Memo To Media: The People Always Lose with Mulvaney Enforcement

July 31, 2018

To: Interested Parties

From: Karl Frisch, Allied Progress

Date: Tuesday, July 31, 2018

Re: The People Always Lose with Mulvaney Enforcement

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You can tell a lot about the values of a White House and its officials by the way they choose to enforce the law. In the case of Mick Mulvaney, a man responsible for enforcing various consumer protection laws at the Consumer Financial Protection Bureau (CFPB) and developing the Department of Justice’s (DOJ) budget, we have learned he has little regard for the impact his actions have on the lives of real people and is instead almost single-mindedly focused on allowing the powerful to prey upon the weak.

As “Acting Director” of the CFPB, Mulvaney is letting financial scammers off the hook or approaching the enforcement of consumer protection laws with a “softer touch” than his more aggressive predecessor who returned $12 billion to more than 20 million Americans who had been wronged by financial institutions. It is little wonder one media outlet recently dubbed his practice of watering down the penalties big banks, predatory lenders, and others pay when they screw people over, the “Mulvaney discount.”

At the same time, Attorney General Jeff Sessions has said he wants the most aggressive prosecution possible in all cases and its immigrants, people of color, and the politically powerless who bear the brunt of his fanaticism. Despite his “softer touch” at the CFPB, Mulvaney has cheered Sessions on from the sidelines. In fact, Mulvaney crated a budget as head of OMB that increases funding for prisons, Immigration Customs Enforcement (ICE), and the so-called War on Drugs while requesting zero funding for the CFPB.

When it comes to Mulvaney’s view of enforcement, one thing is clear: the people always lose.

MULVANEY’S “SOFTER TOUCH” CFPB

• Mulvaney’s CFPB is going soft in its enforcement duties. The CFPB resumed enforcement actions after pausing them under Mick Mulvaney’s leadership; however, the resumed enforcement strategy focuses on negotiating with targets rather than litigating disputes. In recent settlements under Mulvaney, multiple cases did not include compensation for harmed consumers.[Yuka Hayashi, “CFPB Enforcement Is Back—With a Softer Touch,” Wall Street Journal, 07/26/18]

• Hasn’t filed a single lawsuit against a bad financial actor since becoming CFPB “Acting Director” in November. [Yuka Hayashi, “CFPB Enforcement Is Back—With a Softer Touch,” Wall Street Journal, 07/26/18]

• Closed a CFPB enforcement case and lied about it.Mulvaney’s press representative claimed that the decision to drop a lawsuit against predatory lender Golden Valley was made by “professional career staff,” and not Mulvaney himself. However, several CFPB staffers, who spoke on condition of anonymity, told a reporter that “Mulvaney decided to drop the lawsuit even though the entire career enforcement staff wanted to press ahead with it.” Mulvaney’s press representative finally admitted “that Mulvaney was indeed involved in the decision to drop the lawsuit.” [Chris Arnold, “Trump Administration Plans To Defang Consumer Protection Watchdog,” NPR, 02/12/08]

• Dropped a CFPB investigation into one of his former donors.Under Mulvaney’s leadership, the CFPB completed an investigation into World Acceptance Corporation “without an enforcement action.” The CFPB had opened an investigation into World Acceptance Corporation under Richard Cordray’s leadership. “World Acceptance, one of the nation’s biggest payday lenders, is based in South Carolina and gave Mulvaney thousands of dollars in campaign contributions while he represented the state in Congress.” [“Former payday lender CEO now wants to run the CFPB,” Associated Press, 03/06/18]

• Stripped the Office of Fair Lending of their enforcement power.In February 2018, Mulvaney and the Trump administration “stripped enforcement powers” from the CFPB’s Office of Fair Lending and Equal Opportunity. The office was “responsible for pursuing discrimination cases.” Consumer advocates argued that “separating the fair-lending office from its enforcement power weakens its power to pursue cases.” [Renae Merle, “Trump administration strips consumer watchdog office of enforcement powers in lending discrimination cases,” The Washington Post, 02/01/18]

