Why You Can't Redefine What the CFPB Does and Who Its Focused on Protecting

Late last month, the Acting Director of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney, published an op-ed in the Wall Street Journal, in which he marked that the days of aggressively “pushing the envelope” at the Bureau were over. Given the Acting Director’s history of attacks and comments against the CFPB he’s now responsible for leading, much of his words didn’t come as a surprise. That said, in reading the op-ed there were a few notable sentences on the third paragraph that caught my attention (emphasis mine): 

"That entire governing philosophy of pushing the envelope frightens me a little. We are government employees, and we work for the people. That means everyone: those who use credit cards and those who provide the credit; those who take out loans and those who make them; those who buy cars and those who sell them. All of those people are part of what makes this country great, and all of them deserve to be treated fairly by their government. There is a reason Lady Justice wears a blindfold and carries a balance scale along with her sword." 

Given that part of the Bureau’s mission is to ensure that financial markets work not only for consumers but also for financial providers and our overall economy, the argument that the Acting Director elevated in his op-ed seemed, at least on the on the surface, like a rational one to make. Unfortunately, his actions before and after this op-ed have shown where his true focus has been and continues to be since assuming leadership of the Consumer Bureau. That is, actively tipping the scales in favor of predatory financial providers at the expense of everyday consumers. 

For example, shortly after he was controversially tapped by the President to lead the agency—while also leading the Office of Management and Budget—he moved to implement a 30-day freeze on data collection, regulatory and enforcement actions. In addition, he also directed his staff to examine active investigations and litigation matters before the agency. While presumably some of these activities have resumed since the freeze was implemented, it should be noted that over the past several months the Bureau has moved to drop an investigation against a company challenging the agency’s authority to issue Civil Investigate Demands (a tool the agency has used to investigate “unfair, abusive and deceptive” financial practices) as well as a lawsuit against a group of payday lenders accused of skirting usury laws in several states in order to provide loans with interest rates that ranged between 400-950% APR.  

Beyond these instances, the CFPB has also moved redefine the way it does its work, by both inviting the public to submit public comments on the agency’s various functions as well as by revisiting its approach to rule-making. While the former is about remaking the agency’s future work, the latter is about reshaping the work the agency has already done. So far, those efforts have led the Bureau to delay the implementation of rules to provide prepaid card users with commonsense protections against fraud and excessive fees, which were finalized in 2016 and were set to be effective this April. It’s also led the agency to announce its intention to revisit rules designed to ensure that markets are fair in their treatment of consumers, such as the long-finalized mortgage disclosure rules that were established in the wake of housing crash, as well as rules designed to ensure that financial providers are not intentionally providing predatory products to consumers, such as the recently finalized rules against predatory payday lending

Unfortunately, these changes come against the backdrop of the Acting Director’s recent decline of any additional funding for the agency during its current second quarter of Fiscal Year 2018, as well as recent efforts to reorganize and restrict the abilities of its own Office of Fair Lending and Equal Opportunity. Prior to the reorganization, the Bureau’s Office of Fair Lending and Equal Opportunity had returned more than $450 million dollars back into the pockets of about a million consumers who had fallen victim to fair lending abuses. 

Now, if all of this wasn’t enough to convince you of who the Bureau, under the leadership of Acting Director Mulvaney, was now working for then maybe the reports from earlier this week that the agency is putting a stop to its investigation into the Equifax data breach will. Given that the data breach exposed some of the most sensitive information of more than 140 Americans—including social security and driver’s license numbers—it makes no sense that an agency tasked with protecting consumers would look the other way at a time when nearly half the country needs them to do what they were created to do. Unless, of course, the Acting Director was not completely forthcoming in his op-ed of who the agency is now focused on protecting. While we hope this isn’t the case, Prosperity Now joins the growing chorus of advocates and lawmakers calling on the Acting Director to remain steadfast in upholding the established history of the Bureau to vigorously, independently and effectively protect consumers against unfair and predatory practices. 

Ultimately, while the unraveling of the Bureau is likely to get worse over the next year, we should continue to keep in mind that the Acting Director’s tenure is, by definition, limited. Eventually the Trump Administration will have to nominate a permanent Director to a five-year term and that person will have to be confirmed by the Senate by a 60-vote margin, giving advocates an opportunity to tell their Senators only to vote for a nominee that promises to truly look out for the interest of consumers.