The Other Government Shutdown: Mulvaney’s Weeklong Assault on the Consumer Bureau

While much ink has been spilled on the back and forth between members of Congress and the White House as negotiations continue this week in an effort to avoid a government shutdown, one key Trump administration official escaped widespread scrutiny as he launched a brazen effort to shut down an independent federal agency from the inside.

Office of Management and Budget Director Mick Mulvaney, who also serves as “acting director” of the Consumer Financial Protection Bureau (CFPB) after being installed by Trump in November, has taken a wrecking ball to the Bureau. This week alone, he has:

  • Stalled an important rule reigning in the worst practices of predatory payday lenders;
  • Offered to let Wall Street special interests destroy the CFPB from the inside;
  • Refused to fund the Bureau and instead began draining its emergency reserve fund;
  • Dropped a CFPB case against payday lenders caught using American Indian Tribes as a shield to charge 950% interest rates on their loans.

Trump promised during his campaign to take on Wall Street special interests and to look out for those who had been left behind and taken advantage of by powerful financial institutions. Mulvaney’s actions this week further underscore just how big that lie really was.

Mulvaney’s Weeklong Assault on the CFPB:

MONDAY

  • As America celebrated Rev. Martin Luther King, Jr.’s contributions to the fight for civil rights and economic justice, Mulvaney was preparing for a week of announcements that will make life harder for the working poor and people of color – those typically targeted by financial predators and the very people King gave his life fighting to help.

TUESDAY

  • Mulvaney Stalled CFPB’s Important Rule Protecting Consumers from Predatory Payday Lenders — This After Taking Nearly $63,000 from Payday Lenders as a Member of Congress. Mulvaney’s CFPB announced on Tuesday it would waive compliance and reconsider its important new rule issued earlier this year that would have protected tens of millions of consumers from predatory payday, car title, and other short-term lenders. Over the course of his congressional career, Mulvaney received $62,950 in donations from the payday lending industry. [Renae Merle, “Consumer protection bureau changes direction, will reconsider rule that sets stricter limits on payday lending,” Washington Post, 1/16/18; OpenSecrets search for Payday Lenders, Center for Responsive Politics, accessed 12/13/17.]

WEDNESDAY

THURSDAY

  • Mulvaney Requested $0 Dollars in Quarterly Funding for the CFPB and Instead Announced He Will Begin Draining the Bureau’s Emergency Reserve Fund. The CFPB is not funded by tax dollars. Instead the Bureau’s director makes a quarterly request for funds from Federal Reserve profits – that is how it has been funded since its creation in 2010. Mulvaney requested $0 this quarter and will instead use money from the Bureau’s emergency reserve fund, putting the important watchdog in jeopardy should an actual financial crisis present itself. [Kevin McCoy, “Trump appointee seeks $0 funding for Consumer Financial Protection Bureau,” USA Today, 1/19/18]
  • Mulvaney Dropped a Lawsuit Against Predatory Payday Lenders Hiding Behind American Indian Tribes And Charging 950% Interest Rates. Despite pledging after his appointment that the CFPB would “continue to meet its legal and statutory deadlines,” Mulvaney dropped “a lawsuit against a group of payday lenders” accused “of deceiving consumers and failing to disclose the true cost of the loans, which carried interest rates as high as 950 percent a year.” Remember Mulvaney took nearly $63,000 from payday lenders when he was in Congress. [Zeke Faux “CFPB Signals Shift by Dropping Payday Lender Lawsuit,” Bloomberg, 1/18/18; Andrew Restuccia, “Mulvaney imposes temporary hiring, regulations freeze on CFPB,Politico, 11/27/17; OpenSecrets search for Payday Lenders, Center for Responsive Politics, accessed 12/13/17.]

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