From Watchdog to Attack Dog: Examining the CFPB’s Chopra-era Assault on Disfavored Industries

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                      FROM WATCHDOG TO ATTACK DOG:5                EXAMINING THE CFPB'S CHOPRA-ERA ASSAULT6                        ON DISFAVORED INDUSTRIES78=======================================================================910                                HEARING1112                               BEFORE THE1314                         SUBCOMMITTEE ON OVERSIGHT AND15                              INVESTIGATIONS1617                                 OF THE1819                    COMMITTEE ON FINANCIAL SERVICES20                     U.S. HOUSE OF REPRESENTATIVES2122                    ONE HUNDRED NINETEENTH CONGRESS2324                             FIRST SESSION2526                               __________2728                             JUNE 26, 20252930                               __________3132                           Serial No. 119-323334       Printed for the use of the Committee on Financial Services3536[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3738                            www.govinfo.gov3940                                __________4142                   U.S. GOVERNMENT PUBLISHING OFFICE4360-991 PDF                  WASHINGTON : 20254445-----------------------------------------------------------------------------------4647                 HOUSE COMMITTEE ON FINANCIAL SERVICES4849                    FRENCH HILL, Arkansas, Chairman5051BILL HUIZENGA, Michigan, Vice        MAXINE WATERS, California, Ranking52    Chairman                             Member53FRANK D. LUCAS, Oklahoma             SYLVIA R. GARCIA, Texas, Vice54PETE SESSIONS, Texas                     Ranking Member55ANN WAGNER, Missouri                 NYDIA M. VELAZQUEZ, New York56ANDY BARR, Kentucky                  BRAD SHERMAN, California57ROGER WILLIAMS, Texas                GREGORY W. MEEKS, New York58TOM EMMER, Minnesota                 DAVID SCOTT, Georgia59BARRY LOUDERMILK, Georgia            STEPHEN F. LYNCH, Massachusetts60WARREN DAVIDSON, Ohio                AL GREEN, Texas61JOHN W. ROSE, Tennessee              EMANUEL CLEAVER, Missouri62BRYAN STEIL, Wisconsin               JAMES A. HIMES, Connecticut63WILLIAM R. TIMMONS, IV, South        BILL FOSTER, Illinois64    Carolina                         JOYCE BEATTY, Ohio65MARLIN STUTZMAN, Indiana             JUAN VARGAS, California66RALPH NORMAN, South Carolina         JOSH GOTTHEIMER, New Jersey67DANIEL MEUSER, Pennsylvania          VICENTE GONZALEZ, Texas68YOUNG KIM, California                SEAN CASTEN, Illinois69BYRON DONALDS, Florida               AYANNA PRESSLEY, Massachusetts70ANDREW R. GARBARINO, New York        RASHIDA TLAIB, Michigan71SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York72MIKE FLOOD, Nebraska                 NIKEMA WILLIAMS, Georgia73MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado74MONICA DE LA CRUZ, Texas             CLEO FIELDS, Louisiana75ANDREW OGLES, Tennessee              JANELLE BYNUM, Oregon76ZACHARY NUNN, Iowa                   SAM LICCARDO, California77LISA McCLAIN, Michigan78MARIA SALAZAR, Florida79TROY DOWNING, Montana80MIKE HARIDOPOLOS, Florida81TIM MOORE, North Carolina8283                      Ben Johnson, Staff Director8485                                 ------8687              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS8889                 DANIEL MEUSER, Pennsylvania, Chairman9091TIM MOORE, North Carolina, Vice      AL GREEN, Texas, Ranking Member92    Chairman                         RASHIDA TLAIB, Michigan93ANN WAGNER, Missouri                 NIKEMA WILLIAMS, Georgia94BARRY LOUDERMILK, Georgia            CLEO FIELDS, Louisiana95ANDREW R. GARBARINO, New York        SAM LICCARDO, California96ANDREW OGLES, Tennessee97MIKE HARIDOPOLOS, Florida9899                         C  O  N  T  E  N  T  S100101                              ----------102103                        Thursday, June 26, 2025104                           OPENING STATMENTS105106                                                                   Page107Hon. Daniel Meuser, Chairman of the Subcommittee on Oversight and108  Investigations, a U.S. Representative from Pennsylvania........     1109Hon. Al Green, Ranking Member of the Subcommittee on Oversight110  and Investigations, a U.S. Representative from Texas...........     3111112                               STATEMENTS113114Hon. Maxine Waters, Ranking Member of the Committee on Financial115  Services, a U.S. Representative from California................     4116117                               WITNESSES118119Mr. James Kim, Partner, Cooley LLP                                    5120    Prepared Statement...........................................     7121Ms. Jennifer Bassett, Chief Executive Officer, Pacific Rim122  Alliance Corporation                                               12123    Prepared Statement...........................................    14124Mr. Devin Watkins, Attorney, Competitive Enterprise Institute125  (CEI)                                                              22126    Prepared Statement...........................................    24127Ms. Morgan Harper, Director of Policy and Advocacy, American128  Economic Liberties Project                                         27129    Prepared Statement...........................................    29130131                                APPENDIX132133                   MATERIALS SUBMITTED FOR THE RECORD134135Hon. Al Green:136    Consumer Financial Protection Bureau (CFPB) Worker's137      Testimonies................................................    60138    Trumps Administration Sues all 15 Maryland Judges Over Order139      Blocking Removal of Immigrants.............................   100140Hon. Nikema Williams:141    Statement for the Record.....................................   107142143                 RESPONSES TO QUESTIONS FOR THE RECORD144145Written responses to questions for the record from Representative146  Maxine Waters147    Mr. James Kim................................................   109148    Ms. Jennifer Bassett.........................................   110149    Mr. Devin Watkins............................................   111150    Ms. Morgan Harper............................................   112151Written responses to questions for the record from Representative152  Nikema Williams153    Ms. Morgan Harper............................................   113154155                      FROM WATCHDOG TO ATTACK DOG:156                    EXAMINING THE CFPB'S CHOPRA-ERA157                    ASSAULT ON DISFAVORED INDUSTRIES158159                              ----------160161                        Thursday, June 26, 2025162163             U.S. House of Representatives,164      Subcommittee on Oversight and Investigations,165                           Committee on Financial Services,166                                                    Washington, DC.167168    The subcommittee met, pursuant to notice, at 10:03 a.m., in169room 2128, Longworth House Office Building, Hon. Dan Meuser170[chairman of the subcommittee] presiding.171    Present: Representatives Meuser, Loudermilk, Haridopolos,172Moore, Green, Tlaib, Williams of Georgia, Fields, Liccardo, and173Waters.174    Chairman Meuser. Well, good morning. The Subcommittee on175Oversight and Investigations will come to order.176    Without objection, the chair is authorized to declare a177recess of the committee at any time.178    This hearing is entitled ``From Watchdog to Attack Dog:179Examining the CFPB's Chopra-Era Assault on Disfavored180Industries.''181    Without objection, all members will have 5 legislative days182within which to submit extraneous materials to the chair for183inclusion in the record.184185    [The information referred to can be found in the appendix.]186187    Chairman Meuser. I now recognize myself for 5 minutes to188give an opening statement.189190   OPENING STATEMENT OF HON. DANIEL MEUSER, CHAIRMAN OF THE191     SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.192                REPRESENTATIVE FROM PENNSYLVANIA193194    Today's hearing is titled ``From Watchdog to Attack Dog:195Examining the CFPB's Chopra-Era,'' what one may describe as,196``Assault on Disfavored Industries.''197    I would like to take a moment to thank the witnesses for198being here to discuss the actions of the Consumer Financial199Protection Bureau (CFPB) under the leadership of former200Director Rohit Chopra.201    The CFPB was created to be a nonpartisan watchdog, an202agency tasked with protecting American consumers from203deceptive, unfair, and abusive financial practices, but under204Director Chopra, that mission was largely abandoned. The CFPB205ceased to be a pro-consumer agency and instead became an206ideological weapon used not to protect the public but to207pressure businesses into aligning with the CFPB's goals through208aggressive rules, enforcement, and supervision.209    Chopra targeted entire sectors he disfavored, wielding the210agency's enforcement powers to intimidate and financially211exhaust companies that did not share his ideological212progressive vision for the marketplace.213    One of the most troubling examples of this overreach was214the aggressive use of civil investigative demands, or CIDs.215CIDs are powerful legal tools that allow the CFPB to demand216vast amounts of documents, data, and testimony, often with217little to no justification or judicial oversight.218    Under Chopra, the CFPB issued CIDs to effectively weaponize219the agency's authority to bury small firms in compliance costs220and reputational damage before any wrongdoing was even proven.221    While a business can petition a CID, the decision on any222petition was ultimately at the discretion of the Director,223sending it back to the organization that issued it in the first224place. Unsurprisingly, Director Chopra denied 100 percent of225the petitions that were received. Under the first Trump226Administration, six petitions were granted to overturn CIDs.227    For many businesses, especially small ones, the process of228responding to a CID is a very challenging task, often leading229to layoffs, loss of customers, and in many cases closures. One230of our witnesses here today will explain just how devastating231these CIDs were.232    Under Chopra, the process became the punishment. The threat233of a CFPB investigation was less about compliance and more234about survival, especially for smaller businesses. This is not235consumer protection. It is a bureaucratic attempt at236intimidation, and it has no place in a system governed by the237rule of law.238    I applaud President Trump for ending this campaign of239coercion at the CFPB. Businesses operating legally should not240have to fear their own government.241    That is why, today, I have sent a letter to the CFPB's242Acting Inspector General, requesting a formal investigation243into whether Director Chopra consistently exceeded his244statutory, lawful authority. Congress must act to ensure that245the CFPB cannot be weaponized again.246    Under the Trump Administration, legally operating, ethical247businesses no longer live in fear of the CFPB and their248punishment. Chopra's tenure has made one thing clear: Congress249must ensure the CFPB--or any agency, for that matter--can ever250again be weaponized for ideological purposes.251    Of the countless banks and compliance officers, both large252and small, that I have spoken to over the last 2 to 3 years, I253have not heard from one that had anything positive to say about254Director Chopra and the CFPB's work. I have met with former255Director Chopra several times and told him about these256concerns, and it made no difference, and the CFPB continued its257crusade.258    I look forward to hearing from the witnesses on how259Congress can help the CFPB return to its core mission of260protecting the American consumers from unfair and abusive261practices.262    Sadly, the one investigating the abuses became the abuser.263    Now I want to recognize my friend and ranking member of the264subcommittee, the gentleman from Texas, Mr. Green, for 4265minutes for an opening statement.266267   OPENING STATEMENT OF HON. AL GREEN, RANKING MEMBER OF THE268     SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.269                   REPRESENTATIVE FROM TEXAS270271    Mr. Green. Thank you, Mr. Chairman, and I acknowledge you272as a friend as well.273    However, notwithstanding the fact that the title of this274hearing is ``From Watchdog to Attack Dog,'' I believe that a275better title for the hearing would be ``From Watchdog to276Lapdog,'' and ``How Trump's CFPB has Abandoned