Mulvaney shakes up consumer bureau office that polices racism in lending

Mulvaney shakes up consumer bureau office that polices racism in lending
© Greg Nash

The acting director of the Consumer Financial Protection Bureau (CFPB) has stripped an office devoted to lending discrimination of its enforcement power, according to an email released Thursday.

Acting CFPB chief Mick MulvaneyJohn (Mick) Michael MulvaneyProtect the Military Lending Act On The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Warren suggests Mulvaney broke law by speaking to GOP donors MORE told bureau staff in a Tuesday email that he would transfer the agency’s Office of Fair Lending and Equal Opportunity to a department under his purview in an effort to streamline the agency. The email was first reported by The Intercept.

Mulvaney said the fair lending office will focus on consumer education and advocacy under control of the office of the director. The bureau’s supervision, enforcement and fair lending division, a separate unit outside of the director’s office, will take over policing the lending market for racial discrimination.

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“These changes are intended to help make the Bureau more efficient, effective, and accountable, and I plan to seek both internal and external input as I continue to evaluate how we work,” Mulvaney wrote, saying he didn’t expect layoffs from the move but also could not rule them out.

The decision enraged the CFPB’s progressive backers, who supported former Director Richard CordrayRichard Adams CordraySherrod Brown says he's 'not actively considering' running for president Trump: 'Good news' that Obama is campaigning again Election Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls MORE and his aggressive actions against lenders suspected of wrongdoing.

Cordray himself panned the “CFPB squatter leadership” for “interfering” with crucial bureau work.

“We took on tough cases about redlining and other violations,” Cordray tweeted. “Some don’t like it but it is the Law of the Land.”

Mulvaney and his staff insisted the restructuring is simply a matter of streamlining the CFPB while still cracking down on racial discrimination.

“It never made sense to have two separate and duplicative supervision and enforcement functions within the same agency — one for all cases except fair lending, and the other only for fair lending cases,” senior Mulvaney adviser John Czwartacki said in a statement. “By announcing our intent to combine these efforts under one roof, we gain efficiency and consistency without sacrificing effectiveness.”

Mulvaney, who as a GOP congressman opposed the CFPB’s existence, has sought to reshape the bureau from within.

The acting director has promised to make the bureau more responsive to the needs of the financial sector, reopened rules on payday loans and prepaid debit accounts, and called for firms subject to CFPB oversight to send complaints about the bureau's investigative procedures.

Democrats and liberal political groups that fiercely defended the CFPB under Cordray argue that Mulvaney is destroying the agency and leaving vulnerable consumers without a powerful watchdog.

 

Updated on Feb. 2 at 9:21 a.m.