Jake Pearson

[Jake Pearson @JakePearsonProP]

CONSTITUTIONAL SWITCHEROO: In a ‘15 legal bid to kill the CFPB, then-US rep @SecDuffy defended Congress’ power of the purse to check POTUS. Under Trump, he reversed, defying lawmakers’ spending power by withholding billions in transportation funds https://t.co/t3gg7gGHZl

[Jake Pearson @JakePearsonProP]

SILICON VALLEY UPSIDE: Trump neutered the consumer watchdog. That’s good for investors like @pmarca, who want to remake the financial system. The CFPB probed 8 of his fintech portcos and tried to regulate $7B of his crypto funds. That’s all now off.

https://t.co/UVZFYUHzi0

[Ryan Tracy @ryanjtracy]

CFPB Endgame? We're hearing @russvought is considering a simple plan to shut the agency down: Letting it run out of cash. Would that be legal, you ask? Here's how it could play:

[Jake Pearson @JakePearsonProP]

WENDY WILLIAMS UNGUARDED: No one comes across as credible in @jessicabennett deep dive into why the celebrity DJ is under court-appointed monitoring — and who is looking out for her best interests. Echoes @propublica series into NY’s broken system.

https://t.co/lKmxx1MhiI

[Jake Pearson @JakePearsonProP]

DEBANKING THE CFPB: Trump, whose family business alleges they were booted as customers bc of politics, wants Fed regulators to crackdown on debanking. But he’s shutting down the CFPB, which was literally investigating why banks unfairly deny some customers https://t.co/PIE11PiFo3

[Jason Mikula @mikulaja]

🚨 BREAKING: CFPB says that by Sept'23 "both Evolve and Synapse were aware that there was a deficit of tens of millions of dollars in funds that Evolve was holding for End Users" in just-released complaint:

The CFPB complaint alleging Synapse violated the Consumer Financial Protection Act by engaging in "unfair" acts or practices by failing to maintain adequate records was filed as part of the bankruptcy case today, August 21st, I believe I'm the first to report.

While the complaint largely rehashes already disclosed information, it's now being alleged by a government agency. A couple interesting items worth noting:

-The CFPB alleges that "[c]onsumers did not have control over how Synapse moved or tracked funds across different Partner Banks that were holding their funds and processing their debit card, ACH, and wire transactions."

-and that "[c]onsumers were substantially injured because Synapse’s records did not match the records of its Partner Banks."

These are important as they're necessary elements to prove Synapse acted "unfairly."

The CFPB's complaint notes that not all fintech programs "migrated" to the Brokerage/cash management structure, meaning those programs' end users’ funds should have remained with Evolve.

The complaint notes (as was already known) that even for end users who were moved to the cash management program, "Evolve continued to act as a Partner Bank by providing access to certain banking products and services, including by continuing to sponsor debit cards. Evolve also continued to act as the receiving bank for ACH transfers for which consumers had previously been using Evolve’s routing number, such as direct deposit. Evolve continued to maintain accounts on behalf of these End Users to provide these services. Synapse would sweep funds from those accounts to Synapse Brokerage."

The complaint seeks to enjoin Synapse from further violations of the CFPA (a non-issue, as it's bankrupt), additional injunctive relief (also largely irrelevant), award relief the court finds necessary to redress injury to consumers (this theoretically could be a significant monetary amount, though the chance of recovering any money seems very low), and a civil money penalty (necessary to enable CFPB to tap victim relief fund).

It's worth noting that Synapse was a third-party service provider to Evolve. While the CFPB isn't making an accusation that Evolve engaged in "unfair" acts or practices, that doesn't preclude Evolve's regulators, the St. Louis Federal Reserve and the Arkansas State Bank Department, from potentially pursuing an enforcement action against Evolve for "unfair" practices conducted by Synapse on the bank's behalf (though I wouldn't hold your breath.)

Many states offer consumers a *private* right of action for a business' "unfair" conduct, potentially offering victims an avenue to file civil suits against Evolve stemming from Synapse's "unfair" conduct.

[Jake Pearson @JakePearsonProP]

COURT OKS CFPB KO: DC appeals court rules 2-1 that Trump can resume major downsizing of CFPB, lifting lower court judge’s April preliminary injunction. https://t.co/6d4z9oTEEo

[Jake Pearson @JakePearsonProP]

NY WEIGHS IN: For the first time since @propublica series details abuse, neglect in NY guardianships, expert panel advocates $15M annual investment, oversight of troubled system. But @GovKathyHochul won’t say whether she’ll adopt the plan. https://t.co/h3p6qUW5MT

[Jake Pearson @JakePearsonProP]

FOR IT BEFORE THEY WERE AGAINST IT: @jmdjacobs used FOIA to find GOP reps who voted to defund the CFPB earlier this year had referred their constituents to the agency when they were bilked by banks, lenders, etc…etc…

https://t.co/KEcTNLK6GC

[Jake Pearson @JakePearsonProP]

WHAT A DETAIL: Congress has slashed CFPB’s budget in half.
Trump has effectively shut it down. But OMB boss @russvought — who also runs CFPB — gets a $5M security detail footed by CFPB, per memo obtained by @EricM_Katz. https://t.co/NyA9SphDlt

[Jake Pearson @JakePearsonProP]

D senators press CFPB’s @russvought to justify dropped Navy Federal Credit Union junk fee case — which included $80M to customers. @RubenGallego says the dismissal suggests “commitment to service members is little more than lip service.” Via @KToropin

https://t.co/ypuue8gRyE

[Jake Pearson @JakePearsonProP]

If you’re a former/current CFPB staffer or work in industry, or you’re a consumer with a story, call/Signal me at 917-512-0276. More info here. END https://t.co/H8BSLDjNFG

[Jake Pearson @JakePearsonProP]

BREAKING: The enforcement chief at America’s consumer watchdog is quitting, @ProPublica has learned. Cara Petersen writes in her sign-off letter that it’s “clear that the Bureau’s current leadership has no intention to enforce the law in any meaningful way.” 1/

[Jake Pearson @JakePearsonProP]

In her resignation letter, Petersen writes that “never before have I seen the ability to perform our core mission so under attack.” She adds: “while I wish you all the best, I worry for American consumers.” The CFPB didn’t respond to a request for comment on the letter. 9/