CFPB whistleblower pretty much accuses the agency of fraud

So who is in charge of the Consumer Financial Protection Bureau (CFPB) these days? At least according to one judge, it’s Mick Mulvaney. But the former leader, Obama appointee Richard Cordray, is going to have some questions to answer, likely in front of a Senate investigative panel. The Washington Free Beacon reports that one former examiner for the CFPB has come forward claiming whistleblower status and charged the agency with falsifying documents in their efforts to punish payday lenders.

A former employee of the Consumer Financial Protection Bureau is calling for an investigation after accusing managers of falsifying documents to impose fines on a payday lender.

Cassandra Jackson, a former CFPB examiner in the southeast division, sent a letter last week to Attorney General Jeff Sessions also accusing managers of “widespread racism and gender discrimination.”

Jackson said her superiors at the CFPB asked her to falsify documents during her investigation into a Texas-based payday lending company, Ace Cash Express.

“During the course of this examination, I was asked to change, remove, and otherwise falsify documents connected with this examination,” Jackson said.

This is an extremely serious charge and Jackson claims to have the documents to back it up. When building a case against Ace Cash Express, she’s saying that she was directly ordered by superiors to remove documentation showing that the company was in compliance with the law and write a fraudulent report indicating that they were not. She further claims that after refusing to comply with the order, her managers went on to falsify the report themselves, resulting in ten million dollars in fines and fees for Ace Cash Express. She also claims to have faced retaliatory action from her supervisors after refusing to cooperate.

If this is true, we’re not talking about “inappropriate” behavior on the part of the CFPB calling for a slap on the wrist. That’s flat-out fraudulent prosecution and should result in somebody going to jail. Of course, one instance doesn’t make for a vast, far-reaching conspiracy, but attacking payday lenders was really a hallmark of the bureau under the Obama administration. If Jackson stepping forward leads to a different sort of #MeToo moment among other current and former workers inside the CFPB this snowball could turn into an avalanche.

Just for the record, as I’ve stated here before, I’m no fan of these payday lending companies. I find the business model most of them operate under to be dubious at best and it promotes a system where low-income workers can be trapped in an endless cycle of debt, chasing the dragon like someone who borrows money from a loan shark. But the harsh reality is that most of these businesses operate legally within the boundaries of the law and are entitled to try to make a go of their businesses. And while it sounds even more harsh to say, their victims bear some burden of personal responsibility for not looking more carefully into the terms of the loan.

In the end, however, this has never been a question of the moral rectitude of the payday lenders, but that of the CFPB. If they were enforcing the law then they will remain in the clear. But if they were cooking the books to go after the perceived enemies (or at least targets) of the Obama administration, then someone will have to stand before the wheel.