• Dropped a CFPB investigation of a company that allegedly stole millions from customers, and considered dropping other investigations.Mulvaney’s CFPB also “dropped [a] matter” against National Credit Adjusters which was accused of stealing millions from customers. Mulvaney was also “weighing whether to drop cases against three [other] payday lenders” according to “people with direct knowledge of the matter.” [Ken Sweet, “Payday lenders, watchdog agency exhibit cozier relationship,” Associated Press, 03/06/18; Patrick Rucker, “Exclusive: Trump official quietly drops payday loan case, mulls others – sources,” Reuters, 03/23/18]

FOLLOW THE MONEY

• Mulvaney crafted a budget that increased funding for prisons, ICE, and the War on Drugs.The budget that Mulvaney’s OMB prepared for Fiscal Year 2019 emphasizes an “increase in the number of Immigration and Customs Enforcement officers, Border Patrol agents, and immigration judges.” Specifically, the budget would include funding for “75 additional immigration judge teams.” [Michelle D. Christensen, “The Executive Budget Process: An Overview,” Congressional Research Service, 07/27/12; EFFICIENT, EFFECTIVE, ACCOUNTABLE AN AMERICAN BUDGET, Office of Management and Budget, FY 2019]

• Mulvaney requested zero funding for the Consumer Financial Protection Bureau.Mulvaney said the bureau would instead use funds from the CFPB’s “‘reserve fund,’” maintained by Director Cordray “in case of overruns or emergencies.” [Michael Grunwald, “Mulvaney requests no funding for Consumer Financial Protection Bureau,”Politico, 01/18/18]

MULVANEY BACKS AGGRESSION FROM WHITE HOUSE AND DOJ

• Mulvaney defended the Trump Administration family separation policy, saying it was law enforcement as usual.Mick Mulvaney defended the Trump Administration “zero tolerance” immigration policy that led to family separations. He said that “‘the law is that if you get detained and charged with a crime, you don’t get to keep your kids around.'” [Sylvan Lane, “Mulvaney defends family separations at border,” The Hill, 06/20/18]

• The Sessions DOJ is unnecessarily aggressive in prosecuting immigration crimes, separating families that crossed the border together.The Trump Administration began their cruel child separation policy as a means of deterring migrants from coming to the United States with their children. A White House aide said they wanted to send the message that “‘no one is exempt from immigration law.'” Still, family separation is a result of the “harshest view…possible” of immigration enforcement. One reporter noted that traditionally illegal border crossings are “relatively minor [infractions]” with comparatively light punishments. [Quinta Jurecic, “A Choice Between Cruelty and Mercy,” The Atlantic, 06/18/18]

• The Sessions DOJ decided not to defend hundreds of thousands of undocumented individuals from deportation in court after the government had granted them protection.In June 2018, the Justice Department announced that it would not be defending the Deferred Action of Childhood Arrivals program, commonly known as “DACA”, in a federal lawsuit. DACA granted protection from deportation for at least 690,000 undocumented individuals brought to the United States as children. [Nicole Chavez, “Justice Department won’t defend DACA in Texas lawsuit,” CNN, 06/09/18; Alan Gomez, “Who are the DACA DREAMers and how many are here?,” USA Today, 02/13/18]

• The Sessions DOJ wants the most aggressive prosecution possible in all cases.In May 2017, Jeff Sessions released a memorandum for all federal prosecutors directing them to pursue “the most serious, readily provable offense”. He goes on to state, “By definition, the most serious offenses are those that carry the most substantial guidelines sentence, including mandatory minimum sentences.” [Department Charging and Sentencing Policy,” Office of the Attorney General, 05/10/17; Sari Horwitz and Matt Kapotosky, “Sessions issues sweeping new criminal charging policy,” The Washington Post, 05/12/17]

• The Sessions DOJ wants U.S. Attorneys to enforce federal marijuana laws, noting that Congress made marijuana use a “‘serious crime.'”In January 2018, U.S. Attorney General, Jeff Sessions, released a memorandum for all US Attorneys directing them to “enforce the laws enacted by Congress and to follow well-established principles when pursuing prosecutions related to marijuana activities.” Sessions noted that Congress made marijuana use a “‘serious crime.'” [Press Release, “Justice Department Issues Memo on Marijuana Enforcement,” The United States Department of Justice, 01/04/18; Jeff Sessions, “Marijuana Enforcement,” Office of the Attorney General, 01/04/18]

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