November 27, 2018
By Yana Miles
A year ago today, the Trump Administration’s budget chief Mick Mulvaney took over as head of the Consumer Financial Protection Bureau (CFPB) and launched a campaign of sabotage against the agency’s mission and work. Mulvaney’s tenure provides ample reason for the Senate to reject Kathy Kraninger’s nomination for permanent Director of the CFPB. The Senate is expected to vote on her nomination as soon as tomorrow.
Ms. Kraninger currently works as an aide at the Office of Management and Budget, where Mick Mulvaney is the Director (in addition to leading the CFPB).
During her nomination process, Kraninger indicated that, if confirmed for CFPB Director, she would follow in Mulvaney’s footsteps. When asked about his actions at the CFPB, Kraninger stated, “I cannot identify any actions that [CFPB] Acting Director Mulvaney has taken with which I disagree.” This response should disqualify her for consideration.
Over the past year of leading the consumer bureau, Mick Mulvaney has taken numerous actions that harm consumers and facilitate predatory financial behavior.
He directed CFPB examiners to stop checking if companies are violating a law that forbids lenders from overcharging military servicemembers and their dependents.
Mulvaney’s CFPB has teamed up in court with the payday lenders in seeking an indefinite delay to the CFPB payday rule. The agency is also rewriting the rule in order to defang it. A delay or gutting of the rule would allow payday and car-title lenders to continue regularly trapping borrowers in debt.
Under Mulvaney, the CFPB has dramatically reduced enforcement efforts. The agency has pulled back on its probe of Equifax’s massive data breach and dropped its investigation of predatory lender World Acceptance Corporation. Mulvaney directly intervened to drop a case against online loan shark Golden Valley, which deceived borrowers and charged interest rates up to 950%.
For these rare enforcement actions, Mulvaney’s team has repeatedly reduced both fines against companies that broke the law and restitution for the consumers who were harmed. The CFPB slashed its penalty for abusive debt collector National Credit Adjusters — while providing nothing in relief for affected consumers. Hydra Lenders, which was accused of running a $227 million scheme, settled with the CFPB for a civil fine of a single dollar.
Mulvaney’s team allowed Wells Fargo to set its own terms for restitution of mortgage and auto loan customers Wells had admitted to overcharging, including thousands of customers whose vehicles were repossessed as a result. People who were hurt by the company face sizable hurdles and delaysin receiving what will likely be incomplete compensation.
When Richard Cordray served as the CFPB’s first Director, the consumer bureau won record setting court settlements against companies that engaged in unlawful discrimination in the housing, auto loan, and credit card markets.
By contrast under Mulvaney, the agency has not taken any enforcement actions against discriminatory lending practices. Mulvaney has asked CFPB staff to make it harder to prove discrimination against people of color and women. He also called for taking supervisory and enforcement powers away from the CFPB’s fair lending office.
Similarly, Mulvaney moved to shut down the CFPB Office for Students and Young Consumers — even as our nation faces a student loan debt crisis,.
A few months ago, the agency’s Student Loan Ombudsman resigned after the CFPB’s new political leadership “turned its back” on borrowers and even blocked the release of a report showing that “some of the nation’s largest banks were ‘saddling [students] with legally dubious account fees.’”
The Consumer Financial Protection Bureau was established in the wake of the Great Recession. Millions of Americans had lost their homes, jobs, and much of their life savings, largely because of financial companies’ reckless and abusive practices.
It was abundantly clear then and now: American consumers need an independent government watchdog that will be in their corner.
Yana Miles is Senior Legislative Counsel at the Center for Responsible Lending (CRL)