Consumers in277Favor of Corporations.''278    It is not just the CFPB that is under attack, and we should279not view these things in a silo, because if we do, we will miss280the big picture. Federal agencies are under attack. We are281currently defunding the Department of Education, defunding the282Department of Health and Human Services (HHS), defunding the283Federal Election Commission (FEC), defunding the Department of284Housing and Urban Development (HUD), and defunding the Federal285Emergency Management Agency (FEMA).286    With all of these agencies under attack, we should287understand that there is an effort afoot not only to defund the288CFPB, which is, of course, being done, but also to literally289remove from these agencies dollars--dollars--so that these290dollars can go to the pockets of the very wealthy in this291country.292    It is not just from these agencies. The very essence of a293country is the ability for its citizens to have good294healthcare. We are removing dollars--dollars--from healthcare295so that persons who are very wealthy can have more money in296their pockets.297    We seem to believe in this country that the poor can do298more with less, but the wealthy need more to do more. This is299an abomination and I believe that Trump's CFPB has not only300stopped initiating new investigations into abuses into the301financial industry, but it also has discontinued examinations302that are ongoing from Director Chopra's CFPB.303    Most alarmingly, Trump's CFPB has taken the unprecedented304step--the unprecedented step--of rescinding settlements with305companies that the CFPB had negotiated following investigations306into consumer harm.307    In April, Trump's CFPB announced a wide-scale reduction in308force affecting 90 percent of the agency's staff. That 90309percent of agency's staff cut will benefit persons who are very310wealthy.311    This administration seems to believe that you can take from312the needy to support the greedy. I am not with that. I believe313that this country has been built upon the foundation of314agencies that are helping people.315    The CFPB is at the very core of this, and we have to do316what we can to protect consumers. We do not want the CFPB to317become the agency for the financial institutions. It was for318consumers. It has now become an institution that is going to319protect financial institutions from consumers that are under320attack. This is unimaginable.321    Finally, I want to mention something else as we move to322closure. Something has happened today that I cannot believe.323The Trump Administration has indicated that they will sue all32415 Federal judges in Maryland over an order that those courts325issued.326    Rather than appeal the cases, the Trump Administration is327now suing the judges who rendered the decisions. We have328already heard the administration indicate that it would want to329have judges impeached for decisions that it disagrees with.330    This administration is out of control. This administration331is causing the demise of democracy to take place before our332very eyes, and we have to stop it. We cannot allow American333democracy to become authoritarianism with an authoritarian334President.335    I yield back the balance of my time.336    Chairman Meuser. The gentleman yields.337    The chair recognizes the ranking member of the full338committee, Ms. Waters, for 1 minute.339340    STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE341  COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM342                           CALIFORNIA343344    Ms. Waters. Thank you.345    Today, my colleagues on the other side of the aisle are346holding yet another hearing to attack the Consumer Financial347Protection Bureau under former Director Chopra's leadership for348fulfilling his duties to protect consumers.349    That Consumer Financial Protection Bureau returned $21350billion to harmed consumers. On the other hand, under Trump's351leadership, the agency has abandoned American consumers and the352dedicated public servants who protect them.353    I am once again calling on Chairman Hill to bring Acting354Director Vought before this committee to explain the Trump355Administration's unlawful efforts to delete the Consumer356Financial Protection Bureau and fire 90 percent of its workers.357    Where is the accountability, Mr. Chairman?358    Unfortunately for consumers, who broadly support having a359strong Federal watchdog protecting them from financial rip-360offs, this Republican-led Congress is not providing it.361    Mr. Green, I join you in my outrage and disgust at this362administration. They are trying to wear us out, and they are363almost doing it. Of course, none of the members on the opposite364side of the aisle are willing to stand up to----365    Chairman Meuser. The gentlelady's time has expired.366    Ms. Waters [continuing]. stop this mess.367    I do not know if I will stop or not.368    Chairman Meuser. The gentlelady is out of order.369    We will now move to witness testimony.370    Today, we welcome the testimony of Mr. James Kim. Mr. Kim371is a partner at Cooley LLP, where he advises clients on372compliance with Federal and State consumer financial laws and373regulations. Previously, Mr. Kim was a Senior Enforcement374Attorney at the CFPB. Mr. Kim holds a bachelor's degree from375Brown University and a J.D. from Cornell University.376    We also have with us Ms. Jennifer Bassett. Ms. Bassett is377the Chief Executive Officer at Pacific Rim Alliance378Corporation, where she served for 17 years in several379leadership roles. She also serves on the board of INFiN, a380national trade group for consumer financial services, and CFSP,381a California-based trade association. Ms. Bassett earned her382bachelor's degree in mathematics from the University of Texas.383    We also have with us Mr. Devin Watkins. Mr. Watkins is an384attorney at the Competitive Enterprise Institute, where he385evaluates regulations and develops strategies to curb over-386regulation. He holds a computer science degree from Stevens387Institute of Technology and a J.D. from George Mason388University's Antonin Scalia Law School; and with us is Ms.389Morgan Harper. Ms. Harper is the Director of Policy and390Advocacy at the American Economic Liberties Project. Ms. Harper391holds a J.D. from Stanford Law School, a master's degree in392public affairs from Princeton, and an undergraduate degree from393Tufts.394    Thank you all very much for being with us.395    Each of you will be recognized for 5 minutes to give an396oral presentation of your testimony. Without objection, your397written statements will be made part of the record.398    Mr. Kim, you are now recognized for 5 minutes for your oral399remarks.400401          STATEMENT OF JAMES KIM, PARTNER, COOLEY LLP402403    Mr. Kim. Thank you, sir.404    Chairman Meuser, Ranking Member Green, and members of the405subcommittee, thank you for inviting me to testify today.406    My name is James Kim. I am a partner at the law firm407Cooley. I am presenting my own views today and not those of my408firm or any of its clients.409    The CFPB has a critical mission--to protect American410consumers--and I believe in that mission. That is why I joined411the Bureau in 2012 as one of the first enforcement attorneys in412New York Regional Office.413    Between working at the CFPB for 2 years and spending the414last 11 years in private practice working on matters involving415the Bureau, I have been immersed in agency matters over three416different administrations.417    There is no question the CFPB, over the years, has418strengthened consumer protections since its inception, but some419of the Bureau's actions during the past administration exceeded420the boundaries of the laws and rules that it enforces.421    Notably, the CFPB issued interpretive rules, guidance422documents, and advisory opinions that supposedly interpreted or423clarified Federal consumer financial laws but, in reality,424sought to change the substance of those statutes and rules.425These actions created confusion rather than clarity.426    It started enforcement investigations and filed lawsuits to427create new compliance requirements rather than go through the428public notice-and-comment rulemaking process mandated by the429Administrative Procedure Act. This unilateral approach deprived430stakeholders, including other Federal agencies, State431lawmakers, and State regulators, from participating in policy432discussions directly impacting their jurisdictions.433    The CFPB pressured companies to submit to the Bureau's434supervisory authority, its most powerful and least transparent435regulatory tool, under the threat of the Bureau exercising its436so-called dormant authority to examine companies that posed437risk to consumers.438    Compared to other Federal agencies, the CFPB is still a439startup. Like other startups who have gotten off the ground, it440needs reminders to stay faithful to its mission and its core441principles, and it needs adjustments to better execute its442mission.443    Most importantly, the Bureau should focus on engaging with444and gathering information from stakeholders at the ground445level. All CFPB functions, from supervision to rulemaking to446enforcement, should be driven by data collected from a wide447range of sources, rather than siloed, top-down decisions from448agency leadership.449    Thank you again for the opportunity to testify today. I450look forward to any questions that you may have.451452    [The prepared statement of Mr. Kim follows:]453    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]454455    Chairman Meuser. Thank you.456    The gentleman yields back.457    Ms. Bassett, you are now recognized for 5 minutes for your458oral remarks.459460STATEMENT OF JENNIFER BASSETT, CHIEF EXECUTIVE OFFICER, PACIFIC461                    RIM ALLIANCE CORPORATION462463    Ms. Bassett. Thank you.464    Chairman Meuser, Ranking Member Green, and members of the465subcommittee, thank you for the opportunity to testify before466you today.467    My name is Jennifer Bassett. I am CEO of Pacific Rim468Alliance Corporation, a small, women-owned financial services469company based in Phoenix. For 36 years, we have provided small-470dollar loans and essential financial services to underserved471consumers. We are a State-licensed, federally compliant472business with no outside investors.473    Our customers are everyday, working people who rely on our474services for short-term credit when traditional options fall475short. Our products help them afford urgent car repairs,476appliance repairs, and avoid utility shutoffs, overdraft fees,477or even eviction.478    I am here today because our business, along with others in479the small-dollar-lending sector, were designated for480enforcement by the CFPB under Director Chopra's leadership. The481CFPB pressured our small, compliant business to the brink, not482because of any proven wrongdoing but due to a bias against our483industry.484    We are a small company that is getting smaller. Since the485start of this targeted enforcement campaign, we have closed 35486percent of our locations and laid off a third of our staff. We487currently operate 30 branches across 5 States and employ 80488people.489    At some of our lower-performing locations, as they490approached lease renewals, we were forced to make difficult491decisions, including closing branches we had successfully492operated for over 25 years. Rather than reinvesting to improve493underperforming branches, we had to divert resources, both494financial and human, to comply with burdensome demands by the495CFPB.496    We have been the subject of an ongoing investigation by the497CFPB for 3 years, since July 2022. The Bureau has issued three498CIDs, each more burdensome than the last. None has been tied to499any specific allegation, consumer complaint, or exam finding.500    Despite our full compliance with the first CID, which501included producing over 11,000 pages of documents and my502participation in an entire-day 8 hours of testimony, we never503received any follow up or feedback from the Bureau.504    Rather than focusing their investigation, we received a505second sweeping CID demanding detailed data on every loan made506for a period of 6 years, as well as all internal507communications, all personnel files, and more. We were also508expected to review and produce 3.8 million emails. Still, no509violations were cited.510    The third CID requested additional written responses and511multiple investigational hearings with employees.512    Each time, we complied in good faith. We had to hire513outside counsel. We do not have in-house attorneys. The legal514fees and costs have now reached