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By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The Consumer Financial Protection Bureau (CFPB) did not cover itself in glory even before the hostile Trump became President and started actively opposing its efforts. In fact, under its first director, Richard Cordray, the bureau fumbled its biggest opportunity, its attempt to ban pre-dispute mandatory arbitration agreements. After withering and dithering, in 2017 the CFPB adopted the Arbitration Agreements Rule “[banning] companies from using mandatory arbitration clauses to deny groups of people their day in court.”
Alas, the agency’s delay in promulgating the rule until well into the Trump administration meant it was soon overturned under the provisions of the Congressional Review Act (CRA), as I wrote in RIP, Mandatry Arbitration Ban:
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On January 12, 2021, the Department of Justice (the “DOJ”) settled its first civil action for alleged fraud against the Paycheck Protection Program (the “PPP”) – the primary lending program under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act for small businesses negatively impacted by the COVID-19 pandemic. Prosecutors in the Eastern District of California brought civil claims under the False Claims Act (the “FCA”) and the Financial Institution Reform, Recovery, and Enforcement Act (“FIRREA”) against a company and its CEO, alleging that they falsely claimed that the company was not in bankruptcy in order to qualify for a PPP loan. The FCA creates civil liability for a person who knowingly (including recklessly or with deliberate ignorance) defrauds a federally funded program by submitting false claims for money.[1] FIRREA allows the government to impose civil penalties for violation