President Trump is in everything else but closing the Consumer Financial Protection Agency. Even to him I deleted some cases submitted by CFPB Under the clock of former President Joe Biden. Agents aim to protect consumers from fraudulent practices in the financial industry.
Many people are asking: If CFPB is out of business, who is there to help consumers? The answer is 1 million lawyers. CFPB has been around for less than 15 years. Consumers were not helpless before that. You don't need any more government agencies to police the market. There is a plaintiff's bar.
The plaintiff's lawyers have noticed that many circles have gotten bad raps. But the truth is, we need someone to police the market. Private lawyers are a much better option than yet another government agency.
Let's take a look at one of the headline cases that Trump dropped. This is because the action against Capital One is allegedly involved in multi-billion dollar tricky practices in high-yield savings accounts.
CFPB I submitted the case a few days before Trump took office.. But the private bar Sued Capital 1 The same thing happened almost two years ago. Seven different class actions against it are now consolidated in federal courts in Virginia. The CFPB lawsuit was merely a lawsuit. The Capital One is not off the hook without it.
Certainly, consumers are in better hands now. The data shows that private bars get more when private lawyers and government pursue the same fraudsters. This is about simple incentives. The plaintiff's lawyers address contingencies and only receive payment if they win. Government officials will be paid no matter what they do.
Furthermore, private lawyers are not caught up in politics or special interests like government. Yes, most plaintiffs' lawyers are Democrats, but profit motives keep them pure. They will sue anyone who is responsible. They don't look the other way around because of the campaign contributions and the revolving door between industry and government. These are the exact same reasons why the private sector tends to do better work with the public sector in more ways.
Far from the drawback, the market is one of the secrets of success in America to rely on private bars to police. In Europe and other developed economies, you must get permission from the government before you can do things. In America, we mostly let you do what you want and then later sues you if you ruin it. I ask for forgiveness, not permission. Our approach led to a more agile, innovative, and ultimately a wealthy economy.
It is true that private lawyers sometimes go too far. There's nothing perfect, and there's a way to tighten the system. It is also true that private lawyers cannot do everything. If the remedies you need are not financial, or if the monetary remedies are small and cannot be organized into something like a class action lawsuit, it can be difficult to find a personal attorney to represent you. Maybe we need the government to step into such cases.
But the good news is that they already have a lot of governments. 50 State Attorney General, ready and willing to chase these bad guys. In addition, CFPB is not required.
Brian Fitzpatrick is Milton R. Underwood Chair at Free Enterprises and is a law professor at Vanderbilt Law School. He is the author of “Conservative Class Action Cases” (University of Chicago Press, 2019). He was the law clerk for the late Supreme Court Judge Antonin Scalia and a special advisor to Sen. John Cornyn (R-Texas).