nearly half a million dollars.515A half a million dollars is an extraordinary burden for a516company of my size.517    We petitioned the Bureau twice for relief. Both petitions518were denied by the very agency that issued the demands. There519is no neutral arbiter, no check on the Bureau's authority.520Director Chopra served as the judge, jury, and executioner.521    Even worse, after submitting confidential financial data to522support the tremendous strain we were under in our first523petition, the CFPB published our sensitive business and524financial information while redacting their own most aggressive525CID demands. This kind of selective transparency has a chilling526effect on participation, and it intimidates businesses.527    We have a history of working cooperatively with the CFPB.528We underwent full, lengthy examinations in 2015 and 2018 with529no violations of law, zero fines, and no penalties.530    We suspect we were targeted, in part, because I531participated in the 2015 Small Business Regulatory Enforcement532Fairness Act (SBREFA) panel for the CFPB's Small Dollar Lending533Rule. When that rule was deemed unworkable and largely534rescinded, Chopra's Bureau shifted tactics, regulating not535through rulemaking but through enforcement. Multiple small536lenders like us were hit with nearly identical CIDs. This was537not a company-specific investigation; it was an intimidation538campaign against our industry.539    Director Chopra has claimed that the Bureau was focused on540large participants and repeated offenders, but our experience541tells a different story. We are neither large nor a repeat542offender. Yet we have been hammered, our reputation damaged,543and our ability to serve customers weakened.544    This is not how regulatory oversight should function in545America. Enforcement should be targeted, fair, and transparent,546not arbitrary or punishing.547    The current CID process lacks procedural safeguards. That548is why I urge the subcommittee to support real, meaningful549reforms to this process, including supporting the bipartisan550CID Reform Act.551    The CFPB should be a watchdog, not an attack dog.552    Thank you, and I look forward to your questions.553554    [The prepared statement of Ms. Bassett follows:]555   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]556557    Chairman Meuser. Thank you, Ms. Bassett, for your558testimony.559    We now recognize Mr. Watkins for 5 minutes for his remarks.560561 STATEMENT OF DEVIN WATKINS, ATTORNEY, COMPETITIVE ENTERPRISE562                           INSTITUTE563564    Mr. Watkins. Chairman Meuser, Ranking Member Green, and565members of the subcommittee, I appreciate the opportunity to566speak to you today.567    My name is Devin Watkins. I am an attorney at the568Competitive Enterprise Institute (CEI). CEI has advocated for569nearly 40 years for a more accountable government rather than570bureaucratic control so people can live freer, healthier, and571more prosperous lives.572    Two years ago, I testified before this committee to express573serious concern about the structure and conduct of the Consumer574Financial Protection Bureau. I proposed reforms to the CFPB.575Shortly after my testimony, the Supreme Court granted a review576in Jarkesy and, last year, agreed with me that jury-free577administrative trials for the imposition of fines, like those578used by the CFPB, are unconstitutional.579    The absence of a reform I proposed--that rules clearly580define unlawful actions before enforcement--led to the abuses I581will discuss today.582    Regulatory enforcement abuse, like that which occurred at583CFPB, is just another form of prosecutorial abuse. A normal584prosecutor waits for a potential victim, examines the evidence585to see if a well-known violation of law occurred, and then586brings enforcement to protect that specific victim. The problem587occurs when prosecutors follow the old Soviet saying, ``Show me588the man, and I'll show you the crime.''589    That chilling phrase reflects a regime where law is not a590constraint on power but a tool of it, where the decision of who591to investigate comes first and the legal justifications follow592later, where the government does not apply well-known rules, it593invents them for the occasion.594    Sadly, this has become the reality of too many businesses595facing CFPB enforcement actions. Let me illustrate with three596concrete examples.597    Consider the case of Comerica Bank, which CFPB sought to598penalize over consumer-call wait times. I know the CFPB599regulates banks, but there is no law or CFPB rule stating how600long is too long for a wait time. The agency simply declared601that the wait time was too long and sought to retroactively602punish Comerica for violating the new rules.603    John Locke described freedom as having a standing rule to604live by, not to be subject to the inconstant, uncertain,605unknown, arbitrary will of another man. If a company cannot606know in advance what conduct it will be punished for, that is607not regulation; it is an ambush.608    The second example involves Acima, Snap Finance, and the609broader rent-to-own industry. Such rent-to-own leases were not610previously treated as credit, but one day the Bureau simply611announced they were now subject to its authority as credit612products, and then, in violation of the ex post facto613prohibitions, or at least the spirit thereof, the CFPB fined614companies for transactions that occurred before the new615interpretation was announced.616    Lastly, Townstone Financial is a small Chicago mortgage617company. The CFPB did not go after Townstone for denying anyone618a loan. There were no consumer complaints; so, what was CFPB's619issue? Townstone's owner, Barry Sturner, had a weekend radio620talk show. On the radio talk show, Mr. Sturner expressed621concern about crime in urban neighborhoods. CFPB targeted622Townstone Financial for his protected speech.623    The CFPB then destroyed his business by claiming complaints624about neighborhood crime on the radio were really disguised625attempts to dissuade minority applicants from mortgages.626    Facing a mountain of fines and after 7 years and spending a627million dollars to defend itself, Townstone was offered a628settlement for $105,000. That might sound big, but it is less629than it would cost to hire a private attorney to fight those630charges in court.631    Townstone was defended by many great lawyers, including632Pacific Legal Foundation, an excellent nonprofit law firm that633defends many worthy causes. Townstone's costs could easily have634doubled but for the legal assistance provided pro bono, but,635still, the burdens of litigation were too much for Townstone to636continue.637    Coerced plea agreements are far too common in today's legal638system. When people are facing millions in fines and offered a639settlement for less than what it costs to defend yourself, many640innocent people give in. A coerced agreement of an innocent641person is not a badge of honor for the prosecutors but a mark642of shame.643    These cases represent a broader pattern where the CFPB has644brought cases for the purpose of stretching its authority.645Congress never gave CFPB authority to regulate consumer-call646wait times, comments on radio talk shows, or rent-to-own647leases. The agency just seized that power.648    Fortunately, there is cause for hope. Under new leadership,649the CFPB has dismissed many of these abusive actions. It has650also tried to unwind the Townstone settlement, recognizing that651the enforcement violated the First Amendment.652    Shockingly, a Federal judge has refused to let the agency653correct its own mistake. According to the judge, the people654cannot be allowed to select new leaders to reverse655constitutional violations by their government.656    A President has the power to pardon even the most atrocious657terrorists and traitors, but for some reason an658unconstitutional settlement in a civil proceeding cannot be659vacated. This is wrong.660    The rule of law is not a partisan issue. It is the661foundation of our Republic.662    Thank you.663664    [The prepared statement of Mr. Watkins follows:]665    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]666667    Chairman Meuser. Thank you, Mr. Watkins.668    Ms. Harper, you are now recognized for 5 minutes.669670 STATEMENT OF MORGAN HARPER, DIRECTOR OF POLICY AND ADVOCACY,671              AMERICAN ECONOMIC LIBERTIES PROJECT672673    Ms. Harper. Thank you.674    Chair Meuser, Ranking Member Green, members of the675subcommittee, thank you again for the opportunity to testify676about the CFPB today.677    Since its inception, the CFPB has enforced laws to protect678consumers and honest businesses. Today's hearing is about679attacks but let us be clear who is attacking American consumers680and competition: It is this administration's unleashing of681corporate lawlessness and the rejection of CFPB's true law682enforcement mission.683    This mission is personal. Though I currently serve as the684Director of Policy and Advocacy at the American Economic685Liberties Project, a few years after the financial crisis I686left a corporate law firm to join the agency, appalled at how687private-equity-funded corporate giants profited from the crash688while so many communities in my home State of Ohio were still689reeling economically. I had heard this new agency was trying to690do something about it, and I wanted to help.691    We wrote rules for prepaid cards and sued Wells Fargo for692opening millions of fake accounts in customers' names. Though693it garnered fewer headlines, I am also extremely proud of how694we looked out for special populations like older Americans. My695own 82-year-old mother lost an entire month's pension in a scam696involving prepaid cards--a painful violation too many American697families have experienced and then reported to the CFPB.698    In fact, the CFPB has processed over 10 million consumer699complaints, returning, on average, over $1,400 each. The agency700has used every tool Congress bestowed to deliver real results,701returning $21 billion to over 200 million Americans and forcing702lawbreakers to pay more than $6 billion in fines.703    Former Director Chopra continued this legacy of cracking704down on illegal conduct, whether perpetrated by Wall Street,705Big Tech, or newer companies. Under his leadership, the agency706confirmed that ``buy now, pay later'' lenders are credit707providers and subject to the same legal protections as credit708cards; the agency held data brokers accountable for how they709mismanaged consumers' personal financial information; and,710through the open banking rule, the CFPB expanded consumer711access to their own financial data, allowing companies of all712sizes to compete.713    The agency took action to ensure fintech companies follow714Federal laws, cracking down on debanking and holding repeat715non-bank offenders like TransUnion accountable. Chopra's CFPB716also did not shy away from suing big guys, like Bank of717America, Apple, and Goldman Sachs, for numerous violations.718    Acting Director Russell Vought, however, has veered719dangerously off this course since assuming his role in720February. He has taken a sledgehammer to the agency's721enforcement function. The CFPB has dismissed or withdrawn more722than half of its pending cases with no explanation. Talk about723arbitrary. Many of these were permanently dismissed.724    Vought is letting J.P. Morgan, Wells Fargo, and Bank of725America off the hook for $870 million in fraud on the Zelle726platform and dropping a case against Capital One for cheating727consumers out of $2 billion in interest payments. It comes as728no surprise that both J.P. Morgan and Capital One donated to729the President's inauguration fund.730    The current administration's CFPB has not just handed out731corporate pardons to their friends on Wall Street but also732reversed course on already-negotiated settlements, robbing733consumers blind. Chopra's CFPB ordered Toyota to pay $60734million for illegally raising borrowers' monthly car payments.735Last month, Trump's CFPB inexplicably terminated the agreement.736It is again of note that Toyota donated $1 million to the737President's inauguration.738    As Americans continue to manage increased costs, the739current CFPB, along with the congressional majority, has rolled740back rules that would limit junk fees, including overdraft and741credit card late fees. Estimates suggest Vought and Trump's742rollbacks have already cost Americans $18 billion--almost as743much as CFPB has returned to the public since opening its744doors.745    In the background of this destructive policymaking are CFPB746employees in limbo, punished