CFPB Blurs Line Between Enforcement, Regulation

Nearly five years have passed since the Consumer Financial Protection Bureau was created with a core mission of protecting consumers. In that time, the Office of Enforcement has played a prominent and aggressive role, bringing a number of highly publicized cases resulting in substantial settlements. Because of the CFPB’s broad powers and aggressive posture, and because institutions are justifiably concerned about litigating with their regulators, most cases have been settled rather than litigated. The CFPB’s public actions have effectively blurred the lines between enforcement and regulation by prompting industry change without the need for formal ­rulemaking.

The bureau brought its first public action on July 18, 2012, just days before its one-year anniversary. CFPB Administrative Proceeding, File No. 2012-CFPB-0001. It alleged that Capital One Financial Corp. had engaged in the deceptive sale and marketing of credit card “add-on products,” such as credit monitoring and payment protection. Capital One agreed to refund nearly $140 million to consumers and pay an additional $25 million civil money penalty.