one year leading it show a “precipitous drop” when compared to Cordray’s last four years, according to Lev. He filed a Freedom of Information Act request regarding the number of investigations the Bureau had opened each fiscal year. “It was striking. The numbers in the last four years of Cordray were 99, 45, 70, 63 — that’s new investigations every fiscal year,” Lev explained. “The numbers in Mick Mulvaney’s one year was 15, and in Kraninger’s first year it was 20.” Still, it could be a few years before financial services industries see an uptick in enforcement actions, even under a new Biden administration, Lev said. “It takes a couple of years for those investigations to mature into public actions we know about. The numbers suggest we are going to see a tail in a couple of years with fewer enforcement actions. It’s going to take some time to ramp up.” It is the CFPB’s goal to see a matter investigated and resolved — either through a lawsuit or consent order— within two years, he said. Under a Biden administration, the CFPB will likely focus on the fallout from the COVID-19 economic crisis and the increases in loan modifications across mortgages, student loans and auto finance, Lev said. “How are those being [loans] serviced? And how are consumers being harmed? What is the expectation for how [a lender] treats those consumers whose deferments come due? That, to me, is going to be the principal focus of a reinvigorated Biden CFPB.” Biden is currently leading President Trump in an average of national polls by 7.5 points as of 5:30 ET, according to the nonpartisan data and analytics website 270 to Win , which keeps a rolling average of the five most recent national polls on the general election, including RMG Research, Morning Consult and Monmouth University, which were all conducted on Sept. 28 and 29. Auto Finance Summit, the premier industry event, returns October 20-22, 2020, as a virtual experience. The virtual experience will offer the quality networking and education of past events, all through an online platform. To learn more about the 2020 event and register, visit www.AutoFinanceSummit.com .

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