Mick Mulvaney, the director of the Office and Management and Budget, who is also moonlighting as a financial regulator, has literally decided to demote the “Consumer” in the Consumer Financial Protection Bureau. In public communications he now calls it the Bureau of Consumer Financial Protection, formalizing it in the new cookie-cutter seal. And failing to put consumers first has been a trend for Mulvaney.
The Associated Press reported this week that the CFPB, or BCFP (actually, there’s no way I’m calling it that), has not recorded one enforcement action in the 135 days since Mulvaney took over last November. As Sherrod Brown, ranking Democrat on the Senate Banking Committee, said in Mulvaney’s semi-annual report to Congress Thursday, the number of enforcement actions on his watch are actually negative four, because the agency “has withdrawn lawsuits against four payday lenders that charge consumers triple-digit interest rates.”
Under previous director Richard Cordray, the CFPB would send reporters a press release practically every week announcing some enforcement action against a bank or credit-card company or debt collector. It returned $12 billion to consumers who were wronged in their financial transactions. Today, Mulvaney has frosted the glass of his office windows so nobody can see that he’s doing nothing inside.
In testimony to Congress this week, Mulvaney absurdly tried to take credit for returning $92 million to consumers, even though this involved only cases that existed before he got there. He also tried to claim that Cordray didn’t start any enforcement actions in his first six months as director, which is a flat-out lie.
What we have here is repeal by neglect. It matters little that CFPB has regulations on the books if they’re not enforced. Mulvaney is surely working to remove those regulations—starting with rules just finalized on payday lenders—but that takes time. Chilling enforcement can happen right away, and it has. There are suddenly rumors that Mulvaney will issue a “record fine” for Wells Fargo’s crime spree against mortgage and auto-insurance holders, but that’s all they are at this point—-rumors that appear cynically timed to blunt this growing abandonment of people ripped off by their lenders. “Regulation by enforcement is done, we’re not doing it anymore,” Mulvaney said, going to bat for banks who apparently should be held innocent if they break the law but pretend not to know about it after the fact.