If you hate scammers, I have some good news and some bad news for you.
The good news: the Consumer Financial Protection Bureau (CFPB), under the leadership of Director Rohit Chopra, is cracking down on corporate predators at a record pace. Since taking office last year, Chopra has taken sweeping enforcement action against companies who repeatedly rip off their customers. These include banking giants U.S. Bank and Trustmark for abusing consumer data and discriminating against minority borrowers, student loan servicer Edfinancial for trying to dupe borrowers out of loan forgiveness, payment processor Brightspeed for scamming the elderly, and pawn lenders FirstCash Inc. and Cash America West for charging high-interest loans to military families.
Last week, President Biden — flanked by Chopra and Federal Trade Commission Chair Lina Khan — announced a sweeping new crackdown on surprise “junk fees” from banks, airlines, cable companies, and other industries. Chopra’s CFPB has taken aim at overdraft and depositor fees in the financial sector, warning the nation’s biggest banks that such practices are “likely unfair and unlawful under existing law.” For every American sick of greedy corporations hitting them with surprise charges, the Biden administration’s anti-junk fee campaign is a godsend.
The bad news? The CFPB’s very existence is now in jeopardy.
One week before the White House’s event, three Trump-appointed judges on the Fifth Circuit Court of Appeals deemed the CFPB’s funding mechanism unconstitutional (under the 2010 Dodd-Frank law, the Bureau is intentionally independent of Congressional appropriations and receives funding from the Federal Reserve system). If left in place, the ruling would eviscerate the CFPB’s budget and defund its enforcement work, leaving its continued existence at the mercy of Congressional Republicans who have long sought to scrap the agency.
Public Citizen president Robert Weissman blasted the ruling as a “gift to scammers and rip-off artists, payday lenders, and big banks,” warning that it could retroactively invalidate many of the CFPB’s rules and enforcement actions (indeed, corporate lawbreakers TransUnion and MoneyGram have already cited the ruling to dismiss pending CFPB enforcement actions against them.) Legal experts have similarly criticized the ruling as an act of right-wing judicial activism. According to the Constitutional Accountability Center, the decision ignores long-standing legal precedent and endangers the funding structure of other financial regulators, including the Office of the Comptroller of the Currency, the Federal Housing Finance Agency, and the Federal Reserve Board.
While some press outlets have done a serviceable job explaining the facts of the ruling itself and its potential impact on financial markets, they have failed their readers in a much more crucial regard: repeatedly quoting industry lobbying groups without providing crucial additional context about their anti-CFPB work.
One such example comes from Capitol Hill staple Roll Call, whose readership ranges from casual political observers to Washington’s most powerful lawmakers. In an October 28th article on the Fifth Circuit ruling, Roll Call speaks to Bill Hulse, the vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC), about the case. Hulse gleefully muses that the Supreme Court would side with the Fifth Circuit on “administrative state overreach” grounds, potentially invalidating all of the CFPB’s work over the last 10 years. He also proposes Congress simply pass a bill in the coming lame duck session to subject the CFPB’s funding to the appropriations process.
While the Roll Call article does briefly acknowledge such a bill would “undermine [CFPB]’s independence” and that the Chamber is also engaged in a separate lawsuit with CFPB, it sheds no further light on Hulse and the Chamber – effectively presenting them as independent expert voices on the matter. This type of coverage is not unique to Roll Call – Reuters, Bloomberg, and Axios have all quoted Hulse and his employer as expert voices on financial regulatory issues in the past year.
That’s a huge problem. As I detailed in a September white paper, at least seven Chamber leaders have disturbingly close ties to corporate criminals who Chopra has singled out for predatory behavior. The Chamber has also launched a six-figure ad buy against Chopra, smearing him as an “out-of-control bureaucrat”, and sued him for trying to crack down on discrimination by Big Banks (something the Roll Call piece severely downplays as a dispute over “changes to the agency’s examination manuals.”) Hulse has a major financial stake in Roll Call readers thinking poorly of Chopra, but is presented as just another expert with an independent take.
Indeed, the Roll Call piece and other Hulse and CCMC press appearances have omitted key details about who Bill Hulse and the CCMC are. As I wrote in the American Prospect last month, the CCMC was one of the earliest opponents of the CFPB and the Dodd-Frank law that created it, spending millions on campaign-style attack ads in 2010 to kill the Bureau before it was even born. The CCMC’s top ranks are almost entirely composed of former banking lobbyists and Republican legislative aides – including Hulse, who previously worked as a lobbyist for the American Bankers Association and aide to outspoken CFPB opponent (and ABA campaign cash recipient) Randy Hultgren.
Mainstream outlets also seem to love quoting anti-CFPB Republican lawmakers without disclosing their campaign contributions. Retiring Pennsylvania Senator Pat Toomey, the ranking member on the Senate Banking Committee, is quoted frequently about the CFPB in outlets like Axios, CNN, and Politico. Left out of these articles is valuable context about Toomey: he is a top recipient of campaign cash from the finance and payday lending industries and is himself a former investment banker. (and one probably won’t require many guesses to determine who will be paying Toomey big money upon his January 3rd, 2023 departure from the Senate)
Republican Congressman Patrick McHenry, a Chamber darling who is jockeying to be the next House Financial Services Committee chairman, has likewise had his quotes about the CFPB featured in mainstream outlets without any disclosure of his campaign donations: ABA and Bank of America are his top campaign contributors and he is the ninth-highest Congressional recipient of payday lending industry cash of all time. To ignore these underlying dynamics when quoting Toomey, McHenry, and other Wall Street lapdogs is media malpractice.
Even the media’s coverage of the Fifth Circuit itself is missing some vital context. Outlets including CNBC and Politico have omitted mention of the court’s hard-right hyperpartisan lean — a consequence of Trump stacking the court with far-right extremists — when covering the CFPB case. This is particularly bizarre given that the Fifth Circuit’s radical turn under Trump is far from an unknown story. It has been covered by outlets like the Texas Tribune, Slate, and The Guardian over the last four years. Even Cory Wilson, the Trump judge who wrote the opinion deeming the CFPB’s funding structure unconstitutional, has himself been a national news story for his past life as a Twitter troll and radical anti-abortion stance. Yet Wilson is at best a footnote in the mainstream media’s coverage of the Fifth Circuit’s ruling, despite receiving thousands in campaign donations from the banking industry during his time as a Mississippi state lawmaker.
With Chopra’s CFPB likely to request a stay and further judicial review of the Fifth Circuit ruling, this war between corporate scammers and consumer protection advocates shows no signs of ending anytime soon. As mainstream outlets continue to cover this vital story, they should look to their peers in progressive media for tips on telling the whole story when quoting industry groups or discussing their work. Jordan Uhl, writing for his newsletter in a piece that was later picked up by Jacobin, has done a terrific job peeling back the curtain on the CFPB’s most outspoken opponents with campaign finance and lobbying data. Vox’s Ian Milhiser has treated the Fifth Circuit’s legal reasoning with the unvarnished derision it deserves, using Supreme Court precedent to explain why the ruling is “completely incoherent.” And The Prospect’s David Dayen has explained in compelling terms how the case threatens “the functioning of daily life” for millions of people by endangering not only the CFPB, but also vital safety net programs like Medicare and Social Security.
We might expect more traditional outlets to be less colorful than progressive outlets in discussing the sleazy realities which animate this assault on the CFPB. But the mainstream media should be no less thorough in sharing relevant facts with their readers.