Democratic state AGs join fight to save CFPB from Trump

The embattled Consumer Financial Protection Bureau, which top Congressional Democrats recently pledged to defend against potential attacks from the Trump administration, has more defenders in its corner now, as more than a dozen state attorneys general are joining the fight to protect the CFPB.

According to multiple reports, including Reuters and The National Law Journal, the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington, as well as the District of Columbia are seeking to intervene in the legal battle between the CFPB and PHH over the constitutionality of the CFPB.

Last year, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that the CFPB’s leadership structure was unconstitutional and vacated a $103 million increase to a $6 million fine levied against PHH by CFPB Director Richard Cordray.

That decision makes Cordray removable “at will” by the president rather than “for cause,” as previously stipulated.

The CFPB and the government are fighting back against that ruling, asking the full Court of Appeals to rehear the case.

The Court of Appeals has not yet made its decision on whether to rehear the case, but now the Court has some new information to consider, courtesy of the 17 attorney generals, who say that the election of Donald Trump compels them to intervene in the CFPB lawsuit.

“When PHH filed the original petition for review in June, 2015, there was little reason for the State Attorneys General to intervene. At that time, the CFPB still had an independent Director and was fully committed to seeking rehearing to challenge the panel’s ruling and defend the constitutionality of the bureau’s independent structure,” the AGs state in their motion to intervene.

“But as a result of the presidential election,” the AGs continue, “the situation has changed.”

The AGs noted that as president-elect, Donald Trump expressed “strong opposition” to the Dodd-Frank Wall Street Reform Act.

The AGs also noted that, according to various reports, the Trump administration is rumored to be planning to fire and replace Cordray shortly, and could take other steps that could directly impact how the PHH lawsuit proceeds, if at all.

“Given the position of the president-elect and the new administration, it is urgent that the State Attorneys General intervene in order to protect the interests of their States and their States’ citizens in an independent CFPB,” the AGs state.

The AG state that they should be allowed to intervene in the case and contribute their perspective because the Trump administration may not defend the CFPB’s structure, as the Obama administration did.

“The incoming administration has indicated that it may not continue an effective defense of the statutory for-cause protection of the CFPB director,” the AGs state.

“A significant probability exists that the pending petition for rehearing will be withdrawn, or the case otherwise rendered moot, in a way that directly prejudices the interests of the State Attorneys General and the citizens of the States that they represent,” the AGs continue. “Allowing the State Attorneys General to intervene would eliminate that risk and ensure that the courts can resolve this important controversy.”

The AGs argue that should the government give up in its fight to defend the CFPB, the consequences would be severe.

“Should the respondent choose to forgo further defense of this action, the interests of the State Attorneys General, and the citizens whom they represent, will be seriously impaired,” the AGs write.

“The panel’s decision effectively rewrites the statute, permitting the immediate termination of the Director at will,” the AGs continue. “This will not only compromise the independence of the agency, it will likely derail pending policy initiatives and enforcement actions and possibly call into question the validity of past initiatives. As a result, the State Attorneys General and their States’ citizens will be directly prejudiced.”

Wells Fargo accused of falsely overcharging mortgage borrowers

Four former Wells Fargo employees in the Los Angeles region say the account scandal was not the only way the bank deceived borrowers, according to an article in ProPublica by Jesse Eisinger.

According to the article, the bank improperly charged borrowers to extend their promised interest rate when their mortgage paperwork was delayed.

However, the article explained that the delays were usually the bank’s fault but that management forced them to blame the customers, finding a variety of strategies to shift responsibility.

The alleged claim reopens a fresh wound for the bank given that its still cleaning up from its major account scandal announced in September of last year.

In the bank’s latest fourth-quarter earnings report, CEO Tim Sloan said, “We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders.”

From the article:

“I believe the damage done to Wells Fargo mortgage customers in this case is much, much more egregious,” than from the sham accounts, a former Wells Fargo loan officer named Frank Chavez wrote in a November letter to Congress that has not previously been made public. “We are talking about millions of dollars, in just the Los Angeles area alone, which were wrongly paid by borrowers/customers instead of Wells Fargo.” Chavez, a 10-year Wells Fargo veteran, resigned from his job in the Beverly Hills private mortgage group last April. Chavez sent his letter to the Senate banking committee and the House financial services committee in November. He never got a reply.

When I go back to my rural hometown, I notice a lot more drug use than when I lived there. Alcoholism was always a problem, but now it’s alcohol, crystal meth, pot, and probably others I’m not aware of.

THE OPIOID CRISIS IS A HOUSING CRISIS

America has a drug addiction epidemic spreading quickly across America. In the past year, 91 people died of a drug overdose each day, and the number of opioid-related deaths have tripled in the last 16 years.

At the Housing Assistance Council’s recent biennial Rural Housing Conference, national policymakers began proposing a new idea to help people struggling to kick their addiction: transition housing. CityLab interviewed Alan Morgan, director of the National Rural Health Association about how transition housing infrastructure would be critical in solving America’s addiction crisis:

The opioid addiction crisis has been at the forefront of a lot of discussion this past year, but it still seems as though there are many challenges to be worked through—especially housing. How does affordable housing intersect with the opioid epidemic in rural communities?

We have an unfortunate tendency to silo our sectors. When it comes to the opioid epidemic, we can no longer afford to do that. It’s a health issue, but there’s a transit component, and there is certainly a housing component. People need to be in a stable, drug-free environment to complete the recovery process. And in rural areas, there’s a real shortage of affordable housing that is safe and drug-free. If people get into treatment then are released back into the same housing situations where they have access to opioids, then it just exacerbates the issue.

So what often happens is that people struggling with addiction fall into homelessness: Around 35 percent of homeless individuals nationwide struggle with drug abuse. But unfortunately, rural homelessness doesn’t have the same visibility as it does in urban areas. In smaller communities, people will often bounce around the homes of extended family, but the transient nature of rural homelessness is not a visual cue that people understand. It’s been hard for communities to come up with a solution to problems they can’t see.

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