Mulvaney Should Quit Fantasizing and Fulfill the CFPB’s Consumer Protection Mission
CFPB’s “Acting Director” Says He Wants the Bureau to be a “Gold Standard” Regulatory Agency like the SEC – He Can’t Even Match the Work of Previous CFPB Director
WASHINGTON, D.C. – In a Bloomberg News profile, Mick Mulvaney says he wants the Consumer Financial Protection Bureau (CFPB) to be the “gold standard” of regulatory agencies like the Securities and Exchange Commission (SEC). Even if one ignores the SEC’s shoddy record on Wall Street accountability, Mulvaney has a long way to go if he can’t even match the success of the CFPB’s previous director.
Since Mulvaney became “Acting Director” of the bureau in November, the SEC has initiated 55 enforcement actions while the CFPB has done only one on his watch and it actually began before he took over. Of course, the SEC’s budget dwarfs the CFPB’s (in 2019 the SEC requested $1.658 billion while Mulvaney requested $0 for the CFPB). That said, when Mulvaney’s seven-month tenure is measured against the previous director’s final seven months, he doesn’t do any better. Richard Cordray initiated 14 enforcement actions during that period.
“Mick Mulvaney clearly has no desire for the CFPB to achieve its stated mission of protecting consumers. Rather than fantasizing about transforming the CFPB into a government agency like the SEC that many see as ineffective at holding Wall Street accountable, he should use the power of the CFPB to protect consumers and go after financial predators. The CFPB was doing just fine before Mulvaney arrived,” said Karl Frisch, executive director of Allied Progress.
What You Need To Know
- In a May 2018 Bloomberg article, Mick Mulvaney mused that he wanted the CFPB to become a “‘gold-standard’” regulator like the U.S. Securities and Exchange Commission. Mulvaney said that to become more like the SEC, the bureau would need to disassociate itself from its origins as the brainchild of U.S. Senator Elizabeth Warren. [David Leonard and Elizabeth Dexheimer, “Mick Mulvaney Is Having a Blast Running the Agency He Detests,” Bloomberg, 05/25/18]
- Since November 27, 2018 – the day Mick Mulvaney took charge at the CFPB – the SEC has engaged in at least 55 enforcement actions against companies and individuals. These actions have included charging the former CIO of a unit of Equifax with “insider trading,” going after famed Silicon Valley startup Theranos for raising money “through an elaborate, years-long fraud,” and charging a Texas pastor in a “scheme to defraud elderly investors by selling them interests in defunct, pre-Revolutionary Chinese bonds.” [“SEC Press Releases since November 27, 2017”, SEC.gov, accessed 05/25/18 and “Former Equifax Executive Charged With Insider Trading,” SEC.gov, 03/14/18, “Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud,”SEC.gov, 03/14/18 and “SEC Charges Prominent Pastor, Financial Planner in Scheme to Defraud Elderly Investors,” SEC.gov, 03/30/18]
- During that same time-period (180 days), the CFPB has reported engaging in a single enforcement action… which was in the works before Mulvaney got there. Under Mulvaney’s leadership, the CFPB “didn’t make its first enforcement action… until mid-April, when it fined Wells Fargo & Co. a record $1 billion for deceptive auto loan practices.” Former CFPB staffers noted that “Mulvaney had little to do with the case, which was opened by Cordray and in the works long before Mulvaney arrived.” [“CFPB Press Releases since November 27, 2018,” CFPB.gov, accessed 05/25/18 and David Leonard and Elizabeth Dexheimer, “Mick Mulvaney Is Having a Blast Running the Agency He Detests,” Bloomberg, 05/25/18]
- This is in contrast to Richard Cordray’s last 180 days at the Bureau, when the CFPB engaged in at least fourteen separate enforcement actions.From May 30, 2017 to November 26, 2017, these actions included a proposed $183.3 million in relief for student borrowers harmed by Corinthian Colleges, action against Top Notch Funding for “lying in loan offerings to consumers who were awaiting payment from settlements in legal cases or from victim-compensation funds” including 9/11 first responders, and filing a suit against a company “illegally posing as [the] federal government” to consumers. [“Search of CFPB Press Releases from 11/20/17 to 11/26/17”, consumerfinance.gov, accessed 05/25/18; “CFPB Takes Action Against Aequitas Capital Management for Aiding Corinthian Colleges’ Predatory Lending Scheme,” consumerfinance.gov, 08/17/17; “CFPB Takes Action Against Top Notch Funding for Lying in Loan Offers to NFL Players, Deepwater Horizon Victims, and 9/11 First Responders,”consumerfinance.gov, 09/19/17; and “CFPB Sues Debt-Relief Companies Illegally Posing As Federal Government,”consumerfinance.gov, 10/12/17]
- Of course, the SEC has a much larger budget than the CFPB. For fiscal year 2019, the SEC has requested a $1.658 billion in funding, while during Richard Cordray’s final fiscal year at the CFPB, transfers from the Federal Reserve System were capped at $646.2 million. Mick Mulvaney has asked for $0 in funding for fiscal year 2019. [Press Release, “Investor Protection, Capital Formation and Market Integrity Are Top Priorities in SEC Budget Request,” SEC.gov, 02/12/18 and Donna Borak, “Trump consumer protection chief requests $0 in funding,” CNN Money, 01/18/18; The CFPB strategic plan, budget, and performance plan and report, Consumer Financial Protection Bureau, May 2017]
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