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    Buying a Home? Without the CFPB, You Need to Be Your Own Watchdog.

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    The C.F.P.B. had kept a close eye on mortgage lenders. But with the bureau hobbled, consumers should take several steps, starting with shopping for the best mortgage rates.House prices are stubbornly high, and mortgage rates remain substantially above their prepandemic level. Now, with the spring home buying season looming, shoppers have a new worry: A major federal consumer watchdog has been hobbled.Without the Consumer Financial Protection Bureau, the agency responsible for overseeing most aspects of the home buying process, consumer advocates say home buyers need to be their own watchdogs.“Now, when you buy a house, you are much more vulnerable to being misled,” said Sharon Cornelissen, housing director with the Consumer Federation of America. “It’s important to be on guard, because guardrails are being taken away.”Buying a home is the biggest financial decision most Americans will make in their lives. The typical home price is about $397,000, according to the National Association of Realtors, but prices are far higher in some parts of the country. In several California counties, for instance, the median price at the end of last year was over $1.5 million, with monthly mortgage payments over $8,000.What role has the consumer bureau played in home buying?The consumer bureau was created after the financial and housing crisis in 2007-8 to streamline oversight of lenders and financial companies serving consumers. Over the years, the bureau has moved to ease the mortgage shopping process by offering simplified forms and educational tools, and has taken action against an array of banks and lenders. In 2022, for instance, the bureau ordered Wells Fargo to pay $3.7 billion for mishandling a variety of customer accounts, including improperly denying thousands of requests for mortgage loan modifications that in some cases led borrowers to lose their homes to “wrongful” foreclosures.On Jan. 17, in the final days of the Biden administration, the bureau reached a settlement with Draper and Kramer Mortgage Corporation for discouraging borrowers from applying for loans to buy homes in majority Black and Hispanic neighborhoods in Chicago and Boston. In an email, the lender’s lawyers said Draper and Kramer “considers the matter closed and denies” the bureau’s claims, but chose to settle in part to avoid “protracted legal costs.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      How Consumers Can Protect Themselves With the CFPB on Pause

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      Rules on bank and credit card fees, medical debt and payment apps are in limbo. One thing you can do is carefully check your financial statements, one expert says.With the government seemingly stepping back from regulatory duties, consumers may have to act as their own financial watchdogs.The Consumer Financial Protection Bureau, the independent federal agency created after the 2008 financial crisis to shield people from fraud and abuse by lenders and financial firms, has been muzzled, at least temporarily.“Everything is on pause right now,” said Delicia Hand, senior director of digital marketplace with Consumer Reports. “So it’s back on consumers to be extra diligent.” Ms. Hand previously spent nearly a decade in a variety of roles at the Consumer Financial Protection Bureau, including overseeing complaints and consumer education, before departing in 2022.In early February, the Trump administration ordered the consumer bureau to mostly cease operations. It closed its Washington headquarters, fired some employees and put most of the rest of the staff on administrative leave, and opted not to seek funding for its activities. Several lawsuits are challenging the administration’s actions. On Feb. 14, a federal judge in Washington ordered the bureau to halt firing workers and not to delete data, pending a hearing scheduled for Monday.The administration, however, has already dialed back enforcement — dropping, for instance, a suit accusing an online lender of promoting free loans that actually carried high interest rates. On Thursday, the bureau dismissed a lawsuit that it had brought in January accusing Capital One of cheating customers out of some $2 billion in interest.It’s a stark change for an agency that had been energetic in adopting rules and filing lawsuits aimed at aiding consumers. Under the Biden administration, the bureau moved to reduce or eliminate various fees charged by banks and other financial firms and to remove unpaid medical debt from credit reports, and it fined a major credit reporting bureau for misleading consumers about credit freezes.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Elon Musk’s DOGE Overhauls the Consumer Financial Protection Bureau

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      The upheaval at the Consumer Financial Protection Bureau offers a glimpse into the playbook that Elon Musk and other Trump allies seem to be writing in real time.At first, things at the Consumer Financial Protection Bureau seemed eerily calm.The Biden-appointed director of the agency, which was created after the 2009 financial crisis to regulate banks and other lenders, was not immediately fired by President Trump. The lawyers at the agency continued with their business. In late January, they said a remittance company was misleading customers about its fees and ordered it to pay a $2.5 million fine.And then the chaos began.On the morning of Feb. 1 — a Saturday — the director was dismissed, as my colleague Stacy Cowley, who has followed every twist and turn of this story, reported. By the next Friday, Feb. 7, Russell Vought, the director of the Office of Management and Budget and a close Trump adviser, was installed as the C.F.P.B.’s acting director. Representatives from the new Department of Government Efficiency, which is led by Elon Musk and is not a formal executive-branch department, arrived and got access to the computer systems.Musk posted a message on his X account: “CFPB RIP.”Musk’s cost-cutting team has been operating with little transparency. Members don’t announce what they’re doing, who’s doing it or how. So it’s worth understanding what’s happening at the C.F.P.B., both because of the direct impact on the agency’s work and because it’s a glimpse into the playbook that Musk and his team, working with Trump officials like Vought, seem to be writing in real time.The panic strategyRussell Vought on Capitol Hill this week.Haiyun Jiang for The New York TimesLast Saturday, Vought ordered the nearly 1,700 people who work at the agency to stop much of their work. The edict prompted widespread fear and deep concern about the agency’s future. People worried that their work phones and computers were being tracked. One employee I spoke with, who asked not to be identified out of fear of retaliation, felt panic, and then remembered that Vought had spoken in 2023 of his intent to demoralize workers in the civil service.“We want the bureaucrats to be traumatically affected,” Vought had said.Some employees tried to plug away at their jobs. Two of them told me that after they saw Musk’s post on X about his team’s preference for working on weekends, when federal offices are closed, they decided they would do the same. On Saturday, they saw three employees from Musk’s team in the bureau’s basement, working in conference rooms with the windows papered over.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      36 Hours After Russell Vought Took Over Consumer Bureau, He Shut Its Operations