for working to prevent any747American family from experiencing the pain of being cheated,748scammed, or made homeless by a faceless corporation that does749not give a damn.750    After the worst financial crisis since the Great751Depression, Congress created the CFPB to ensure, ``all752consumers have access to financial products and services'' and753that markets are ``fair, transparent, and competitive.''754    Chopra's CFPB fulfilled this congressional mandate to755protect American consumers, mitigate risk to our financial756system, and enforce the rule of law without fear or favor. It757is a mission 82 percent of Americans, including 77 percent of758Republicans, support.759    Congress should push this administration to resume the work760of stopping lawlessness instead of enabling it. As household761debt teeters on $20 trillion and loan delinquencies rise, the762administration's reckless rollback----763    Chairman Meuser. The gentlelady's time has expired.764    Ms. Harper [continuing]. of the CFPB law enforcement765agenda----766    Chairman Meuser. We will now turn to member questions.767    Ms. Harper [continuing]. is something that threatens768financial stability.769    Thank you.770771    [The prepared statement of Ms. Harper follows:]772   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]773774    Chairman Meuser. The gentlelady's time has expired. Please775follow the rules.776    We will now turn to member questions. The chair now777recognizes himself for 5 minutes.778    Thank you for your testimony, all of you. Interesting779perspectives. Real-life examples of unbelievably abusive780overreach that have caused you to fly in from all over the781country when you could spend your time doing many other things,782but you want to come here and talk about the tyrannical crusade783taken within a government agency, and we are not going to stand784for it. This is America, and it is going to remain a free785society, not one where an agency feels it can do whatever the786hell it wants.787    That is where we start.788    Mr. Kim, in your view, was the Bureau's primary mission to789protect consumers through evenhanded enforcement of clear790rules? Was that pretty much----791    Mr. Kim. Yes, sir.792    Chairman Meuser. ``Yes, sir''? You----793    Mr. Kim. Yes.794    Chairman Meuser [continuing]. think their--well, did they795carry out the mission evenhandedly to protect consumers?796    Mr. Kim. During the last administration, I think the record797is clear that certain actions exceeded its legal mandate and798its legal boundaries.799    Chairman Meuser. Okay. Well, I guess that means that they800did things that were unlawful according to their scope and801their mission and their legal authorities.802    Ms. Bassett, flying in from Phoenix, where you of course803would have better things to do, like helping to keep your804company alive and functioning, you have been under CFPB805investigation, which you expressed, and before that you had806been in regular contact with your State regulators. You are a807very regulated industry and business.808    Would you describe those relationships with your State809regulators as fair and constructive?810    Ms. Bassett. Thank you for the question.811    Yes, our relationship with our State regulators has always812been great, and it is very collaborative and effective.813    Chairman Meuser. Okay, so a big difference between your814State regulators that have been doing their business for a long815time--and then enter the Chopra era, and you had different816experiences, to say the least. Do you want to elaborate on817that?818    Ms. Bassett. Thank you, Congressman.819    Yes, it was extremely different. We received our first820civil investigative demand just out of the blue. We had been821through two prior examinations in 2015 and 2018. No fines, no822violations. Then all of a sudden, we just get this civil823investigative demand with no clear purpose.824    The amount of data that they expected from us was just825overwhelming. It has consumed over half of my time for the last826almost 3 years.827    Chairman Meuser. Last 3 years.828    What sort of rationale do you give to these CIDs? What were829their purposes?830    Then what were the results of these CIDs to your company's831reputation? Did it help you improve your relationship with your832consumers? Did it protect any consumers? Did it provide833reputational harm, personal burden, business disruption? Or was834there any glimmer of helpfulness in their oversight and835intrusive behavior?836    Ms. Bassett. Thank you for the question.837    There was absolutely no benefit to consumers based on this838investigation. It is still open, actually, today, but we have839never had a clear understanding of what they are looking for.840They asked for just everything we had. We kept trying to narrow841the scope and say ``Can we work this out?'' We tried to comply842the whole time, and it is just--I do not know what the end was843going to result in; we never got there.844    Chairman Meuser. Thank you.845    Mr. Watkins, you have vast experience, many years in this846industry, dealing with oversight bureaus, dealing with847government regulations. Yet you used the phrase ``show me the848man, and I'll show you the crime'' in order to describe the849Chopra CFPB.850    So, you obviously believe that these tactics that were851being used, with the CID and everything else, were overly852aggressive. Could you elaborate?853    Mr. Watkins. Yes. There are many times, I think, where the854CFPB has chosen what its targets are first before it has any855evidence that a crime has occurred or even that there is any856reason to believe a crime has occurred.857    I really think the government needs to have some kind of at858least probable cause to believe there is a crime before it859creates enormous burdens and harm to these companies.860    Chairman Meuser. All right. Thank you very much.861    I yield back.862    Now the gentlewoman from California, Ranking Member Waters,863is recognized for her questions for 5 minutes.864    Ms. Waters. Thank you very much.865    First, I would like to ask those who have come here to866undermine the Consumer Financial Protection Bureau, do you867believe that it should be deleted from government altogether?868Each of the three who have testified, do you want to eliminate869it altogether? Yes----870    Mr. Kim. No, ma'am.871    Ms. Waters [continuing]. or no?872    Mr. Kim. No.873    Ms. Waters. Yes or----874    Ms. Bassett. Yes.875    Ms. Waters [continuing]. no?876    Ms. Bassett. Yes.877    Ms. Waters. Yes or no?878    Mr. Watkins. I would have Congress write the rules and879transfer its enforcement authority from the CFPB to Department880of Justice.881    Ms. Waters. You made an interesting statement. You said882that President Trump ``has the power to pardon even the most883atrocious terrorists and traitors, but for some reason an884unconstitutional settlement in a civil proceeding cannot be885vacated.''886    I am so happy that it cannot be vacated, because you are887right. You are absolutely right. He supports the terrorists. He888supports those who came to the Congress of the United States to889kill us all. Thank you for that, in the record.890    Now let me go to our witness Ms. Harper.891    The Consumer Financial Protection Bureau has returned $21892billion to consumers. Do you believe that alone should justify893the work that they are doing?894    Do you believe that--in early May, Trump's Consumer895Financial Protection Bureau asked a Federal judge to scrap the896previously finalized medical debt that would take medical debt897off credit records and help 15 million people in the United898States with unjustly lowered credit scores due to medical debt.899The Consumer Financial Protection Bureau previously researched900this matter and found medical debt has little value in901predicting a consumer's creditworthiness.902    Should someone who experienced an unexpected medical event903through no fault of their own deserve to end up with a damaged904credit score that prevents them from getting mainstream credit905or forces them to pay much more for a loan?906    Ms. Harper. Thank you for the question, Congresswoman.907    I think the $21 billion figure that the CFPB--the money908that CFPB has been able to return to consumers is evidence of909just how effective it is as a regulator of the consumer910financial markets.911    I think the reason why it should continue to exist is912because Congress said so, and we should respect the rule of913law. It has not been a priority of this administration or the914leadership under Acting Director Vought, but that is something915that is a principle of this country. Regarding medical debt, I916am glad you mentioned it, because this has been a very917troubling development in this administration, seeing the lack918of support for doing something about this industry. We have919millions and millions of dollars and millions of consumers that920are now being caught up in this system of their debt now921informing--their debt from a healthcare system that has been922monopolized by corporate giants and has not been checked yet923through government action now informing credit decisions.924    Really, what the result of this could be and a question925that this committee needs to be asking itself is, do we want a926system where a healthcare giant, like UnitedHealth Group, is927now determining who gets mortgages in this country or whether928you get a credit card?929    That is the end result of this kind of reckless decision930making from this administration and not supporting the medical931debt rule, which would address some of the abuses that have932been happening in that industry.933    Ms. Waters. Thank you very, very much.934    You know that the chairman here today talked about rules,935follow the rules. He even made that point when he talked to936you.937    Do you know and understand that the Consumer Financial938Protection Bureau Director should be brought, according to the939rules, before this committee every 6 months, and it has not940been done?941    Why do you think they did not follow the rules?942    Ms. Harper. It is a great point, because, yes, that is an943obligation that has not been fulfilled.944    I think it is very interesting for all of us as panelists945to share our views on different consumer financial protection946policies, but the elephant in the room is, there is a guy that947is in charge of that right now, his name is Russell Vought, and948he should be here at this hearing explaining some of his949decision making.950    I mean, I would also like to come back to this Townstone951case, because ``following the rules.'' What we had in that952case--a Republican judge who agreed with the settlement that953had been negotiated by the CFPB, a panel of judges that also954were Republican-appointed that agreed to it, and then this955administration that said, ``Oh, no, do not worry, we no longer956care whether fair-lending laws have been violated.''957    ``Follow the rules''? What are we talking about?958    Ms. Waters. Wow. It could not be better stated. What are we959talking about?960    I guess I will yield back the time so he can continue with961this hearing. All right. Thank you.962    Mr. Watkins. Mr. Chairman?963    Ms. Waters. I yield back.964    Mr. Watkins. If I could have a minute?965    Chairman Meuser. Time has expired.966    We will now--the chair now recognizes the gentleman from967Georgia, Mr. Loudermilk, for 5 minutes.968    Mr. Loudermilk. Thank you, Mr. Chairman.969    Before I start with my questions, Mr. Watkins, I will yield970a little time for you to respond.971    Mr. Watkins. I just wanted to correct the record. I did not972say the current President supported terrorists and traitors. I973was talking about any President's power, whether that is Biden,974Obama, or any President, to pardon terrorists and traitors,975such abusive people being given a second chance. Civil976penalties should also fall under the same provisions.977    Mr. Loudermilk. Thank you, Mr. Watkins.978    Ms. Waters.979    [Off-mic.]980    Mr. Loudermilk. Reclaiming my time. This is my time.981    Mr. Kim, in your opinion, did the Chopra-era CFPB target982companies outside the financial services industry through983enforcement actions?984    Mr. Kim. Yes, sir. I believe Mr. Watkins touched upon a few985examples.986    One public one is the rent-to-own industry. It is not new;987it has been around for decades. About 46 States have rent-to-988own specific laws and regulations. It is also policed by the989Federal Trade Commission.990    It is clear in the law that it is not an extension of991credit under the Bureau's jurisdiction, but