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The CFPB isn’t getting any love from the DOJ in lawsuit with PHH

(NEWS) The CFPB is getting sued and the DOJ has decided they won’t be helping the consumer watchdog agency win.

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CFPB vs DOJ

The Department of Justice (DOJ) on Friday filed their long awaited brief in the Consumer Finance Protection Bureau (CFPB) vs PHH Corporation case. The motion pits the DOJ against the consumer watchdog agency.

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What beef could the DOJ possible have with an agency dedicated to protecting consumers? The debate all comes down to the CFPB’s unique structure, which the DOJ argues is unconstitutional.

Sovereign or nah?

“The Department of Justice argues that an independent agency with one sole individual at its head who can only be removed for cause is unconstitutional—and the exception permitted by the Supreme Court for independent agencies with a commission form of governance should not be extended to agencies with only one agency head,” explains Joseph Lynyak III, a partner at Dorsey & Whitney International Law Firm and one of the nation’s leading experts when it comes to the CFPB.

Essentially, the DOJ is arguing against the CFPB’s sovereignty.

According to the DOJ, the executive branch can’t effectively check the CFPB’s powers due to a “for cause” removal provision. This provision, only allows the CFPB’s director to be removed for “inefficiency, neglect of duty or malfeasance of office.”

The “for cause” clause

This “for cause” provision has been a major source of contention for the CFPB.

Last October, the the U.S. Court of Appeals for the Washington, D.C. Circuit struck down the clause.

With Friday’s motion, the DOJ has sided with the appeals court in favor of removing the clause and allowing the president to remove the CFPB’s director at will.

The real remedy

CFPB supporters may see this as a major blow to the agency. Others see striking down the “for cause” provision as a shortsighted, limited solution.

In fact, PHH, the mortgage lender that started it all by challenging the CFPB’s constitutionality wants the agency completely dissolved.

However, history shows that the courts are not willing to go down that route. “Unlike the legal position taken by PHH (which strongly argues that nothing can correct the constitutional defects inherent in the structure of the CFPB), the Department of Justice argues in its brief that the remedy adopted by the three-judge panel (i.e., striking the “for cause” provision and allowing the president to fire the Director of the CFPB without cause) is correct.

Importantly, this remedy was the focal point of a Supreme Court case written by the Chief Justice in 2010,” Lynyak points out. Lynyak is referring to 2010’s Free Enterprise Fund v. Public Company Accounting Oversight Board ruling. In that case, the court also struck down the “for cause” provision.

Constitutionality

“In addition, while the DOJ concedes that the PHH case could be decided without addressing the constitutional issues, it correctly indicates that at some point in the immediate future the constitutionality of the CFPB will have to be addressed,” adds Lynyak.

This may eventually leave the CFPB’s future in the hands of the nation’s highest court.

“Whether the determination is made in this case or another case, eventually an inferior court will issue a decision adverse to the CFPB that will force the U.S. Supreme Court to take up the case,” Lynyak tells Bloomberg Law.

It could go all the way

It’s hard to predict whether this case will go all the way to U.S. Supreme Court.

What we do know is that the court’s ruling could have a major effect on any business offering financial services.

A rehearing is scheduled for May 24. If the court upholds their decision to get rid of the “for cause” provision, President Trump can dismiss the CFPB’s current director, Richard Cordray. Trump could then replace Cordray with a director he deems more business friendly.

Consistent in its inconsistency

Regardless of who takes the director role, the financial services industry should be open to both the pros and cons of allowing the CFPB’s director to be replaced at will by the president.

A business friendly director appointed by one president, can just as easily be replaced by the next administration.Click To Tweet

The cost of an inconsistent CFPB can’t be overlooked in the push to reform the troubled agency.

#CFPB

Staff Writer, Arra Dacquel is a San Francisco based writer. She has a bachelor’s degree in political science from UC Davis and is currently studying web development. She’s obsessed with tech news and corgis, but not in that order.

Business News

Everyone should have an interview escape plan

(BUSINESS NEWS) A job interview should be a place to ask about qualifications but it seems more people are asked about their personal life. How do you escape this problem?

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interview from hell

“So, why did you move from Utah to Austin?” the interviewer asked over the phone.

The question felt a little out of place in the job interview, but I gave my standard answer about wanting a fresh scene. I’d just graduated college and was looking to break into the Austin market. But the interviewer wasn’t done.

“But why Austin?” he insisted, “There can’t be that many Mormons here.”

My stomach curled. This was a job interview – I’d expected to discuss my qualifications for the position and express my interest in the company. Instead, I began to answer more and more invasive questions about my personal life and religion. The whole ordeal left me very uncomfortable, but because I was young and desperate, I put up with it. In fact, I even went back for a second interview!

At the time, I thought I had to put up with that sort of treatment. Only recently have I realized that the interview was extremely unprofessional and it wasn’t something I should have felt obligated to endure.

And I’m not the only one with a bad interview story. Slate ran an article sharing others’ terrible experiences, which ranged from having their purse inspected to being trapped in a 45 minute presentation! No doubt, this is just the tip of the iceberg when it comes to mistreatment by potential employers.

So, why do we put up with it?

Well, sometimes people just don’t know better. Maybe, like I was, they’re young or inexperienced. In these cases, these sorts of situations seem like they could just be the norm. There’s also the obvious power dynamic: you might need a job, but the potential employers probably don’t need you.

