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57 June 2025 J O U R N A L June 2025 » Seeking a Shift in Policies The Wall Street Journal recently report- ed a letter was sent to CFPB staffers from Bureau Chief Legal Officer Mark Paoletta outlining how the agency will channel its focus on "tangible harm to consumers" through a reallocation of resources from enforcement and supervision activities executed by states. "The Bureau will focus its enforce- ment and supervision resources on pressing threats to consumers, particular- ly service members and their families, and veterans," said Paoletta in the memo. "To focus on tangible harms to consumers, the Bureau will shift resources away from enforcement and supervision that can be done by states. All prior enforcement and supervision priority documents are hereby rescinded." The memo notes that the Bureau will turn its attention to mortgage fraud as its "highest priority," followed by Fair Credit Reporting Act (FCRA)/Regulation V data furnishing violations; Fair Debt Collec- tion Practices Act (FDCPA)/Regulation F violations relating to consumer contracts/ debts; various fraudulent overcharges, fees, etc.; and the protection of consumer info resulting in actual loss to consumers. While listing what will take enforce- ment precedence moving forward, the Bureau announced that it will deprioritize the following: • Loans for "justice-involved" individ- uals (criminals) • Medical debt • Peer-to-peer platforms and lending • Student loans • Remittances • Consumer data • Digital payments In shifting its supervisory efforts back to depository institutions, Paoletta noted that in 2012, 70% of the CFPB's supervi- sion focused on banks and depository institutions, and 30% on nonbanks. In his memo, he noted that those figures have reversed course, as more than 60% of CFPB's supervision is focused on non- banks and less than 40% on banks and depository institutions. The attorney who spoke anonymous- ly to The Guardian about the CFPB's shift in direction added, "To some extent, I think it's a show to say they're doing something. All it does is create confu- sion. They think they are being super business-friendly, but everything they've done so far is actually not at all helpful to most of the businesses we regulate. We're not doing enforcement, and we're not doing any examination against some of the worst of the worst. We want to stop the harm before it happens because that's better for everyone. The kinds of ques- tions that get asked, it's clear they don't know what we do, and they don't care." FED TO ADOPT NEW FRAMEWORK TO SETTING MONETARY POLICY T he Federal Reserve Board hosted the Second Thomas Laubach Research Conference in May, a key component of the Federal Reserve's review of its monetary policy strategy, tools, and communication. Opening Remarks were presented by Jerome H. Powell, Chair, Board of Gover- nors of the Federal Reserve System, who discussed how the Federal Open Market Committee (FOMC) will begin to analyze its framework and the methods it uses to set interest rate policy and communicate it to the public, marking the first time the Fed will do so since 2020. "We will reconsider aspects of our strategic framework in light of the expe- rience of the last five years," said Powell in his opening remarks. "We will also consider possible enhancements to the Committee's [FOMC] policy communica- tion tools regarding forecast uncertainty." The Fed will closely examine the lessons of the 2021 inflation surge and the path that global interests took after this surge in crafting its new framework. "We provide our monetary policy framework in a document entitled the Statement on Longer-Run Goals and Monetary Policy Strategy, which we refer to as the consensus statement, the language in the opening paragraph, which has never changed, articulates our commitment to fulfilling our Congressio- nal mandate and explains clearly what we're doing and why that clarity reduces uncertainty, improves the effectiveness of our policy and enhances transparency and accountability," Powell explained. The Fed's current monetary policy framework was crafted in an environ- ment of low inflation and interest rates bordering the zero percent range. Under these conditions, the Fed keyed in more on the risk of being unable to stimulate