the CFPB, under the992past administration, brought multiple enforcement actions and993lawsuits against that industry. It took that industry 4 years--994or the companies involved--4 years to be vindicated with a995dismissal in Federal court, with a decision by a district court996judge, not a dismissal by the Bureau.997    Mr. Loudermilk. It was dismissed by the judicial branch998that there was nothing to the accusation. How many millions of999dollars were spent defending that?1000    Mr. Kim. I do not know, and I cannot say. Like I said, it1001took several years to get that vindication.1002    Mr. Loudermilk. The industry obviously suffered, but would1003it not be the consumer who ended up really bearing the costs of1004those actions?1005    Mr. Kim. I presume so. Companies tend to pass on costs to1006end users if there are costs imposed on them.1007    Mr. Loudermilk. That was not a whole lot of protection of1008consumer finances, was it?1009    Mr. Kim. Not that I am aware of, especially----1010    Mr. Loudermilk. Okay.1011    Mr. Kim [continuing]. when States can police that industry.1012    Mr. Loudermilk. Right.1013    Mr. Watkins, did any Chopra-era CFPB regulations undermine1014other Federal or State regulators' existing regulatory1015authority?1016    Mr. Watkins. Yes. Comerica Bank that I was talking about,1017they were directly regulated and under the oversight of the1018financial services of the--in Department of the Treasury. The1019CFPB went after them in a sense because they thought that the1020Treasury Department was not being aggressive enough.1021    Mr. Loudermilk. Okay.1022    Ms. Bassett, how would you describe your engagement with1023the CFPB's team in terms of your request to modify the various1024CIDs, the civil investigative--I am forgetting the term----1025    Ms. Bassett. Demands.1026    Mr. Loudermilk. Yes. Thank you--the various CIDs they1027served on you? In making those requests, you were not trying to1028hide anything, were you?1029    Ms. Bassett. Thank you for the question, Congressman.1030    Absolutely not. We did try to work with them in their meet-1031and-confer process, where we asked that they just narrow the1032scope, because they were asking for everything that we had, and1033the experience is just detrimental to a company my size.1034    When I said I wanted to delete the CFPB earlier, the reason1035that I would even go that far is because my experience with my1036company has been horrible. It has really hurt our company and1037our reputation.1038    I have been through examinations with them with no issues,1039but that was also so time-consuming and crazy, when we already1040are State-regulated and examined by our States all the time.1041    Thank you.1042    Mr. Loudermilk. The CIDs we were talking about are civil1043investigative demands.1044    Ms. Bassett. Yes.1045    Mr. Loudermilk. These are demands on your company that you1046have to respond, whether you are guilty of anything or not. Are1047they even--they are not even accusing you of anything.1048    Ms. Bassett. No, they were not. They issued these CIDs to1049at least four or five companies in our industry with the exact1050same notification purpose and the exact same document request.1051It was not company-specific to me.1052    Mr. Loudermilk. So, they had no probable cause.1053    Ms. Bassett. Correct.1054    Mr. Loudermilk. They were just fishing.1055    Ms. Bassett. It was a fishing expedition.1056    Mr. Loudermilk. Which is a violation of the Fourth and1057Fifth Amendment of the Constitution.1058    The Bureau's investigation of your company has taken 31059years. In that time and to this day, were you ever told of a1060single violation your company is guilty of? You said ``no''----1061    Ms. Bassett. No.1062    Mr. Loudermilk [continuing]. correct?1063    Chairman Meuser. The gentleman's time has expired.1064    Mr. Loudermilk. Thank you, Mr. Chair. I yield.1065    Chairman Meuser. The gentleman yields.1066    The chair now recognizes Mr. Liccardo of California for 51067minutes.1068    Mr. Liccardo. Thank you, Mr. Chair.1069    Thank you to our witnesses for coming to testify.1070    Ms. Harper, I was very interested in your testimony,1071specifically about specific actions that were taken by CFPB,1072the Consumer Financial Protection Bureau, against companies1073that subsequently were dismissed.1074    My understanding was, in November 2023, Toyota settled a1075$60 million legal scheme that increased monthly car loan1076payments on consumers.1077    You indicated Toyota was a contributor to President Trump.1078Is that right?1079    Ms. Harper. Yes.1080    Mr. Liccardo. How much?1081    Ms. Harper. A million dollars, I believe.1082    Mr. Liccardo. In May 2025, the consent order that Toyota1083agreed to was actually terminated by the administration. Is1084that right?1085    Ms. Harper. Yes.1086    Mr. Liccardo. Is there much precedent for an administration1087terminating a consent order that the opposing corporation1088actually agreed to?1089    Ms. Harper. No. I think it is fairly safe to say that what1090we are seeing from the current CFPB, led by Acting Director1091Vought, is beyond any normal parameters of what we would expect1092from a financial regulator.1093    Mr. Liccardo. Do we know anything about the $48 million1094that was supposed to be returned by Toyota to consumers?1095    Ms. Harper. In terms of?1096    Mr. Liccardo. That consent order, was it actually--was any1097of that money actually returned?1098    Ms. Harper. No, I do not think a dollar has been returned1099yet.1100    When I said in my opening testimony that this is really1101robbing consumers blind, this is money that should have been1102going back to consumers who were harmed. Especially in this1103period where we know that the American public is facing so many1104challenges around the cost of living, it is really inexplicable1105to be adding to that burden and prevent consumers from getting1106more money.1107    The last thing I would add is: These are legal violations.1108This is a law enforcement agency. We all should be encouraging1109that. That should be a bipartisan issue, and the fact that it1110is not saying a lot about who Russell Vought wants to benefit1111in this administration--their friends.1112    Mr. Liccardo. Well, let us go to that in a moment.1113    Bank of America and J.P. Morgan were both under1114investigation regarding the Zelle network, regarding a failure1115to reimburse customers that were defrauded by scam artists, and1116that action was taken to the CFPB. What was the result of that1117action?1118    Ms. Harper. Those are also among the cases that have been1119dismissed.1120    Mr. Liccardo. Bank of America contributed to Donald Trump1121and his inauguration, did not he?1122    Ms. Harper. Yes.1123    Mr. Liccardo. Was it half a million dollars?1124    Ms. Harper. I believe so.1125    Mr. Liccardo. J.P. Morgan, another million dollars?1126    Ms. Harper. Yes.1127    Mr. Liccardo. Capital One, the evidence from the CFPB1128indicated they may have cheated customers out of as much as $21129billion. How was--how is it that Capital One engaged in that1130fraud?1131    Ms. Harper. Yes. What was happening in that case was that1132Capital One was signing consumers up for accounts that they1133said were going to be high-yield-interest accounts, that1134consumers, by putting their money in those accounts, through1135interest payments, would be able to earn some additional money,1136and instead of actually doing that, they were keeping them in1137lower-yield accounts and not telling them.1138    Again, just another example of straight-up taking money1139away from people in this country that need it more than ever.1140    Especially when we are looking at an entity, an institution1141like Capital One, talk about a repeated offender. Long litany1142of legal violations.1143    That is why it was also very disconcerting to see from this1144administration that they green-lit the Capital One-Discover1145merger that is only going to increase Capital One's market1146power and make it really difficult for small businesses and1147consumers to get ahead.1148    Mr. Liccardo. Ms. Harper, Capital One contributed a million1149dollars to Trump's inauguration.1150    Ms. Harper. Also true.1151    Mr. Liccardo. What happened as a result to the CFPB case?1152    Ms. Harper. They got their case dismissed.1153    Mr. Liccardo. I am puzzled as to why we are having this1154hearing. As we are watching the defunding of the financial1155police happening over the last several months and weeks, all I1156have heard is criticism of whatever happened in the last1157administration. I am sure there is plenty of criticism that is1158legitimate against the last administration. I do not understand1159why we are still spending time on whatever happened in the last1160administration when we know what is happening under this1161administration is so corrupt and so clearly undermining the1162interests of every American consumer.1163    I hope that our next hearing is going to actually focus on1164protecting American consumers and what we can do now and1165prospectively with a CFPB that has been utterly gutted as1166Republicans continue to defund the financial police.1167    I yield.1168    Chairman Meuser. The gentleman yields.1169    The chair now recognizes Mr. Haridopolos from Florida for 51170minutes for his questions.1171    Mr. Haridopolos. Thank you, Mr. Chairman. I appreciate this1172conversation. It is one that has been happening way too often,1173in the idea that this previous administration seemed to pick1174winners and losers over and over again.1175    Let us just be clear: If the CFPB did not exist--it does--1176if it did not exist, there are still 12 different Federal and1177State regulators that could oversee these financial markets. As1178many people even said after they created the CFPB, you could1179have just consolidated all of this into the Federal Trade1180Commission (FTC). After all, it has been around--as a history1181teacher, I know this--since 1914 and the Progressive Era.1182    Let us make sure that this is not some ``Wild West'' we are1183talking about here. There are 12--12--different agencies that1184oversee these type of things.1185    What we have heard consistently in this very committee, as1186both Mr. Moore and I are new members, is that this was1187clearly--this agency was playing politics. That is the1188frustration I think we are going through, is that they would1189pick on folks who they necessarily did not like and they would1190run them into the ground--run up expenses and make it very hard1191for them to compete in an increasingly competitive world, and1192so, I am glad to see we are having conversations like this.1193    Let us also be clear that the U.S. Supreme Court1194aggressively told the CFPB that they violated the Seventh1195Amendment. That was a recent Supreme Court decision.1196    Now all we are asking is, ``Hey, CFPB, would you mind1197following the Administrative Procedure Act (APA) standards?''1198That is a good idea so we could actually know what the rule1199book is.1200    In this committee we have heard over and over again--it is1201the reason why our Chairman, Mr. Hill, has been so effective.1202He was saying, with things like cryptocurrency and the1203blockchain, let us make sure we know who is actually going to1204regulate it so out-of-control regulators do not get to pick1205winners and losers. I think that is a commonsense thing to do.1206    Mr. Kim, let me ask you this with that premise: We saw the1207violations of the Seventh Amendment. The Supreme Court ruled1208very clearly on that measure. What are we doing now, as I think1209that our previous questioner asked--what are we talking about1210in the future? I cannot go in the past either, folks. Let us1211talk about the future.1212    What can we do so we do not have these fishing expeditions,1213and these people do not pick winners and losers before they1214even get into the game? What have they done to make sure that1215this does not happen again?1216    Mr. Kim. If we are looking forward, I think the guidelines1217and rules are clear, and you have referred to them. There is1218the Administrative Procedure Act. There are a host of1219requirements for public rulemaking through a transparent1220process.1221    I think that is your answer, sir, is that----1222    Mr. Haridopolos. Let me ask Mr. Watkins.1223    Mr. Kim [continuing]. the rules are there----1224    Mr. Haridopolos. Mr. Watkins, I would love to get your1225opinion.1226    Mr. Watkins. We need to do more. The APA is not sufficient1227here.1228    We should require that any kind of civil investigative1229demand go before a judge