U.S. Senator Elizabeth Warren (D-MA) and U.S. Office of Management and Budget Director 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 attempt 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 in the past year the agency eliminated a rule limiting late payment fees on credit cards, sided with lenders in lawsuits over deceptive practices and halted 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 a year. When they didn't, Trump this week asked lawmakers to pass legislation on the issue.
“I spoke to President Trump last week and told him that Congress could pass legislation to cap credit card rates if he would fight for it,” Warren wrote in her letter to Vought.
“As Congress considers legislation to address the issue, your own actions are directly undermining the president's stated goals,” he wrote. “Under his leadership, the CPFB has taken steps to make it easier, not harder, for big banks and credit card companies to defraud Americans.”
Warren's letter takes advantage of Trump's turn toward affordability and seeks to leverage her initiative against her own administration, raising tensions over the financial regulatory agency she helped create under the Obama administration. Members of the Trump administration have sought to shut down the CFPB as part of a broader pro-business deregulation agenda.
Current and former CFPB employees have said the agency is on life support under Vought, who has fought in court to enact mass layoffs and stop funding the agency.
An agency spokesperson said the Dodd Frank Act did not allow the CFPB to cap credit card rates.
Vought should “utilize the full scope of [the CFPB’s] authorities to address excessive credit card fees and crack down on bad actors,” rather than trying to dismantle the agency, Warren wrote.
She ordered Vought to “immediately reinstate its rule limiting late fees on credit cards to $8, which would save Americans more than $10 billion a year,” Warren said.
He argued that Vought should also curb deceptive practices around the industry's deferred interest promotions, resume enforcement of rules on tracking interest rate increases, respond to a growing pile of consumer complaints and stop bait-and-switch tactics with rewards programs.
“Either President Trump is not serious about making credit cards more affordable or you are insubordinately ignoring his instructions,” he wrote.
