OP-ED: Mick Mulvaney’s assault on consumer finances and the CFPB is illegal as well as wrong
It’s been over four months since President Trump named Mick Mulvaney as interim head of the Consumer Financial Protection Bureau. During that time, Mulvaney’s been working hard to derail the bureau’s efforts to protect consumers from financial predators. This highly intentional assault on American consumers and their financial well-being is not just wrong — it’s unlawful.
President Trump can nominate whoever he wants to be the permanent head of the CFPB, but until he does that and his nominee is confirmed, he doesn’t get to decide who’s running the CFPB in the interim. The law that created the CFPB makes that clear. And the stakes for consumer protections couldn’t be higher.
Over the last six years, the CFPB lent a hand to Americans facing predatory practices by Wall Street banks, payday lenders, law-breaking debt collectors, abusive mortgage firms and more. The bureau helped secure roughly $12 billion dollars in relief for over 29 million Americans, and importantly worked to secure changes in the bad practices that precipitated the Great Recession and landed families across the country in financial distress.
But in the four months since Mick Mulvaney unlawfully assumed leadership of the CFPB, he has worked to dismantle its accomplishments brick by brick and rule by rule. With Mulvaney helming the bureau, its efficiency and successful track record working on behalf of consumers are under existential threat, and American families are shouldering the burden.
Just this month, Mulvaney urged Congress to pass new laws meant to cripple the bureau and undermine its independence, including recommending that congressional approval be required for new major rules put out by the agency. His anti-CFPB assault also includes reconsidering rules that protect consumers from predatory payday lending, pulling back on lawsuits against payday lenders and backing off a probe of Equifax data breaches.
Mulvaney has announced a review of all agency policies, priorities and procedures. He plans to ask the financial services industry — the very entities and people the bureau is supposed to be keeping a watchful eye on — how it would like to be regulated. He has already asked for input on how the agency should change its use of civil investigative demands, a form of subpoena that lets the CFPB get information from suspected wrongdoers.
Mulvaney has installed anti-consumer lackeys at the bureau and even rewritten its mission statement to highlight how he intends to serve banks and other financial firms, not consumers. There’s plenty to be worried about — and reason to believe his anti-consumer blitz will continue unabated.
Just as concerning, President Trump has failed to follow through on his responsibility to nominate a new permanent director for the bureau. The D.C. Circuit Court recently confirmed in its decision in PHH v. CFPB that Congress intended for the director of the CFPB to be independent.
Yet instead of nominating someone, Trump unlawfully dropped Mulvaney into the directorship. Mulvaney could not be farther from independent: he currently serves as director of an agency located within the Executive Office of the President and thus works closely with the president on a range of issues and serves at his pleasure. One can’t help wonder if Trump believes that even the Republican-controlled Senate wouldn’t confirm someone as opposed to the CFPB’s mission of protecting consumers as Mick Mulvaney.
Given that Mulvaney is not lawfully serving as acting CFPB director, a pall of illegitimacy hangs over everything he’s doing there. On Thursday, the D.C. Circuit court will hear arguments on whether Mulvaney is the lawful director of the agency. Because the succession is written into law, the court should conclude that the bureau’s deputy director is its rightful director.
When Congress drafted the Dodd-Frank Act, which created the CFPB, it wanted to prevent exactly this scenario of the president hand-picking an acting director eager to advance the president’s policy agenda without the moderating check of Senate confirmation. And it wanted to make sure that the bureau would maintain its independence even in periods when the director position was vacant.
That’s why it made clear the deputy director should be acting director until there’s a new confirmed director. And that’s why the D.C. Circuit hearing this week is so important.
Until the president nominates someone who can be confirmed by the Senate to head the CFPB, Mick Mulvaney should not be in charge. The bureau’s deputy director should be — just as Congress intended when it wrote the Dodd-Frank law in the wake of the Great Recession.