to show that it is reasonable in its1230scope and that it is supported by probable cause and allow the1231individual or business to dispute that before the judge to1232ensure that these businesses are protected from these enormous1233burdens before they are forced to undertake them.1234    Mr. Haridopolos. I will just close with this, Mr. Chair.1235    I want to thank Ms. Bassett for coming in. These are not1236easy, and I know that--these challenges you have had. I1237appreciate your willingness to testify, because some people1238like to play games in retribution, and it is very much the1239wrong way just to do things.1240    Also I would mention the last thing we want to do in this1241business is start getting into the discussion about who gave1242money to who. I mean, I think it diminishes the quality of the1243conversation we can have here.1244    What I am excited about is that we are taking a fresh look1245at, whether it be the CFPB, whether it be how the FEC1246regulates, or the Commodity Futures Trading Commission (CFTC)1247regulates. That is, I think, the mission of our committee.1248    I am glad to see that our chairman here has done a great1249job of bringing testimony forward, because I do not want to1250litigate fights in the past either. I want to move this country1251forward, and I am glad to see that we are taking a fresh look1252about how we administer the APA and how we are going to--when a1253company comes into play, that they feel like they are going to1254have a fair umpire instead of someone coming in and picking1255winners and losers, which clearly some of the folks before were1256doing.1257    I am not here to litigate that, but I am here to litigate1258the idea that we are going to use this committee effectively,1259find out what the consumer is dealing with, and when they go1260before one of these huge Federal administrative agencies, that1261they feel like they are going to get a fair shake and that the1262die has not already been cast.1263    Mr. Chairman, I applaud this oversight meeting, and I think1264it is going to be very helpful as we move forward, once we1265complete the work with bitcoin, cryptocurrency, and other1266crypto-type measures.1267    Thank you, Mr. Chairman, and I yield back.1268    Chairman Meuser. I thank the gentleman for his remarks.1269    The gentleman yields back.1270    I now recognize Ms. Williams from Georgia for 5 minutes.1271    Ms. T4Williams of Georgia. Thank you, Mr. Chairman.1272    You all, as I prepared for this hearing, I was initially1273very excited, because I thought maybe the hearing would focus1274on oversight of the CFPB and I would finally get an answer1275about all of the jobs lost and the consumer protection1276investigations that have been halted after my Republican1277colleagues stood by as the Trump Administration has gutted the1278CFPB.1279    Then I read the title, ``From Watchdog to Attack Dog.'' I1280guess my Republican colleagues are right about something: They1281have consistently attacked the CFPB and consumer protection1282since I have arrived on this committee. No matter what the1283facts are, my colleagues on the other side of the aisle, they1284just want to continue to attack the CFPB under the guise of1285accountability.1286    Well, here are the facts. Congress has already placed1287conditions on the CFPB to ensure that it is accountable. Now we1288just need the Trump Administration to follow the law, which1289seems to be a pretty high bar in this administration.1290    The CFPB Director is required to testify before this1291committee twice a year. We have not had that first hearing yet,1292you all, and it is almost July. It might have something to do1293with; we still do not have a permanent director at the CFPB.1294    It is a shame that we are here today to help my Republican1295colleagues feel like they care about accountability with this1296sham of a hearing when we could and should be focused on1297consumer protections.1298    Let us be real: This hearing is not about making the CFPB1299work better. House Republicans are just hurt that former1300Director Chopra prioritized the most important piece of our1301financial system--the consumer--and not their billionaire1302buddies.1303    Despite how some of my colleagues feel, the work of the1304CFPB--well, the work that the CFPB did do before it was gutted,1305and we are still dealing with that--but it was imperative for1306my constituents in Atlanta, across the Fifth District in1307Georgia, and across the country, in Democratic and Republican1308districts because the CFPB is nonpartisan. Reducing excessive1309junk fees, that is nonpartisan. Relieving the burden of medical1310debt on consumer credit reports, that is nonpartisan. Combating1311housing discrimination and holding banks accountable for1312deceptive practices, that is nonpartisan.1313    These are consumer protections. Are we really describing1314those actions as those of an attack dog? To me, those are1315actions that are all critical to the financial well-being of1316the American people--people that I fight for every single day1317in Congress, people who are seeing prices skyrocket under the1318Trump Administration, people who already could not afford to1319buy a home, send their kids to college, or just get ahead1320because of years of my Republican colleagues' blocking1321investments in people and communities who need them most.1322    With the Trump Administration's lack of a consumer1323protection agenda, he has already turned the consumers'1324watchdog into a muzzled little puppy.1325    In my district alone, according to the Student Borrower1326Protection Center's own data, the CFPB helped over 196,0001327consumers find financial relief in Georgia's Fifth District.1328That is not an attack dog. That is a watchdog--a watchdog for1329the people.1330    I want to take this time to help American consumers1331understand exactly what is happening now, now that we do not1332have a consumer watchdog.1333    I will start with you, Ms. Harper.1334    Ms. Harper, I understand that you used to work at the CFPB,1335and we thank you and your colleagues for your work and service1336on behalf of the American people.1337    Georgia's Fifth District is home to 13 higher-ed1338institutions and the largest consortium of Historically Black1339Colleges and Universities (HBCUs) in the Nation. For many young1340consumers in my district, especially first-generation college1341students, they are taking out a loan for the first time to1342finance their education. Students may also be opening a bank1343account or getting a credit card for the first time on campus,1344and this makes students a very captive market for financial1345firms.1346    Ms. Harper, how are students currently at risk of being1347targeted without protections from the CFPB?1348    Ms. Harper. Thank you for the question. Yes, your point1349about being marketed when you are a young person, I know my1350brother fell into one of those traps----1351    Ms. Williams of Georgia. I fell into those traps.1352    Ms. Harper. Yes. Yes. It used to be very bad before there1353was a cop on the beat, and in order to continue to make sure1354laws are enforced, you have to have people working at the CFPB1355to supervise some of that conduct.1356    Right now, based on the decisions out of this1357administration, we have seen the supervisory staff drop from a1358few dozen in some cases for certain departments to just a1359handful of people, that is not enough to keep track of what is1360going on out there in the market to protect students.1361    If I may just clarify a couple of other points that have1362come up because I think a lot of today's focus is that--1363suggesting that there is some targeting, and Ms. Bassett,1364though I have heard some of her testimony, I think it is1365important to keep in mind, again, that the CFPB's mission is to1366follow legal violations. Sometimes people who conduct and1367participate in legal violations, it is not comfortable to go1368through that process.1369    Ms. Williams of Georgia. My time has expired because this1370conversation is so important in protecting the consumers. Mr.1371Chairman, I yield back, and I look forward to having this1372conversation as we continue to work on this committee to1373protect consumers in this country.1374    Chairman Meuser. The gentlewoman yields. The chair now1375recognizes Mr. Moore of North Carolina for 5 minutes.1376    Mr. Moore. Thank you, Mr. Chairman. This has always been an1377intriguing subject for me because before being a Member of1378Congress I was an attorney for 30 years. During those 30 years1379I had cases over the time where I actually represented victims1380who were defrauded, civilly defrauded, some actually criminally1381defrauded, and I am a big advocate for consumer protection, but1382I will tell you, under the former Director, under Direct1383Chopra, the CFPB was essentially I would say fundamentally1384reshaped to reflect a progressive agenda, prioritizing1385aggressive enforcement over clear guidance and balanced1386oversight.1387    The big injustice that always stuck out to me, and we have1388talked about this before the committee hearings, was how like1389rules are made up on the fly. They would be like press releases1390that came out. Then the fundamentally flawed way that the1391agency was funded was that it got more money based on the1392number of fines and penalties and so forth that were leveraged.1393I mean, that is just fundamentally unfair.1394    That is--and Mr. Haridopolos made the good point that1395consumer protection has been the law before this monstrosity of1396CFPB was ever dreamed up where you have had multiple agencies.1397States have laws dealing with consumer financial protections,1398with unfair and deceptive trade practices, other Federal1399agencies that cover this and this you simply had an agency that1400I would submit was a rogue agency, particularly in the last1401administration.1402    I will just ask a couple of questions. I will start with1403Mr. Kim. You have extensive experience with enforcement at1404CFPB, as well as the Administrative Procedures Act. I have1405asked this before, I just want to confirm, does the APA apply1406to the CFPB?1407    Mr. Kim. It does.1408    Mr. Moore. Is agency guidance, is that a rule?1409    Mr. Kim. It is not.1410    Mr. Moore. Is a press release a rule?1411    Mr. Kim. No.1412    Mr. Moore. Is a simple statement by the Director, is that a1413rule?1414    Mr. Kim. No.1415    Mr. Moore. Should a press release or statement by the1416Director be the basis of any enforcement action?1417    Mr. Kim. I do not think so. I cannot think of a situation1418in which it should.1419    Mr. Moore. I agree with you. My understanding is that kind1420of thing was happening on a routine basis in the prior1421administration.1422    Ms. Bassett, thank you for being here with us today. You1423have experienced this abuse first-hand as a small business1424owner. My understanding is your business was specifically1425targeted by the previous Director, and you received civil1426investigative demands. Can you explain what a CID is and what1427it has cost your business dealing with this mess?1428    Ms. Bassett. Congressman, thank you for the question. Yes,1429so the civil investigative demand, I was--it was unknown to me1430until I received one in July 2022, but it is basically a1431subpoena where they are asking you for an unbelievable number1432of--for us, an unbelievable number of documents from our1433company. The statement of purpose was very vague in general,1434and it was the same--they were issuing them to everyone in1435our--or lots of people in our industry. So the process was--it1436is still ongoing for us, and it has been 3 years, and we spent1437close to $500,000, and for my small business, that is just1438crippling.1439    Mr. Moore. My understanding is that you, in effect--you1440lost about a third of the value of your business; is that1441correct?1442    Ms. Bassett. That is correct.1443    Mr. Moore. It just--it just shocks me, and frankly I wish1444more Americans knew about this rogue agency and how it is just1445wrong in terms of what it has done. I think that our1446constituents back home expect us--they expect to know if they1447are dealing with any level of Government, particularly the1448heavy hand of the Federal Government, that there are rules in1449place that protect them, that there is due process in place,1450that there is not an incentive, if you will, for an agency to1451go after them.1452    You had the entire, the entire funding stream, Mr.1453Chairman, the way CFPB was arranged, they were incentivized,1454they were incentivized to go out and actually levy