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      The agency had been one of Wall Street’s most feared regulators, with the power to issue rules on mortgages, credit cards, student loans and other areas affecting Americans’ financial lives.The day before Linda Wetzel closed on her retirement home in Southport, N.C., in 2012 — a cozy place where she could open the windows at night and catch an ocean breeze — the bank making the loan surprised her with a fee she hadn’t expected. Ms. Wetzel scoured her mortgage paperwork and couldn’t find the charge disclosed anywhere.Ms. Wetzel made the payment and then filed an online complaint with the Consumer Financial Protection Bureau. The bank quickly opened an investigation, and a month later, it sent her a $5,600 check.“My first thought was ‘thank you.’ I was in tears,” she recalled. “That money was a year or two of savings on my mortgage. It was my little nest egg.”Ms. Wetzel’s refund is a tiny piece of the work the bureau has done since it was created in 2011. It has clawed back $21 billion for consumers. It slashed overdraft fees, reformed the student loan servicing market, transformed mortgage lending rules and forced banks and money transmitters to compensate fraud victims.It may no longer be able to carry out that work.President Trump on Friday appointed Russell Vought, who was confirmed a day earlier to lead the Office of Management and Budget, as the agency’s acting director. Mr. Vought was an author of Project 2025, a conservative blueprint for upending the federal government that called for significant changes, including abolishing the consumer bureau.In less than 36 hours, Mr. Vought threw the agency into chaos. On Saturday, he ordered the bureau’s 1,700 employees to stop nearly all their work and announced plans to cut off the agency’s funding. Then on Sunday, he closed the bureau’s headquarters for the coming week. Workers who tried to retrieve their laptops from the office were turned away, employees said.The bureau “has been a woke & weaponized agency against disfavored industries and individuals for a long time,” Mr. Vought wrote Sunday on X. “This must end.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Navient Reaches $120 Million Student Loan Settlement With Consumer Watchdog

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      The company has been banned from servicing federal student loans and must pay $100 million to harmed borrowers, as well as a $20 million penalty.Navient, formerly one of the nation’s largest student loan servicers, reached a $120 million settlement with federal regulators on Thursday to resolve claims that it misled federal student loan borrowers and mishandled their payments for years.The Consumer Financial Protection Bureau said the deal would permanently ban the company from managing federal student loans and require it to pay $100 million in restitution to affected borrowers along with a $20 million penalty.The consumer watchdog’s suit had accused Navient of failing borrowers at every step of repayment: Among other misdeeds, it said the company steered borrowers away from more affordable income-driven repayment plans and into forbearance, which padded its own profits and forced borrowers to pay more than they had to.“For years, Navient’s top executives profited handsomely by exploiting students and taxpayers,” said Rohit Chopra, the director of the consumer agency. “By banning the notorious student loan giant from federal student loan servicing and ensuring the wind down of these operations, the C.F.P.B. will finally put an end to the years of abuse.”During a media call, agency officials said borrowers who were eligible for restitution payments did not need to do anything — the C.F.P.B. would mail checks to “hundreds of thousands” of federal student loan borrowers, after it analyzed which consumers were due payments. It’s unclear how long that will take. (The agency also warned borrowers to beware of scammers who might try to use C.F.P.B. imagery to steal money or private information.)The settlement closes the book on two related legal actions that date back to 2017, when the consumer protection agency and two state attorneys general — later backed by a coalition of attorneys general in 27 other states — sued Navient.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Where Does Biden’s Student Loan Debt Plan Stand? Here’s What to Know.

