The FTC, on the other hand, would "look for a pattern or a practice to get redress for all consumers," he said. "The CFPB will say, 'We have 100 consumer complaints. We're going to bring a case against you for a UDAAP violation.' If you point out to them that you have 3 million consumer contacts and 100 consumer complaints are statistically irrelevant, they don't care."
"In the CFPB's mind, every single consumer matters," he said. But the cases that the CFPB has settled so far "might affect 10 to 15 percent of the marketplace," said Sachs, now a consumer finance services attorney with Paul Hastings law firm in Washington.
The CFPB will not have a long-term effect on the marketplace unless it "pushes forward with 25 to 30 more cases," Sachs said. "I see that as highly unlikely considering the bipartisan scrutiny they're receiving from Capitol Hill and [lenders'] pushback to not change as much as the CFPB would like them to."
For example, Ally Financial, which paid $98 million, including $80 million in consumer restitution funds, to settle allegations of discriminatory lending by the CFPB, did not change its policies on dealer reserve, the percentage of interest a dealership is allowed to add to an auto loan as a fee for arranging the loan. The CFPB maintains dealer reserve led to minorities with dealership-arranged Ally auto loans paying higher interest rates than other borrowers.
And a spokesman for Toyota captive finance arm Toyota Financial Services, which the CFPB is investigating for discriminatory auto lending, has said that the captive does not plan to change its lending practices.
Even though a bill that would limit the CFPB's 2013 guidance on auto lending is headed to the House floor, Sachs doesn't think the law will change under the current administration. The "CFPB will finish what they've started," he said.