U.S. Senator Elizabeth Warren (D-MA) and Director of the U.S. Office of Management and Budget Russell Vought.
Kevin Mohatt | Kevin Lamarque | | Reuters
Sen. Elizabeth Warren on Friday accused the acting head of the Consumer Financial Protection Bureau of undermining President Donald Trump’s stated efforts to make credit cards more affordable, according to a letter obtained exclusively by CNBC.
In a letter to Acting CFPB Director Russell Vought, Warren, D-Mass., noted that over the past year the agency dropped a rule limiting late fees on credit cards, sided with lenders in lawsuits over deceptive practices and suspended enforcement actions against the industry.
Earlier this month, Trump demanded in a social media post that U.S. banks voluntarily cap credit card interest rates at 10% for one year. When they failed to do so, Trump this week called on lawmakers to pass legislation on the issue.
“I spoke with President Trump last week and told him that Congress could pass legislation to cap credit card rates, if he fought for it,” Warren wrote in her letter to Vought.
“As Congress considers legislation to address this problem, your own actions directly undermine the President’s stated goals,” she wrote. “Under your leadership, the CPFB has taken steps to make it easier, not harder, for big banks and credit card companies to rip off Americans.”
Warren’s letter builds on Trump’s focus on affordability and seeks to leverage her initiative against her own administration, increasing tensions around the financial regulatory agency she helped create during the Obama administration. Members of the Trump administration have sought to shut down the CFPB as part of a broader agenda of business-friendly deregulation.
Current and former CFPB employees said the agency was on life support under Vought, who fought in court to enact mass layoffs and end funding to the agency.
An agency spokesperson said the CFPB is not authorized to limit credit card rates under the Dodd Frank Act.
Vought should “use the full scope of [the CFPB’s] “Authorities need to address excessive credit card costs and crack down on bad actors,” instead of trying to dismantle the agency, Warren wrote.
She ordered Vought to “immediately reinstate its rule capping late fees on credit cards at $8, which would save Americans more than $10 billion a year,” Warren said.
She argued that Vought should also combat deceptive practices regarding industry deferred interest promotions, resume enforcement of rules related to monitoring interest rate increases, respond to a growing pile of consumer complaints, and end bait-and-switch tactics with rewards programs.
“Either President Trump doesn’t really want to make credit cards more affordable, or you are insubordinately ignoring his directives,” she wrote.
