Mulvaney Tells Anti-CFPB Crowd He’ll Weaken Anti-Discrimination Efforts and Use Fuzzy Math to Give Wall Street A Pass

In Speech to Group Funded by a Who’s Who of Anti-CFPB Wall Street Insiders, Mulvaney Telegraphs Massive Future Changes to Bureau’s Consumer Protection Mission


WASHINGTON, D.C. – Today, before a group sponsored by a host of anti-CFPB law firms and Wall Street special interests, Mick Mulvaney said the CFPB may begin considering the scale and frequency of violations when determining potential actions against companies under CFPB jurisdiction – a change that could let financial predators with thousands, even millions of victims off the hook.Mulvaney also indicated he is exploring ways undermine the bureau’s efforts to combat discrimination in the financial services sector by shifting its focus away from addressing actual racism, sexism, and other forms of bigotry that occur in practice regardless of intent.

Mick Mulvaney wants the CFPB to use fuzzy math, so he can let the Wall Street special interests that showered him with $1.3 million in campaign cash off the hook. He is literally saying the bureau may consider ignoring widespread illegal activity. In other words, a credit card company that processes a billion transactions each year and only skims off the top of a few million, might get a pass on his watch. We are through the looking glass,” said Karl Frisch, executive director of the consumer advocacy organization Allied Progress.

He continued, “Mulvaney also said he’s exploring ways to undermine the CFPB’s efforts to combat discrimination in the financial services sector by shifting its focus away from addressing actual racism, sexism, and other forms of bigotry in the financial sector as a matter of practice regardless of intent. Perhaps the irony was lost on him that he was launching attacks against the Equal Credit Opportunity Act (ECOA) which barred discrimination against women in finance to a room full of women in finance at an event about women in finance.”

What You Need To Know

  • On May 29, CFPB “Acting Director” Mick Mulvaney said the bureau would begin to consider the scale and frequency of violations when determining potential actions against companies under CFPB jurisdiction. While speaking at a Women in Housing & Finance Public Policy Luncheon in Washington, DC, Mick Mulvaney said he thought, if a bad actor was “‘doing something less than one-tenth of 1 percent of the time, maybe — maybe — it’s evidence of a lack of criminal intent, and maybe there’s a good place … for me to execute some prosecutorial discretion.’” [Katy O’Donnell, “Mulvaney: Rate of violations to factor in future CFPB actions,” Politico, 05/29/18 and “Public Policy Luncheon with Mick Mulvaney, Acting Director, Bureau of Consumer Financial Protection,” WHFDC.org, accessed 05/29/18]
  • This would mean companies that commit thousands of violations could get off with a slap on the wrist due to the scale of their businesses. Mulvaney also told the group that “12,000 out of 3.5 million [transactions] is not that many. And so the question then becomes, is this systematic, is it intentional? So we are going to start to look at that.‘” [Katy O’Donnell, “Mulvaney: Rate of violations to factor in future CFPB actions,” Politico, 05/29/18]
  • At the same event, Mulvaney said the CFPB was reviewing the application of the disparate impact doctrine under the Equal Credit Opportunity Act (ECOA) – the law that bans lenders from discriminating against credit applicants. Mulvaney said the review came in the wake of “Congress’ decision to overturn a 2013 CFPB rule on auto lending.  Because the CRA means the Bureau is “‘no longer allowed to do anything substantially similar’ with regard to auto lenders,” Mulvaney said “‘it has taken back for the legislature any power to make any rules about disparate impact when it comes to ECOA.” [Katy O’Donnell, “Mulvaney: Rate of violations to factor in future CFPB actions,” Politico, 05/29/18]
  • Mulvaney also said that the CFPB was “‘reviewing all of our rules regarding ECOA’” so as to be consistent across industries, opening the possibility that the auto-lending CRA could impact non-auto-lending enforcement. For Mulvaney, this means he’s asked himself “‘If I’m enforcing disparate impact against home builders, am I enforcing the law the same as I am against auto lenders?’” [Katy O’Donnell, “Mulvaney: Rate of violations to factor in future CFPB actions,” Politico, 05/29/18]
  • Mulvaney comments were made at an event hosted by Women in Housing & Finance which is affiliated with some of the biggest banks and consumer financial companies in the country including BNY Mellon, Capital One, Discover, Quicken Loans and others. The 2017-2018 President of the WHF Board of Directors is Joanna Girardin Shapiro, a Managing Director at BNY Mellon. WHF has also had sponsorship relationships with Quicken Loans, the Online Lenders Alliance and One Reverse Mortgage. Additionally, the WHF Foundation has had sponsorship relationships with Capital One, Discover, Prudential and others. [“WHF 2017-2018 Board of Directors,” WHFDC.org, accessed 05/29/18; “Sponsors and Supporters,” WHFDC.org, accessed 05/29/18, and “Partners and Supporters,” WHFDC.org, accessed 05/29/18]

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