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      The Supreme Court refused to allow a key part of President Biden’s student debt plan to move forward. Here’s what’s left of it, and who could still benefit.President Biden’s latest effort to wipe out student loan debt for millions of Americans is in jeopardy.The Supreme Court on Wednesday refused to allow a key component of the policy, known as the SAVE plan, to move forward after an emergency application by the Biden administration.Until Republican-led states sued to block the plan over the summer, SAVE had been the main way for borrowers to apply for loan forgiveness. The program allowed people to make payments based on income and family size; some borrowers ended up having their remaining debt canceled altogether.Other elements of Mr. Biden’s loan forgiveness plan remain in effect for now. And over the course of Mr. Biden’s presidency, his administration has canceled about $167 billion in loans for 4.75 million people, or roughly one in 10 federal loan holders.But Wednesday’s decision leaves millions of Americans in limbo.Here is a look at what the ruling means for borrowers and what happens next:Who was eligible for SAVE?Most people with federal undergraduate or graduate loans could apply for forgiveness under SAVE, which stands for Saving on a Valuable Education.But the amount of relief it provided varied depending on factors such as income and family size. More than eight million people enrolled in the program during the roughly 10 months that it was available, and about 400,000 of them got some amount of debt canceled.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Supreme Court Rejects Challenge to Consumer Watchdog’s Funding

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      A decision against the agency, the Consumer Financial Protection Bureau, could have cast doubt on all of its regulations and enforcement actions.The Supreme Court rejected a challenge on Thursday to the way the Consumer Financial Protection Bureau is funded, one that could have hobbled the bureau and advanced a central goal of the conservative legal movement: limiting the power of independent agencies.The vote was 7 to 2, with Justice Clarence Thomas writing the majority opinion.Had the bureau lost, the court’s ruling might have cast doubt on every regulation and enforcement action it had taken in its 13 years of existence, including ones concerning mortgages, credit cards, consumer loans and banking.The central question in the case was whether the way Congress chose to fund the bureau had violated the appropriations clause of the Constitution, which says that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.”Justice Thomas said the mechanism was constitutional.“Under the appropriations clause,” he wrote, “an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes. The statute that provides the bureau’s funding meets these requirements. We therefore conclude that the bureau’s funding mechanism does not violate the appropriations clause.”Justice Samuel A. Alito Jr., joined by Justice Neil M. Gorsuch, dissented.The bureau, created after the financial crisis as part of the 2010 Dodd-Frank Act, is funded by the Federal Reserve System, in an amount determined by the bureau so long as the sum does not exceed 12 percent of the system’s operating expenses. In the 2022 fiscal year, the agency requested and received $641.5 million of the $734 million available.A unanimous three-judge panel of the U.S. Court of Appeals for the Fifth Circuit, in New Orleans, ruled in 2022 that the bureau’s funding method ran afoul of the appropriations clause.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Judge Blocks New U.S. Rule Limiting Credit Card Late Fees

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      Set to take effect on Tuesday, the rule would save households $10 billion a year in “junk fees,” the Consumer Financial Protection Bureau said.In March, the Consumer Financial Protection Bureau announced that a new federal rule would cap fees on late credit card payments at $8 a month, estimating that the change would save American households $10 billion a year.On Friday, a federal judge in Fort Worth temporarily blocked the rule, siding with bank and credit card company lobbyists who contend in a lawsuit that it is unconstitutional.The rule was scheduled to take effect on Tuesday. Now, the lobbyists can continue their legal fight in U.S. District Court before Judge Mark T. Pittman, who granted the preliminary injunction.The consumer bureau’s new rule would limit issuers to an $8 fee unless they could show that more money was needed to cover their collection costs. The bureau estimated that the rule would apply to more than 95 percent of all outstanding credit card balances.The Federal Reserve previously aimed to significantly limit credit card late fees in 2010. But a loophole in its rule, which permitted adjustments for inflation, allowed banks and credit card companies to charge an average of $32 a month in late fees, according to the consumer bureau.In announcing the new rule, Rohit Chopra, the bureau’s director, said it would end “the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines.” President Biden backed the rule, saying, “The American people are tired of being played for suckers.”Two days later, the U.S. Chamber of Commerce joined the American Bankers Association and the Consumer Bankers Association — whose boards of directors include executives from Bank of America, Capital One, Citibank and JPMorgan Chase — in suing Mr. Chopra and his bureau. Three Texas business associations are also plaintiffs. More

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      Looking for a Lower Credit Card Interest Rate? Good Luck.

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      Comparison sites often emphasize the big banks’ offerings even though smaller banks and credit unions typically charge significantly less.Credit card debt is rising, and shopping for a card with a lower interest rate can help you save money. But the challenge is finding one.Smaller banks and credit unions typically charge significantly lower interest rates on credit cards than the largest banks do — even among customers with top-notch credit, the Consumer Financial Protection Bureau reported last week.But online card comparison tools tend to emphasize cards from larger banks that pay fees to the sites when shoppers apply for cards, said Julie Margetta Morgan, the bureau’s associate director for research, monitoring and regulations. “It’s pretty hard to shop for a good deal on a credit card right now.”For cardholders with “good” credit — a credit score of 620 to 719 — the typical interest rate charged by big banks was about 28 percent, compared with about 18 percent at small banks, the report found.For those with poor credit — reflected by a score of 619 or lower — large banks charged a median rate of more than 28 percent, compared with about 21 percent at small banks. (Basic credit scores range from 300 to 850.)The variation in the rates charged by big banks and smaller ones can mean a difference, on average, of $400 to $500 a year in interest for cardholders with an average balance of $5,000, the bureau found.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More