Finance

Mulvaney urges Congress to strip agency’s powers

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The acting director of the Consumer Financial Protection Bureau (CFPB) asked a House committee Wednesday to rein in the agency’s power to police the financial sector.

Mick Mulvaney, who is also the White House budget director, urged the House Financial Services Committee to impose several new restrictions on the bureau. He said lawmakers need to take control of the agency’s funding, make his successors fireable at will by the president and install an inspector general, among other things.

{mosads}”It’s not accountable to you. It’s not accountable to the public. It’s not accountable to anybody but itself,” Mulvaney said of the CFPB, telling lawmakers to “take back authority as the legislature of the country.”

Republicans showered praise on Mulvaney’s efforts to pull back the CFPB, an agency they’ve long accused of violating the law and abusing its powers to wage a crusade against financial institutions. 

“It is sheer irony and great comic relief to see the wailing and gnashing of teeth of many of my Democratic colleagues who now denounce the unaccountable nature of the CFPB, but only because now a Republican is in control,” said House Financial Services Committee Chairman Jeb Hensarling (R-Texas). 

“I ask, ‘Where have you been?’ ”

Democrats who long resisted GOP efforts to change the CFPB ripped Mulvaney for his efforts to ease off its historically aggressive enforcement. Some of them even refused to recognize him as the bureau’s acting chief.

“Mr. Mulvaney is not the acting director of the Consumer Financial Protection Bureau,” said Rep. Maxine Waters (Calif.), the committee’s ranking Democrat. “He was illegally appointed by President Trump.”

Even so, Waters said that Democrats needed to press Mulvaney on the “impactful and indeed harmful decisions” he has made in his nearly five months leading the agency.

Trump appointed Mulvaney as acting CFPB chief in November following the resignation of Richard Cordray (D), the bureau’s first director. Cordray had sought to choose his temporary heir by elevating Leandra English, then his chief of staff, to the deputy director position. 

A federal judge ruled in November that Trump’s appointment of Mulvaney superseded English’s claim to the job as the CFPB’s deputy chief. That decision gave Mulvaney free reign to transform the agency he had once sought to eliminate as a member of Congress.

Mulvaney’s major actions include delaying a controversial rule on short-term, high-interest loans, restructuring the bureau’s office for policing lending discrimination and starting a sweeping review of the CFPB’s operations. The goal, he said, is to end what he considers the bureau’s overzealous and harmful history of aggressive fines and lawsuits.

“Regulation by enforcement is done,” Mulvaney said. “Financial services providers should be allowed to know what the law is before being accused of breaking it.” 

Republicans on the panel joined Mulvaney, a former member of the committee, in denouncing the CFPB’s broad power and independence. 

“You are thankfully both a terrible bureaucrat but a great leader,” said Rep. Blaine Luetkemeyer (R-Mo.).

Mulvaney stressed his commitment to doing nothing beyond enforcing consumer protection laws and fulfilling his obligations as CFPB director. He denied Democratic charges that he is seeking to destroy the bureau from within. He cited as proof his continuation of the 25 lawsuits Cordray filed against lenders accused of fraud or abuse and the more than 100 investigations being conducted by the bureau. 

Other Democrats pressed Mulvaney for signs that he’s abused his position to benefit special interests or crossed ethical lines meant to separate his work at the CFPB and as Trump’s budget director.

“We’re still going after bad actors,” Mulvaney said. “We’re doing it differently than other folks might do it, because elections have consequences.”

Democrats said the fact that Mulvaney had not initiated any of his own actions against banks was proof of his unfitness for the job.

“The clear implication is that the people who were enforcing before are not enforcing anymore,” said Rep. Stephen Lynch (D-Mass.). “What the heck are they doing now?”

Mulvaney will appear before the Senate Banking Committee on Thursday. Sen. Elizabeth Warren (D-Mass.), the architect of the CFPB who has emerged as the most vocal critic of Mulvaney, will have a chance to question Mulvaney at the hearing.

Tags Blaine Luetkemeyer Consumer Financial Protection Bureau Donald Trump Elizabeth Warren Elizabeth Warren Jeb Hensarling Leandra English Maxine Waters Mick Mulvaney Mick Mulvaney Richard Cordray Richard Cordray Stephen Lynch
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