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The Justice Department has committed to ending a controversial Obama-era program that discourages banks from doing business with a range of companies, from payday lenders to gun retailers, the Politico reported today. In a letter to House Judiciary Chairman Bob Goodlatte (R-Va.), Assistant Attorney General Stephen Boyd referred to the program as “a misguided initiative." Under President Barack Obama, the department said that the effort was intended to root out fraud by banks and payment processors and to cut off the banking system from wrongdoing by merchants.

The Consumer Financial Protection Bureau (CFPB) yesterday filed a complaint and proposed settlement against Aequitas Capital Management, Inc. and related entities, for aiding the Corinthian Colleges’ predatory lending scheme, according to a CFPB press release. The CFPB alleges that Aequitas enabled Corinthian to make high-cost private loans to Corinthian students so that it would seem as if the school was making enough outside revenue to meet the requirements for receiving federal student aid dollars. The risky loans saddled students with high-priced debt that both Aequitas and Corinthian knew students could not afford. Under the CFPB’s proposed settlement, if approved, about 41,000 Corinthian students could be eligible for approximately $183.3 million in loan forgiveness and reduction. In collaboration with the CFPB, several state attorneys general have also reached proposed settlements with Aequitas.

As its independent, single-director design continues to come under attack, the Consumer Financial Protection Bureau (CFPB) this week trumpeted a judge’s recent refusal to toss the agency’s allegations that student loan servicer Navient Corp. mishandled payments and its communications with borrowers, the National Law Journal reported today. A federal judge in Scranton, Pennsylvania, last week denied Navient’s motion to dismiss the CFPB lawsuit, in which the company contested the constitutionality of the bureau’s structure. The judge, Robert D. Mariani of the U.S. District Court for the Middle District of Pennsylvania, rejected arguments that the CFPB’s leadership structure—combined with an independent funding stream that does not subject it to congressional appropriations—violates the Constitution. The CFPB’s single-director design, “in and of itself, does not offend the Constitution,” Mariani wrote, pointing out that the Office of Special Counsel, Federal Housing Finance Agency and Social Security Administration have comparable leadership structures. The CFPB made sure Wednesday that Judge Mariani’s decision would not go unnoticed in Minnesota and Manhattan, where it’s facing similar motions to dismiss. In the U.S. District Court for the Southern District of New York, the CFPB joined with New York Attorney General Eric Schneiderman’s office to notify Judge Loretta Preska of Mariani’s ruling. Preska is presiding over the CFPB and the New York attorney general’s case against RD Legal Funding, a company accused of scamming 9/11 first responders and National Football League concussion victims out of millions of dollars by luring them into costly advances on settlement payouts.

Student loan giant Navient Corp. has suffered a pair of courtroom defeats in its attempt to block government lawsuits alleging the nation’s largest student debt company mistreated borrowers, Bloomberg News reported today. The losses come in a trio of lawsuits filed in January by the U.S. Consumer Financial Protection Bureau and state attorneys general of Washington and Illinois. They collectively allege Navient mistreated hundreds of thousands of student debtors by taking shortcuts to minimize its own costs, while adding what the CFPB said was as much as $4 billion in interest charges to borrower loan balances. Navient illegally steered struggling borrowers facing long-term hardship into payment plans that temporarily postponed bills (while interest continued to accrue), the officials alleged, rather than helping them enroll in federal programs that cap payments relative to their earnings and offer the promise of loan forgiveness. Navient has denied the allegations. On Friday, U.S. District Judge Robert D. Mariani in Scranton, Pennsylvania, denied Navient’s motion to dismiss the CFPB lawsuit. Mariani wrote in his ruling that Navient’s argument that its activities complied with the Higher Education Act, Department of Education regulations, and its loan servicing contract with the Education department didn’t relieve the company of its obligation to not commit unfair, deceptive, or abusive acts in violation of the Consumer Financial Protection Act.

A new House Republican bill to fund the government includes key parts of the GOP Dodd-Frank replacement package the House passed this month, giving lawmakers another opportunity to try to put deregulatory legislation on President Trump's desk, the Washington Examiner reported yesterday. The fiscal 2018 financial services appropriations bill introduced by the House Appropriations Committee yesterday would extend Congress' control of the Consumer Financial Protection Bureau and prevent it from regulating payday lenders, among other measures. The bill also would repeal the Volcker Rule that prevents banks from speculating with insured deposits and eliminate regulators' new power to regulate non-banks that they think could pose a threat to the financial system.

President Trump has been strangely reluctant to remove Consumer Financial Protection Bureau (CFPB) director Richard Cordray, but his own Treasury Department has made an excellent case for dismissal, according to a Wall Street Journal editorial today. Last week Treasury issued a report with recommendations to increase certainty, consumer choice and access to credit in the financial system. Some of Treasury’s recommendations would require legislation — such as making the agency subject to congressional appropriations — though most could be achieved through regulatory and procedural changes by the CFPB. The problem is that Cordray won’t accept curbs on his power, according to the editorial. Dodd-Frank states that the President may remove the director only for “inefficiency, neglect of duty, or malfeasance in office” rather than at-will like other agency heads.

The Trump administration will recommend limits on the U.S. consumer-finance regulator and a reassessment of a broad range of banking rules in a report to be released as early as today, the Wall Street Journal reported. The report from the Treasury Department, drafted in response to a February executive order from President Donald Trump, is less sweeping than financial legislation approved by the House of Representatives last week, these people said. That suggests the administration is taking a more pragmatic path than some Republicans who want to throw out Obama-era financial rules wholesale, although administration officials are still seeking to loosen regulatory restrictions on banks in significant ways. The report is around 150 pages and makes recommendations on policy goals, without laying out a specific process for achieving them. It is harshly critical of the Consumer Financial Protection Bureau and recommends that the bureau be stripped of its authority to examine financial institutions. By law, the bureau has the authority to enforce consumer laws as well as to examine individual firms on a continuing basis.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said yesterday that he’s considering seeking contempt of Congress charges against the director of the Consumer Financial Protection Bureau (CFPB), The Hill reported. Hensarling said that CFPB Director Richard Cordray has refused to turn over documents his panel requested for its investigation into Wells Fargo’s sales practices. A report from the Financial Services Committee’s Republican staff released on Tuesday argued that Cordray’s refusal was grounds to pursue contempt of Congress charges. The CFPB fined Wells Fargo $100 million in September 2016 for opening and charging fees for more than 2 million bank and credit accounts for customers without their authorization. The Office of the Comptroller of the Currency (OCC) and the City of Los Angeles were also involved in the investigation of practices first revealed by the Los Angeles Times in 2013. GOP lawmakers on the panel have argued that Cordray and the CFPB were “asleep at the wheel” and jumped into the investigation late to take credit.