St. John's University Law Faculty Blog

Professor Jeff Sovern was a panelist at the University of Houston Law Center’s Tenth Teaching Consumer Law Conference, held in Santa Fe, New Mexico, on May 18. Sovern’s topic was “Teaching Consumer Law: What Has Been Included–What Should Be?”

Jeff Sovern

[CFPB Acting Director] Mulvaney once called the bureau a “sad, sick joke” and co-sponsored a bill to eliminate it. The solution he has adopted to run an agency he thinks should not exist is to “be a good bureaucrat,” and do what the law requires — but no more. Mulvaney even extends this strict-construction approach to congressional testimony: He explained that he did not have to answer questions from the members of Congress because the statute said he had to “appear” before them but said nothing about responding to their queries — though he did so.

A problem with this grudging approach is that no legislature can write statutes to prohibit all the ways businesses devise to take advantage of consumers. When the bureau, then led by Obama appointee Richard Cordray, fined Wells Fargo $100 million for opening millions of unauthorized accounts, it did not rely on a statute that said banks cannot open sham accounts, because there is no such statute. Instead, the bureau used the more general authority Congress had given it to punish banks for unfair and abusive practices.

But a Consumer Financial Protection Bureau that interprets those powers as applying only to Wells Fargo will not provide consumers needed protection against other financial institutions. And not even Wells Fargo would have to worry if the Republican-controlled House of Representatives gets its way on a bill it passed to do away with the bureau’s power to sue financial institutions for unfair and abusive practices.

On May 8, Sovern was quoted in the Washington Examiner in an article headlined House Votes to End Obama-era Auto Lending Crackdown, kicking off legal debate​. According to the article:

“In the longer term, if the bureau gets leadership that wants to enforce the underlying law, I still doubt that it changes enforcement because the [Congressional Review Act] does not say anything about enforcement,” noted Jeff Sovern, a law professor at St. John’s University, “but rather only prohibits disapproved rules from taking effect and bars the agency from issuing rules that are substantially the same.”

Sovern is one of a few academics who have been in a debate over the ramifications of the disapproval with lawyers with Ballard Spahr, a law firm that represents financial institutions.
​

Finally, on April 9, BNA/Bloomberg ran an article captioned CFPB’s Mulvaney, Democrats Prepare for Battle in Congress about a forthcoming congressional hearing. The article stated:

There have also been changes in CFPB fair lending enforcement and data collection policies that need answers, said Jeff Sovern, a professor at St. John’s University Law School.

“This is an opportunity to learn more about what is happening at the bureau and for the members of the committee to fulfill their oversight function and I hope that is what happens,” Sovern said in an email.