In response to the financial crisis that began in 2008, in 2010 President Obama signed into law the Wall Street Reform and Consumer Protection Act, commonly referred to as the “Dodd-Frank Act.”1 A “centerpiece of the [new law] was the creation of the Consumer Financial Protection Bureau (“CFPB”),”2 which was established in response to the perception of widespread failures in the federal consumer protection regime with respect to financial products and the belief that these regulatory failures contributed to the financial crisis.3 But the reach of the CFPB goes far beyond mortgages and other financial products that were at the heart of the recent recession and reaches all consumer credit products, including small-loan products such as payday lending and pawnshops as well as nonlenders such as mortgage brokers and debt collectors.4
In the wake of the financial crisis and the subsequent political response, short-term consumer lending products such as payday lending, bank overdraft protection, and pawnshops have grown in both popularity and regulatory scrutiny.5 The crisis-induced recession, the retrenchment in retail banking, and the consequences of many regulations enacted in the period since the recession began have reduced access to mainstream consumer credit products such as credit cards, home equity loans, and mortgages, thereby increasing demand for alternative credit products.6 The CFPB’s mandate to advance the goal of heightened consumer protection is multifaceted.
The facet on which we focus here is Dodd-Frank’s requirement to “enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.”7 Dodd-Frank further requires the CFPB to implement a regulatory regime that treats comparable products consistently, regardless of whether they are offered by a bank, a nonbank lender, or some other provider of consumer financial products.8 The CFPB, in turn, has interpreted this mandate to require it to “[p]romote fair competition by consistent enforcement of the consumer protection laws in the [CFPB’s] jurisdiction . . . .”9