Acting consumer bureau leader asks Congress to limit its power

Acting consumer bureau leader asks Congress to limit its power
© Greg Nash

The acting director of the Consumer Financial Protection Bureau (CFPB) on Monday asked Congress to restrain the power of his agency.

Trump budget director Mick MulvaneyJohn (Mick) Michael MulvaneyPoll: Cruz up 9 in Texas Senate race Financial policymakers must be suffering from amnesia On The Money: Broad coalition unites against Trump tariffs | Senate confirms new IRS chief | Median household income rose for third straight year in 2017 | Jamie Dimon's brief battle with Trump MORE, who is pulling double duty as the acting CFPB chief, asked Congress to take control of the bureau’s funding, make his successors fireable at will by the president, install an inspector general and give itself the sole power to finalize the bureau’s rules.

All four measures would be drastic blows to the CFPB’s power and independence.

They are in line with the views that Mulvaney had as a member of Congress. In fact, Mulvaney voted for the changes as a Republican lawmaker from South Carolina in 2017.

Mulvaney wrote in the CFPB’s semiannual report that “Congress established an agency primed to ignore due process and abandon the rule of law in favor of bureaucratic fiat and administrative absolutism.”

“The Bureau is far too powerful, and with precious little oversight of its activities,” wrote Mulvaney, who as a congressman had opposed the CFPB’s existence.

Mulvaney’s four suggestions have been the longstanding goals of Republicans and the financial sector who’ve tried for years to rein in the CFPB. Established in 2013 under the Dodd-Frank Act, the bureau was created to be an aggressive, independent watchdog to weed out predatory lending and other fraudulent activity.

Dodd-Frank’s authors sheltered the CFPB within the Federal Reserve system, through which the bureau is funded, giving lawmakers no power over how much money the agency receives.

The CFPB, under former Director Richard CordrayRichard Adams CordrayNew polling shows Brown, DeWine with leads in Ohio Wealthiest Republican supporter in Ohio quits party Obama blasts GOP: They ‘put up with crazy’ MORE, used its power and independence to issue a slew of rules intended to prevent discriminatory lending and protect consumers from dangerous financial products. While Democrats and financial sector critics cheered on Cordray, Republicans and the subjects of CFPB oversight complained that the bureau was abusing its authority and hindering U.S. businesses.

Mulvaney, appointed in November after Cordray resigned to run for Ohio governor, has promised to restrain the bureau’s actions. He pledged to fulfill the CFPB’s obligations under Dodd-Frank, but has begun the process of unwinding much of Cordray’s regulatory legacy.

Mulvaney has delayed the first deadline of a rule on short-term, high-interest loans, sometimes called payday loans, set to go into effect this year while the bureau revises the rule. There are resolutions in both houses of Congress to repeal the rule, though it’s unclear if they’ll see floor action.

The acting director has also ended several lawsuits initiated by Cordray and has asked for critiques on close to every aspect of the CFPB’s regulatory and enforcement practices.

Mulvaney has received praise from GOP lawmakers for restraining the bureau, while Democrats have denounced him as a squatter and a Wall Street puppet. He wrote in Monday’s report that the stark partisan divide in opinion about the bureau’s directors, past and present, is proof of the need to reform the agency.

“I have no doubt that many Members of Congress disagree with my actions as the Acting Director of the Bureau, just as many Members disagreed with the actions of my predecessor,” Mulvaney wrote. “Such continued frustration with the Bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred. This cycle will repeat ad infinitum unless Congress acts to make it accountable to the American people.”

Mulvaney will testify before the House Financial Services Committee on April 11 and the Senate Banking Committee on April 12.