these fines,1455these penalties. That was the basis of their funding, and it1456would be the same as if you asked--if a police officer got paid1457more if he wrote you up for a bigger ticket or something, and1458that is just a fundamentally flawed system. I think it goes to1459show why this agency, frankly, should be abolished. We have1460other agencies that can do this and have done a better job when1461it comes to actually protecting consumers instead of just1462trampling over people's individual rights.1463    I hope as we move through this session and as we tackle1464some of the other serious matters this committee is charged1465with dealing with, that this is something we will deal with.1466With that, Mr. Chairman, I yield back.1467    Chairman Meuser. The gentleman yields back. The chair now1468recognizes Mr. Fields of Louisiana for 5 minutes.1469    Ms. Fields. Thank you, Mr. Chairman, and Ranking Member,1470and let me thank all of the witnesses for being here today. Ms.1471Harper, I do have a question for you. Given your research on1472financial industry practices, what do you anticipate will1473happen to consumer protection if the CFPB is effectively1474eliminated through workforce reduction or enforcement1475sensation? What alternative mechanisms could protect consumers1476from predatory practices that necessitate strong oversight, and1477what would you recommend to this committee to preserve1478meaningful consumer protection?1479    Then lastly, I mean, if you look at the number--the States1480with the members of this committee, the complaints that have1481been lodged to the CFPB, you have over a half a million in1482Georgia, and you have over a million in Florida. With that,1483looking at that as your basis, what would be your response?1484    Ms. Harper. Thank you for the question, Congressman. I1485think it is an important question, especially as we have folks1486that are reflecting on the past and what got us here.1487    Not having--the CFPB not having resources, not being1488appropriately staffed, not really having any enforcement agenda1489to protect the rule of law to speak of, which is what we have1490seen under this administration, is laying the groundwork for1491another financial crisis. It is interesting that so many of1492your colleagues on the other side of the aisle are saying we1493would love to have all of these resources focused on the CF--on1494the FTC, I should say, that there are other agencies that can1495handle this, that we can have these authorities scattered. That1496was the situation before the financial crisis. We have played1497that tune before and it devastated the lives of millions of1498Americans.1499    I think it is also very interesting that they are saying1500that because if there is so much respect for the FTC, it is1501interesting that this administration has actually dismissed1502Democratic commissioners from the FTC that were doing the1503important work of some of that market monitoring and being able1504to look into investigations of different practices that might1505hurt consumers across the country.1506    Mr. Fields. Thank you. Let me ask a question to Ms.1507Bassett. Small businesses historically create two-thirds of the1508new jobs. In my district, I have 2,478 older Americans who have1509filed complaints with the CFPB. How does eliminating1510transparency help these folks have access to the broader1511economic developments in our community?1512    Ms. Bassett. Congressman, thank you for the question. I1513think I understand what you are asking, but through the--I want1514to say that through the complaint--the CFPB has a huge data1515base of complaints, and with that my industry, which is small1516dollar lending, accounts for .08 percent, not my company, but1517my industry, of those complaints. We do not--our customers are1518very satisfied with our services. Maybe you can restate your1519question.1520    Mr. Fields. Well, make it very simple, I mean, how does--1521you understand the complaints that we have at the CF--the CFPB,1522the Congressional Media Consumer Protection Bureau, you1523understand the number of complaints we have nationwide of how1524would eliminating that department help consumers?1525    Ms. Bassett. Thank you. As I said before, when I stated1526that I wanted to, I did not believe in keeping the CFPB, a part1527of that is just my personal experience which has just been, for1528our industry, has just been such an overreach, and it just1529seems like an out of control agency at times.1530    Mr. Fields. Do you feel it serves any meaningful purpose?1531    Ms. Bassett. For me, no. There was no--I was never accused1532of any violation of law or consumer harm.1533    Mr. Fields. Not for you, but for the consumer.1534    Ms. Bassett. I am sorry. I do not really have a complete1535answer for that. I think again, like the other gentleman said,1536I think there are other agencies that are available to protect1537consumers.1538    Mr. Fields. All right. Name one in the financial industry.1539    Ms. Bassett. We have our State agencies that regulate,1540audit us, and also take complaints in as well; so, I believe1541that our States have done a great job. We have been in business1542for 36 years and so I believe that the States do a great job.1543    Mr. Fields. I yield back, Mr. Chairman.1544    Chairman Meuser. The gentleman yields back. The chair now1545recognizes Ranking Member Green of Texas for 5 minutes.1546    Mr. Green. Thank you, Mr. Chairman. Thank the witnesses for1547testifying as well. Ms. Harper, I especially want to thank you1548for your bold, brave and brilliant testimony. You are a1549superior talent. BA from Tufts, JD from Stanford, MPA from1550Princeton, clerked for a Federal judge, senior advisor to the1551Director of the CFPB for some 3 years. You are a superior1552talent, and I must tell you something, I am afraid for you. I1553am afraid for you because of the vindictive nature that is1554permeating this society emanating from the very top, from the1555President of the United States of America.1556    There are some other people who would agree with me. I have1557in my hand statements from 25 current and former employees of1558the CFPB. I would like to place them in the record, if I may,1559Mr. Chairman.1560    Chairman Meuser. Without objection.15611562    [The information referred to can be found in the appendix.]15631564    Mr. Green. These 25 people have not allowed their names to1565be associated with these statements. They live in fear. These1566are former employees, not just the current, people who are no1567longer with the CFPB, afraid to be associated with the actions1568that they believe to be unfair, and to some degree unlawful. We1569will place this in the record.1570    I am afraid for you because I have in my hand an article1571styled; Trump Administration Sues all 15 Maryland Federal1572Judges Over Order Blocking Removal of Immigrants. Sued all 151573judges because he did not like the decision. Where are we1574headed in this country when we refuse to honor court orders. It1575is one thing for this to happen at some lower level by some1576lawyer. This is the President of the United States of America.1577He sets the tone and tenor for everything that happens in this1578country.1579    I am afraid for you, and I want you to know this, I am1580going to stand with you. If you receive anything that causes1581you a good deal of consternation, causes some fear, I want you1582to contact my office. I am not among the pusillanimous1583politicians who are afraid to take a stand. I am going to1584stand, and I appreciate the boldness and the brilliance of your1585testimony.1586    Now, I have said earlier that what we are doing in this1587country does not only impact the CFPB. The Department of1588Education is being defunded. We cannot view these things in a1589silo, one hearing, one bit of information, and then we go to1590another. We have to connect the dots. Let us connect the dots.1591Defunding the Department of Education, crippling the ability to1592help our Nation's most vulnerable children. Defunding HHS,1593which provides essential services, especially those regarding1594Centers for Disease Control, Food and Drug Administration.1595Defunding department known as HUD, Department of Housing and1596Urban Development, at a time when Congresswoman Waters is1597trying to help more people get into homes. Affordability is a1598real problem in this country. She has legislation that would1599help with affordability, especially for first-time home buyers.1600    Here is one that is personal, defunding FEMA. I live along1601the Gulf Coast. I know what the severity of hurricanes is. I1602know how they impact the lives of people. If we defund FEMA,1603who is going to be there after a natural disaster to protect1604people who are sometimes living literally in the streets of1605life.1606    We have gone too far now. We have put the people who live1607in the suites of life above all other people, especially those1608who live in the streets. This country has to stop and take1609notice of what is happening. This President is destroying1610democracy in this country.1611    Sir, you said you wanted to make sure that rule of law is a1612foundation. I respect you, Mr. Chairman, I am going to yield1613back, but I am going to tell this gentleman, you are right, it1614is, and it is being diminished by the President of the United1615States of America. I yield back.1616    Chairman Meuser. The gentleman's time has expired. The1617chair now recognizes the chairman of the full committee, Mr.1618Hill of Arkansas, for 5 minutes.1619    Chairman Hill. Thank you, Chairman Meuser. It is good to1620have our panel. Thanks for helping us analyze the CFPB 15 years1621later. It is hard to believe that 15 years have passed by since1622Dodd-Frank, and all of you bring your expertise to our members,1623and so that is very very, very helpful.1624    Before I was in Congress, both in the brokerage industry1625and in the commercial banking industry, I was subject on and1626off to Federal regulation for years both in public companies1627and private companies, and I have to tell you, and I always1628tell my colleagues, I never once saw the Federal Government1629ever shirk its consumer protection enforcement responsibilities1630at any of the businesses I worked for. In fact, quite the1631contrary. I mean, just intensively disciplining the businesses1632I was associated with, enforcing the law, enforcing the1633regulations. So you can count me as--I know there are1634exceptions, and I know there are bad actors, and that is why we1635have Federal law. That is why we have fair housing laws and1636consumer protection laws and credit protection laws, and they1637are all enforced, and they were enforced before the CFPB1638existed. I want to be very clear about that.1639    The question here is not whether this committee is1640interested in consumer protection. It is dedicated to consumer1641protection. The facts here are how to do it and do it in the1642right way, the appropriate way based on business strategy,1643business size, business entity, and in conjunction with, what,1644the Federal statute.1645    The title of Dodd-Frank that set up the CFPB, being true to1646that statute and not inventing law out of whole cloth or1647operating by regulation by enforcement. That is not the way our1648State and Federal regulatory system has operated over the1649decade.1650    Mr. Kim, thank you for your enforcement responsibility. I1651looked at your resume. It looks like you were an early1652enforcement attorney working for Director Cordray, who I had1653the pleasure to know when I was first in Congress and you have1654seen now as an attorney, outside attorney, good enforcement and1655bad enforcement, or enforcement over past the fridge of1656statutory authority. I want to talk about that a little bit.1657    Can you explain how the CFPB skirted the Administrative1658Procedures Act process by stating that it would consider1659discrimination as an unfair, deceptive or abusive practice,1660UDAP, where we do not have the right defined terms here, we1661have been talking about this for years, give me your assessment1662on that.1663    Mr. Kim. Thank you, Chairman Hill. On that specific issue,1664trying to impose antidiscrimination requirements through UDAP1665authority, you do not have to take my word for it, there is a1666district court in Texas that made that very ruling. Right. That1667it was improper to basically legislate through an enforcement1668action, and that district court struck down that section of the1669UDAP manual that would impose these new kind of1670antidiscrimination requirements outside of existing Federal1671law, outside