The future of Elizabeth Warren's consumer watchdog is in doubt.
With Warren as the driving force, the Consumer Financial Protection Bureau was created after the financial crisis in 2011 to shield consumers. The CFPB has since established itself as a powerful regulator, unafraid to take on big banks, shady payday lenders and everything in between.
Despite some recent successes, such as the Wells Fargo scandal, the CFPB now finds itself under siege.
Republicans have called for everything from eliminating the CFPB entirely to yanking the CFPB's funding or replacing its director with a bipartisan board.
Efforts to defang the CFPB will run into fierce opposition from Warren. The Massachusetts Senator told CNNMoney in a statement that the CFPB has proven to be a strong consumer agency that "helps level the playing field for working families."
Warren argues that's why "big banks and their Republican allies in Congress are so eager to strangle the agency any way they can."
For their part, critics paint the CFPB as a runaway regulator slinging out so many rules that it's hurting Americans who need credit.
CFPB Director Richard Cordray has "inundated Main Street financial firms...with a flood of burdensome mandates," John Berlau, a senior fellow at the libertarian Competitive Enterprise Institute, wrote in a memo proposing changes for the Trump administration.
Berlau told CNNMoney he believes President-elect Donald Trump will have the grounds even under Dodd-Frank's stringent standards to remove Cordray for cause.
The CFPB was dealt a blow in October by a federal court that ruled the agency is "unconstitutionally structured" due to its single-director structure.
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But Cordray has signaled he's not going anywhere. The CFPB told CNNMoney Cordray "has no plans to step down" and noted he was confirmed by a bipartisan group of 66 senators.
The CFPB said that over the past five years its work has provided $12 billion in relief for some 27 million Americans. The CFPB has also secured more than $500 million in civil penalties.
The recent Wells Fargo (WFC) scandal also helped burnish the CFPB's watchdog brand. The case outraged the public because the shady behavior -- millions of fake accounts created with phony PIN numbers and email addresses -- didn't require a finance textbook to understand the bank's shenanigans, unlike the complex financial fraud that emanated during the crisis.
And while the CFPB didn't uncover the trouble at Wells Fargo (the L.A. Times and L.A. City Attorney did), the agency's $100 million fine packed the biggest punch.
"It really showed there was this agency looking out for retail consumers and willing to take enforcement actions, even against large banks," said Nathan Dean, a financial policy analyst at Bloomberg Intelligence.
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Other noteworthy CFPB actions include:
-Ordering Bank of America (BAC)to pay $727 million in refunds to 1.9 million customers who were illegally charged for credit card products they weren't receiving
- $700 million in consumer relief for illegal credit card practices impacting roughly 7 million Citigroup (C) accounts
-New rules and enforcement action to halt deceptive practices by more than two dozen payday lenders
The CFPB has also been praised for investing in financial literacy and creating a vast consumer complaint database that has compiled nearly 700,000 complaints. The CFPB analyzes the data to identify real problems in the marketplace.
But Berlau's Competitive Enterprise Institute thinks the CFPB has gone too far.
The group is suing the CFPB on behalf of a small Texas bank that claims CFPB regulation forced it to stop issuing mortgages. Berlau argues the CFPB's refusal to exempt smaller lenders from its qualified mortgage rules has hurt access to credit by making it easier to sue banks for overestimating borrowers' ability to pay.
Patricia McCoy, a Boston College Law School professor who oversaw CFPB mortgage policy in 2011, said the mortgage criticism is "unfounded" and pointed to research showing mortgage credit has expanded under the new rules.
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So what does the future look like for the CFPB?
Few expect the CFPB to be completely abolished, an outcome that McCoy warns would be a "dangerous course of action."
But it's possible the CFPB is defanged. It might get turned into a commission appointed by Democrats and Republicans. Such gridlock could slow down the CFPB's rulemaking and enforcement process.
There's also a push to make the CFPB, which is currently funded by the Federal Reserve, subject to Congressional appropriations.
"That would pack a big punch. Congress holds those purse strings closely and already uses them to underfund the SEC," McCoy said.
It's not yet clear whether Trump would support Republican efforts to rein in the CFPB given his populist rhetoric and supporters' distaste for big banks.
The president-elect has already signaled a desire to root out financial abuse. Trump asked Preet Bharara, the powerful U.S. Attorney for the Southern District of New York, to stay on. He's also considering Debra Wong Yang, a tough former federal prosecutor, to lead the SEC.
"The CFPB, after all, is a populist institution. I think it would be very hard for Trump to justify abolishing or rolling it back," said Robert Shapiro, a senior fellow at Georgetown's McDonough School of Business who has advised Democratic presidents.
