The Consumer Financial Protection Bureau (CFPB) was established in 2010 by the Dodd-Frank Act to consolidate much of the responsibility for consumer protection enforcement that had before then been scattered around many federal agencies. The Act gave the CFPB a substantial amount of independence to operate without undue influence from typical political gamesmanship and unscrupulous lobby groups. From its inception until Richard Cordray exited as the agency's director, the CFPB actively investigated consumer complaints and recovered approximately $12 billion for consumers. But, since then, the agency has been a bit lax. After Cordray left, President Trump appointed Mick Mulvaney as the new director, who has publicly criticized the CFPB and advocated getting rid of it.
Under Richard Cordray's leadership, the CFPB filed several enforcement actions each month. The Bureau hasn't filed any in the more than 5 months that Mulvaney has been in charge. That's right, the person that the President placed in charge of protecting consumers has not brought a single enforcement action against anyone for violating consumer protection laws. In fact, he has dismissed an action against payday lenders.
The CFPB has always provided an open, searchable record of public complaints accusing financial services companies of violating consumer protection laws. When a consumer complaint is received, the Bureau forwards it to the company and gives them 15 days to reply. Upon receipt of a reply - or once the 15 days passes - the complaints are published online. To be fair, it also posts the company's public response, if they choose to provide one.
Mulvaney has now said he intends to put an end to that level of transparency at the Bureau. Recently, speaking to a group of banking executives and lobbyists, Mulvaney said "I don't see anything in here that says I have to run a Yelp for financial services sponsored by the federal government."
Although the law requires the CFPB to maintain the database, Mulvaney said "I don’t see anything in here that says that I have to make all of those public."
Perhaps the most obvious sign that Mulvaney lacks concern for consumer protection, he plainly told bankers and lobbyists what they could do to help curtail the CFPB's efforts to enforce consumer protection violations. According to Fortune:
“We had a hierarchy in my office in Congress,”Mulvaney, a former Republican representative for South Carolina’s 5th District, told 1,300 bankers and lending industry officials on Tuesday.
“If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you,” Mulvaney told attendees of the American Bankers Association conference in Washington.
During his congressionalcampaigns, Mulvaney received nearly $63,000 from payday lenders. In the speech Tuesday, Mulvaney encouraged the financial services industry to make campaign donations, saying he was most responsive to constituents and lobbyists who contributed to his campaign when he was a congressman.
But there is a more subtle action that Mulvaney has taken that demonstrates how he feels about consumers - he has taken to calling the "Consumer Protection Financial Bureau" (CFPB) the "Bureau of Consumer Financial Protection" (BCFP). Literally, placing Bureaucracy ahead of Consumers. The Dodd-Frank Act created it as the "Bureau of Consumer Financial Protection," so he's technically correct. From ABC News:
Mulvaney took over the bureau as acting director in late November, when Obama appointee Richard Cordray resigned. Since then, the bureau has increasingly referred to itself as the Bureau of Consumer Financial Protection, or by the acronym BCFP.
During testimony last week onCapitol Hill, Mulvaney said, "The Consumer Financial Protection Bureau does not exist."
But swapping "Bureau" from back to front is not a simple word shuffle, said Lisa Donner, executive director for the advocacy group Americans for Financial Reform.
"Doing that signals you want to take the emphasis away from serving consumers — which unfortunately is what Mulvaney's been doing in many ways — and put it on 'this is a bureaucracy'," Donner said.
New announcements from the the Bureau seem to be using the new name - including the press release on the $1 billion settlement with Wells Fargo Bank. Only time will tell if the Bureau will survive as a guardian of consumer protection... or just another big bureaucracy that bends to the will of special interest and political expediency.