of ACOA, outside of the Fair Housing Act, and by1672imposing it kind of through the backdoor as UDAP requirements1673through a manual, which it is just a manual, like I can write a1674manual, not through the APA process.1675    Chairman Hill. Right. This is such a good point. Look, we1676have a system in place, let us use it. If you want to come1677advocate through the Federal register and promulgate a rule, or1678promulgate the interpretation of a rule, do it, but this1679backdoor enforcement work, I just cannot condone it.1680    Ms. Bassett, do you believe that the CFPB under Former1681Director Chopra engaged with you on a good-faith basis? As I1682understand it, under Director Cordray, your work had been1683reviewed carefully and you have been given a clean bill of1684health more than once, and then suddenly it is overturned by1685Director Chopra, and I do not think anybody thinks Richard1686Cordray is a patsy for the right, so where is the consistency1687and the application of CFPB procedures? Could you reflect on1688that?1689    Ms. Bassett. Thank you, Chairman Hill. You are right, we1690were thoroughly examined by the Cordray CFPB. They sent 101691examiners to our small corporate office for 10 weeks in 2015.1692They visited 17 of our locations. At the end of that, again,1693there were no findings of law, no fines, no penalties.1694    They came back in 2018, looked again, 10 examiners, they1695were not there quite 10 weeks this time, but by the end of 20191696they had closed out that exam and there were no findings.1697    Then we are just going along dealing with our State1698regulators, just business as normal, and 2022 in July we get1699this CID out of nowhere. It is very vague as to its purpose and1700we were--again, there were multiple of those.1701    Chairman Hill. Thank you. My time has expired. I hope you1702will expand to that in your answer in writing. Chairman, thank1703you for the hearing. I yield back.17041705    [The information referred to was not submitted prior to1706printing.]17071708    Chairman Meuser. The gentleman yields back.1709    Ms. Waters. I ask for unanimous consent----1710    Chairman Meuser. The chair now recognizes the gentlelady1711from Michigan----1712    Ms. Waters. To submit to the record----1713    Chairman Meuser. Ms. Tlaib for 5 minutes.1714    Ms. Waters. Unanimous consent, I request unanimous consent1715to submit to the record--Mr. Chairman, I ask unanimous consent1716to enter into the record a copy of section 1016 of the Dodd-1717Frank Wall Street Reform and Consumer Protection Act which1718requires this committee to hold a semi-annual hearing with the1719CFPB Director.1720    We have not done so since June 2024. I wrote Chairman Hill1721reminding him of this requirement, and it is high past time1722that committee Republicans follow the rules and hold the1723current administration accountable. I have both documents to1724submit to the record. I ask unanimous consent.1725    Chairman Meuser. Without objection.17261727    [The information referred to was not submitted prior to1728printing.]17291730    Chairman Meuser. The chair now recognizes Ms. Tlaib of1731Michigan for 5 minutes.1732    Ms. Tlaib. Mr. Kim, you are for-profit, right? For-profit?1733    Mr. Kim. I work for a for-profit.1734    Ms. Tlaib. Yep. Ms. Bassett, for-profit, right?1735    Ms. Bassett. Yes.1736    Ms. Tlaib. How about you, Mr. Watkins?1737    Mr. Watkins. I work in a non-profit.1738    Ms. Tlaib. You are non-profit.1739    Mr. Watkins. Yes.1740    Ms. Tlaib. Great. How about you?1741    Ms. Harper. Non-profit.1742    Ms. Tlaib. Okay. I only say this because some of the for-1743profit people are like, poof the agency just sent us a notice1744and we--like you all did not do anything wrong. Like it just1745came out of thin air.1746    I want to apologize to you, Ms. Harper, I was not here.1747This institution sometimes utters people that look like you and1748I and try to dismiss us or silence us, and I apologize. I1749seriously apologize for that. There is no sense of I think1750really understanding, sometimes our lived experiences are the1751passion that we have and the advocating for what is important.1752    This month, CFPB's acting head of enforcement, Cara1753Petersen, as you might have read or heard, and maybe you guys1754celebrated and had like pizza or something, and she quit in1755protest of this administration's attempt to undermine the1756bureau. I want to quote her email. She said, quote, never1757before have I seen the ability to perform our core mission so1758under attack. It is clear, she said, that the bureau's current1759leadership has no intention to enforce the law in a meaningful1760way.1761    Sadly, Ms. Petersen's departure should have come as no1762surprise to many of my colleagues. I mean, the administration's1763Acting Director Vought sought to fire, what, 90 percent of1764CFPB's staff. They have dropped 22 pending enforcement actions1765against corporate lawmakers. No wonder people that are1766listening, because I hear my colleagues really--400,0001767complaints by veteran servicemembers. I know for a fact that1768the fraud and the schemes targeting the American people right1769now is rampant. I know for a fact the bigger banks, their1770business plans are, what, 50 percent junk fees and overdraft1771fees. Corporate greed is like a disease in our country, and it1772is hurting the American people.1773    You all are acting like CFPB is sitting there just like1774picking on your donor friends. That is not--they are doing1775wrong actions against people. They have to have actual evidence1776and complaints, you all, to investigate.1777    One of the things that really is--they have overturned1778almost 70 pieces of non-binding guidance which can help inform1779consumers of their rights. Consumers are our residents.1780Residents. People. Servicemembers. Seniors.1781    The administration has allowed the backlog of 16,0001782consumer complaints to pile up and has actually returned1783millions of dollars that were meant to compensate consumers1784back to the companies that broke the law. Like the loan,1785student loan servicers, I know they got the calls from their1786residents. You see how they were wrong just really violating1787the process and so forth, and they got caught. The student loan1788services. They were supposed to give money back to--well, here1789he comes and he is like, we are not going to do that anymore.1790    Ms. Harper, one of the things that, I know CFPB for me, I1791always was explain to my residents, it is like the 911 for1792consumer protection. I know romance fraud, I am being serious,1793like these outside entities, but in there are the corporations1794that set up plans and business plans because they know no one1795is going to watch over them. I mean, CFPB did not just come1796from thin air. It did not just go, oh, we are just going to do1797this. It is because they were doing illegal and unlawful1798actions that were hurting the American people. Like they needed1799a babysitter. That is exactly what you all need is a babysitter1800because you will never put our people, the best interests of1801the American people before the interests of your for-profit1802clients and schemes.1803    Ms. Harper talks about the importance of CFPB and the1804reaction, I mean, right now the reaction out there in regard to1805what is happening without any consumer protection.1806    Ms. Harper. Thank you for the question, Congressman. I am1807glad you used the term 911 because when you look at some of the1808complaints, and we have been talking about the consumer1809complaint data base, you can actually feel the emergency and1810urgent emotions that the American people are having with things1811like----1812    Ms. Tlaib. They have no where to go.1813    Ms. Harper. Medical debt.1814    Ms. Tlaib. That is right.1815    Ms. Harper. Being hounded at their jobs to pay medical debt1816that is not the right amount, that they had no control over1817that now is influencing their employment.1818    The other thing I would note that has come up in terms of1819the risks that are in the market now, and it is more important1820than ever to have a CFPB that is staffed and focused on a1821strong enforcement agenda is around big tech. We were talking1822earlier about entities that are outside the financial industry.1823Looking at big tech and how they are trying to move into1824payments, this is something the Chopra CFPB was trying to1825regulate and be able to have supervisory authority to see risk1826there, and this administration has completely rejected and1827the----1828    Ms. Tlaib. I want to--I only have 3 seconds because he will1829cut me off. $3.5 billion in overdraft fees. I want residents1830out there in Republican, Democratic, do not matter, $3.51831billion of overdraft fees that were illegal, they have just let1832it go. We are not going to go ahead and enforce that. I just1833want the American people to know exactly what is happening.1834    Chairman Meuser. The gentlelady's time has expired.1835    Ms. Waters. Mr. Chairman, a request to--recognition to1836correct the record.1837    Chairman Meuser. The lady is recognized.1838    Ms. Waters. I indicated that President Trump, based on the1839testimony of the----1840    Chairman Meuser. Madam Chairwoman, my apologies, time has1841expired. Cannot be recognized.1842    Ms. Waters. I want to correct the record. I asked1843permission to correct the record.1844    Chairman Meuser. Is there a unanimous consent request?1845    Ms. Waters. The request that I am making was I quoted the1846gentleman who has----1847    Chairman Meuser. The gentlelady is not recognized.1848    Ms. Waters. Said President Trump has the power to pardon1849even the most atrocious terrorists and traitors, but for some1850reason----1851    Mr. Moore. Point of order, Mr. Chairman.1852    Ms. Waters. Settlement in a civil proceeding cannot be----1853    Chairman Meuser. The gentlelady is not recognized.1854    Ms. Waters. This is wrong and the gentleman tried to say1855that he did not say President Trump.1856    Chairman Meuser. The gentlelady is not recognized.1857    Ms. Waters. That he had said any President. The record1858needs to be corrected.1859    Mr. Moore. Mr. Chairman, point of order.1860    Ms. Waters. The gentleman has written in the----1861    Chairman Meuser. Ms. Waters, the gentlelady is not1862recognized. You understand that.1863    Ms. Waters. I want the record corrected.1864    Chairman Meuser. Nobody would do this during your hearing.1865It is inappropriate and out of order.1866    Ms. Waters. I want it to be corrected that the gentleman1867said----1868    Chairman Meuser. I would like to thank our witnesses for1869their testimony today.1870    Ms. Waters. The gentleman said----1871    Chairman Meuser. I request unanimous consent to enter two1872documents----1873    Ms. Waters. That he did not say President Trump. He did say1874President----1875    Chairman Meuser. Ms. Waters, this is highly inappropriate1876and completely out of order.1877    Ms. Waters. It is in the record.1878    Chairman Meuser. Yes, nice. I want to thank our witnesses1879very much. I request unanimous consent to enter two documents1880into the record.1881    One is a statement from the Consumer Credit Insurance1882Association.1883    The other document is titled, the Abuse and Vilification of1884James and Melissa Carnes. Without objection, so ordered.1885Without objection, all members will have legislative days----18861887    [The information referred to was not submitted prior to1888printing.]18891890    Mr. Green. Mr. Chairman, I ask for unanimous consent.1891    Chairman Meuser. In which to submit additional--as soon as1892I am finished, I will yield to you.1893    Mr. Green. Thank you.1894    Chairman Meuser. Written questions for the witnesses to the1895chair. The questions will be forwarded to the witnesses for1896their response, and I ask our witness to please respond no1897later than July 31, 2025. This hearing is adjourned.1898    Mr. Green. Mr. Chairman, you were going to--my unanimous1899consent. You were going to entertain it, my unanimous consent.1900I ask unanimous consent that Ms. Waters' comments be entered1901into the record as corrections.1902    Mr. Moore. I object.1903    Chairman Meuser. There is an objection. The hearing is1904adjourned. We are not going to do it twice.19051906    [Whereupon, at 11:36 a.m., the subcommittee was adjourned.]19071908                                APPENDIX19091910                              ----------19111912                   MATERIALS SUBMITTED FOR THE RECORD1913[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]19141915                                 [all]