While there might be times you have to grit your teeth and bear it, it’s also worth remembering that a bad interview scenario often means bad working conditions later on down the line. After all, if your employers don’t respect you during the interview stage, it’s likely the disrespect will continue when you’re hired.

Once you’ve identified an interview is bad news, though, how do you walk out? Politely. As tempting as it is to make a scene, you probably don’t want to go burning bridges. Instead, excuse yourself by thanking your interviewers, wishing them well and asserting that you have realized the business wouldn’t be a good fit.

Your time, as well as your comfort, are important! If your gut is telling you something is wrong, it probably is. It isn’t easy, but if a job interview is crossing the line, you’re well within your rights to leave. Better to cut your losses early.

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Business News

Walmart delays the launch of its Amazon Prime competing service

(BUSINESS NEWS) Walmart+ is being delayed once again, but the service has yet to be cancelled. Will it be another flop?

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Walmart+, the supposed Amazon Prime alternative of the century, has been delayed from launching until further notice. This marks the second delay of the year.

Vox reports that the Amazon Prime competitor was initially supposed to launch in the first quarter of 2020, but Walmart pushed the release back to July due to Coronavirus concerns. Now, Walmart+ doesn’t have a definitive launch date–indecision that’s easy to chalk up to both the ongoing pandemic and trepidation regarding profitability in an Amazon-dominated world.

Amazon Prime, a service which runs customers $119 per year, has well over 100 million members in the United States; that works out to at least one member in a little over 80 percent of households here. Between its ubiquitous nature and the fact that Amazon Prime members are more inclined to use Amazon frequently than non-Prime members, it isn’t hard to see why a premium Walmart subscription seems a little redundant.

But Walmart doesn’t see it that way. “Walmart executives have hoped the program would strike a balance of being valuable enough that customers will pay for it, while boasting different enough perks from Amazon Prime so that there aren’t perk-by-perk comparisons,” Vox posits. At $98 per year, Walmart+ would include things like same-day delivery, gas discounts, line-skipping, a dedicated credit card, and potentially even a video streaming service.

While there are some clear parallels between Amazon Prime and Walmart+, one can attribute those to convenience rather than imitation. People seem to enjoy having extra streaming options as a perk of Prime, so for Walmart+ to include something similar wouldn’t exactly be inappropriate.

The largest obstacle to Walmart+’s success in a post-Coronavirus world probably won’t have much to do with brand loyalty, but the fact remains that Amazon’s value is so far above and beyond Walmart’s that people who regularly use Amazon Prime aren’t likely to make the switch–and, as mentioned previously, the sheer number of people who have a Prime membership is high enough to be concerning to Walmart executives.

However, for customers who frequently shop at Walmart or live in relatively rural areas, Walmart+ doesn’t seem like a bad gig. It isn’t Amazon Prime, to be sure–but that’s the point.

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Business News

What COVID-19 measures do workplaces have to take to reopen?

(BUSINESS NEWS) Employers can’t usually do medical screenings – but it’s a little different during a pandemic.

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COVID-19 temp gun

Employers bringing personnel back to work are faced with the challenge of protecting their workforce from COVID-19. The Center for Disease Control (CDC) and the Equal Employment Opportunity Commission (EEOC) have issued guidelines on how to do so safely and legally.

Employee health and examinations are usually a matter of personal privacy by design through the American’s with Disabilities Act. However, after the World Health Organization declaration of the coronavirus as a pandemic in March, the U.S. EEOC revised its guidance to allow employers to screen for possible infections in order to protect employees.

Employers are now allowed to conduct temperature screenings and check for symptoms of the coronavirus. They can also exclude from the workplace those they suspect of having symptoms. The recommendations from the CDC also include mandatory masks, distant desks, and closing common areas. As the pandemic and US response evolves, it is important for employers to continue to monitor any changes in guidance from these agencies.

Employers are encouraged to have consistent thresholds for symptoms and temperature requirements and communicate those with transparency. Though guidance suggests that COVID-19 screenings at work are allowed by law, employers should be mindful of the way they are conducted and the impact it may have on employer-employee relations.

Stanford Health Care is taking a bold approach by performing COVID-19 testing on each of its 14,000 employees that have any patient contact. They implemented temperature scanning stations at each entrance, operated by nurses and clinicians. The President and CEO of Sanford Health Care said, “For our patients to trust the clinical procedures and trials, it was important for them to know that we were safe.”

Technology is adapting to meet the needs of employers and identify symptoms of COVID-19. Contactless thermometers that can check the temperature of up to 1,500 people per hour using thermal imaging technology are now on the market; they show an error margin of less than one-tenth of a degree Fahrenheit. COVID-19 screening is being integrated into some company time-clocks used by employees at the start and end of each shift. The clocks are being equipped with a way to record employee temperatures and answers to a health questionnaire. Apple and Google even collaborated to bring contact tracing to smart phones which could help contain potential outbreaks.

Fever, coughing, and difficulty breathing are the three most common symptoms of COVID-19. Transmission is still possible from a person who is asymptomatic, but taking the precautions to identify these symptoms can help minimize workplace spread. This guidance may change in the future as the pandemic evolves, but for now, temperature checks are a part of back to work for many.

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