Mulvaney & Schmidt: Bad for Seniors and Consumers, Great for Financial Scammers
Topeka Town Hall Featuring Kansas Attorney General and CFPB’s Acting Director Will Focus on Financial Scams Targeting Seniors, Likely Ignore Duo’s Record of Undermining Senior Protections
On Friday, June 8, 2018, Consumer Financial Protection Bureau (CFPB) “Acting Director” Mick Mulvaney and Kansas Attorney General Derek Schmidt will headline a town hall event at Washburn University’s KBI Laboratory Lecture Hall in Topeka, Kansas. The event will focus on the financial exploitation of seniors and like ignore the duo’s respective track records of working to undermine efforts to protect seniors from financial scammers.
Consumer Protection Issues for Older Americans
- Studies suggest that elder financial exploitation, which costs consumers as much as $36 billion each year, is the most common form of elder abuse. [“Recommendations and report for financial institutions on preventing and responding to elder financial exploitation,” Consumer Financial Protection Bureau, March 2016]
- The CFPB’s Office for Older Americans is dedicated to education and defending seniors against predatory scams and fraud. It was established by Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act and is statutorily charged with facilitating financial literacy for seniors. The office issues advisories to alert consumers about scams, publishes educational reports and holds events to inform seniors about the CFPB’s work. [Mary Griffin and Mauricio Videla, “The CFPB: Standing Up for Consumers in the Financial Marketplace,” Business Law Today, July 2016; Dodd-Frank: Title X – Bureau of Consumer Financial Protection, Legal Information Institute; “Consumer Financial Protection Bureau Unveils Approach to Financial Education,” Consumer Financial Protection Bureau, 07/18/13]
Mulvaney Puts Retirement Savings in Jeopardy
- The Department of Labor’s fiduciary rule, which is supported by the AARP, protects older consumers by requiring financial advisors to act in their clients’ best interests when offering guidance on retirement plans. The AARP warned that eliminating the Obama-era rule would allow bankers to advise older consumers “‘based on what’s best for their pocketbooks, not the consumers’.'” [Kenneth Terrell, “Court Should Reverse Decision That Harms Retirement Investors,” AARP, 04/26/18; AARP Letter to Jay Clayton, AARP, 09/06/17]
- While in Congress, Mulvaney undermined Americans’ savings and retirement plans by blocking and repealing the fiduciary rule. He has cast votes against the crucial rule and rallied against it in a speech to the financial industry. [Press Release, Rep. Ann Wagner, 10/27/15; Cosponsors, H.R. 1090, accessed 06/06/18, House Vote 575, H.R. 1090; House Vote 567, H.R. 2374, 10/29/13; Melanie Waddell, “Slim Chance to Stop DOL Fiduciary Rule, but Brokers Must Keep Fighting: Rep. Mulvaney,” ThinkAdvisor, 11/13/15; “R.1090, Retail Investor Protection Act,” House Republican Conference, accessed 06/06/18]
- Mulvaney has used his position as OMB Director Budget to continue to obstruct the fiduciary rule. Within weeks of being confirmed, Mulvaney delayed the effective date of the crucial rule and met with a suitor for industry opposed to the fiduciary rule. [Cheryl Bolen, “Obama Regulators Failed to Follow Law, OMB’s Mulvaney Says,” Bloomberg BNA, 04/27/17; Justin Elliott, “Koch Lobbyists and Opus Dei – Who’s Dropping in on Trump Budget Czar Mick Mulvaney?,” ProPublica, 11/21/17]
Mulvaney Has Taken Thousands from Shady Reverse Mortgage Brokers
- Reverse mortgages allow older Americans to borrow against the equity of their homes and receive incremental payments over time. Although this can help provide an income during retirement, it creates a large debt load. [Mary Griffin, “Older Americans and the CFPB,” Consumer Financial Protection Bureau, 05/25/11]
- The CFPB has warned about the risks of reverse mortgages and offered financial literacy materials to older consumers considering taking out a reverse mortgage loan. It specifically warned about the risks of delaying Social Security benefits through a reverse mortgage, which some financial professionals have increasingly promoted. [“CFPB Report Warns That Taking Out a Reverse Mortgage Loan Can Be an Expensive Way to Maximize Social Security Benefits,” Consumer Financial Protection Bureau, 08/24/17]
- The CFPB has brought enforcement actions against reverse mortgage companies for illegal deceptive advertising. In December 2016, the CFPB ordered three reverse mortgages companies to pay nearly $800,000 for illegal deceptive advertising. Through investigations, the CFPB found that the companies falsely claimed that consumers could stay in their homes for the rest of their lives. [“CFPB Takes Action Against Reverse Mortgage Companies for Deceptive Advertising,” Consumer Financial Protection Bureau, 12/07/16]
- Mulvaney has received campaign contributions for reverse mortgage brokers. He has received $5,750 from Quicken Loans, which offers reverse mortgages. [Quicken Loans 2016 Cycle, OpenSecrets, accessed 06/06/18; Quicken Loans 2014 Cycle, OpenSecrets, accessed 06/06/18; Home, One Reverse Mortgage, accessed 06/06/18]
Mulvaney and Schmidt are Threatening The CFPB’s Crucial Work to Protect Older Consumers
- Since taking over as “Acting Director,” Mulvaney has made repeated efforts to gut the CFPB. He has called the agency “a sad, sick joke” and “the very worst kind of government entity.” In his first funding request for the agency, Mick Mulvaney requested zero funding for the CFPB, which provides crucial support to older consumers. [“ Mick Mulvaney: CFPB ‘Sick, Sad Joke,'” YouTube, 09/10/14 (1:15); “Nomination of Rep. Mick Mulvaney to be Director of the Office of Management and Budget,” Senate Budget Committee, 01/24/17; Jim Puzzanghera, “Mulvaney requests zero funding for the Consumer Financial Protection Bureau,” Los Angeles Times, 01/18/18]
- Mulvaney has a bad track record on issues important to older Americans. He has advocated slashing Social Security and Medicare benefits, including raising the Social Security retirement age. As his budget director, Mulvaney talked Donald Trump into proposing $70 billion in cuts to the Social Security Disability Insurance program, which Mulvaney called “‘a very wasteful program.'” [Richard Rubin, “OMB Nominee Mick Mulvaney Wants Changes to Social Security, Medicare,” The Wall Street Journal, 01/24/17; Michael Grunwald, “Mick the Knife,” Politico, October 2017; “Face the Nation transcript March 19, 2017: Cruz, Pelosi, Mulvaney,” CBS News, 03/19/17]
- Schmidt challenged the constitutionality of the CFPB’s structure, which was designed to shield the agency from partisan attacks. In March 2017, Derek Schmidt signed on to an amicus brief challenging the constitutional structure of the CFPB, which was designed to protect the bureau from partisan attacks. Schmidt, with other Republican attorneys general, argued that the CFPB’s single-director structure “poses a direct threat to federalism interests.” The CFPB’s single-director structure was intended to shield the bureau “from the institutional and administrative constraints of independent commissions” and “from partisan attacks on its budget.” [Brief for the States of Texas et. al. as Amici Curiae in Support of Petitioners, PHH Corp. v. CFPB, Case No. 15-1177, 03/10/17; David Baumann, “CFPB Makeup Is Unconstitutional, Republican AGs Argue,” Credit Union Times, 03/13/17; Thomas O. McGarity, “Administrative law as blood sport: policy erosion in a highly partisan age,” Duke Law Journal, May 2012]
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