Mick Mulvaney hasn’t imposed any fines or penalties as acting director of the CFPB. Not one.
During that time, according to the Associated Press’s Ken Sweet, he has not taken a single enforcement action against any bank, lender, credit card company, or any other entity within his purview. Nothing.
Mulvaney, the Office of Management and Budget director who took over as interim CFPB director in November after Richard Cordray stepped down, has made no secret of his distaste for the agency he temporarily runs.
Mulvaney, who once described the CFPB as a “sick, sad” joke, has sought to rein in the agency and overhaul its mission. Since taking over, he has reportedly scaled back an investigation into the Equifax data breach, relaxed restrictions on often predatory payday lenders, and recommended Congress pursue sweeping changes to the CFPB’s powers.
The AP report points out another area where Mulvaney is taking a hatchet to the CFPB — or, rather, sitting on his hands: The agency under Mulvaney has not pursued a single enforcement action since he took over. It has imposed no fines or penalties, required no fixes or redress, and filed no lawsuits against bad actors.
Per the AP:
A review of a CFPB database obtained by the AP through a Freedom of Information request shows that the bureau issued an average of two to four enforcement actions a month under former Director Richard Cordray, President Obama’s appointee. But the database shows zero enforcement actions have been taken since Nov. 21, 2017, three days before Cordray resigned.
Either every member of the consumer finance industry became a model citizen overnight when Mulvaney took over in November or the former South Carolina Congress member is looking the other way.
“In a very few number of days, the acting director has done a great deal of damage,” Aaron Klein, a fellow in economic studies at the Brookings Institution and former Treasury Department aide, recently told me. “What seems to be happening at the CFPB is kind of a reflexive, anti-whatever the last guy did approach.”
The CFPB was created in 2011 under the Dodd-Frank financial reform. Its first director, Cordray, was confirmed in 2013. Under his watch, by the CFPB’s tally, the agency handled more than 1.2 million consumer complaints and brought about nearly $12 billion in relief for harmed consumers. Per the AP, the bureau estimates that about one in 10 Americans has received some sort of reimbursement or relief thanks to its enforcement work.
A separate report says a blockbuster fine for Wells Fargo could be on the horizon
The AP notes that bureau watchers on both sides think enforcement action hasn’t stopped entirely, and supervision and investigations are still happening. The CFPB in a statement to the outlet blamed the slowdown on a new administration taking over. “Assessing the legal risks of all pending enforcement actions is a critical part of the transition process and standard procedure for new leadership at enforcement agencies such as the Bureau,” the statement said. “That review continues alongside the agency’s ongoing law enforcement work.”
One potential action Mulvaney might be eyeing is one against Wells Fargo. Reuters reported on Monday that the bureau is seeking a record fine against the megabank that could be as much as $1 billion for abuses in auto insurance and mortgage lending. Such a penalty would dwarf the $100 million fine the CFPB hit Wells Fargo with in September 2016 for issuing millions of fake credit card accounts.
After Reuters reported in December that the CFPB might be slowing its investigation into Wells Fargo’s mortgage lending abuse, President Donald Trump hit back on Twitter, calling for fines and penalties to be “pursued and, if anything, substantially increased.”
Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!
— Donald J. Trump (@realDonaldTrump) December 8, 2017
Ian Katz, an analyst at the Washington research firm Capital Alpha Partners, told me in an interview earlier this year that such high-profile actions might wind up being the Trump administration’s preferred method for financial regulations and enforcement. “I do think that Trump appreciates the good publicity … that comes with perp walks and charging big names with crimes,” he said.
Mulvaney told reporters at a banking conference on Monday that he is likely to remain at the helm of the CFPB through the end of the year. “I tell folks that the way the Senate is working we’re just sort of assuming that I’ll be there for the rest of this calendar year — that’s just how we’ve planned,” he said. “It could be dramatically longer than that; it could be shorter than that.”
via Vox http://bit.ly/2FF4XI0
April 10, 2018 at 07:46AM