Mick Mulvaney wanted to get rid of the Consumer Financial Protection Bureau when he was in Congress, once calling the watchdog agency he now heads a “sick, sad” joke.
But to the surprise of consumer advocates and people who worked at the bureau under former President Barack Obama, he hasn’t blown the place up.
Mulvaney has continued with dozens of lawsuits and nearly 100 investigations into corporate abuses in the five months since President Donald Trump installed him as the bureau’s acting director.
On his watch, the agency issued its second-largest fine ever — $500 million against Wells Fargo for auto insurance and mortgage-lending abuses. The only major regulation he has reined in is one curbing payday lending, which Republicans in Congress have in their cross hairs anyway. And the staff of 1,700 has only 10 fewer employees now than on the day he walked in the door.
CFPB supporters still fear that Mulvaney is weakening the agency. He has put out a dozen or so requests for public input on ways to overhaul the bureau, telegraphing his intention to limit its reach. And he is thought to be slow-walking enforcement, with no new cases being brought since he took over.
But what was once concern about a bomb-thrower tearing up the agency that was the brainchild of liberal firebrand Elizabeth Warren (D-Mass.) has now morphed into a less-immediate worry about a slowdown in efforts to combat corporate wrongdoing. Rather than fireworks, it’s death by a thousand cuts.
“The biggest difference is, charitably, you could call it a lack of ambition,” former CFPB Assistant General Counsel Anne Tindall said.
The CFPB declined to comment.
While Mulvaney hasn’t initiated new enforcement actions, he says fears that he was going to dismantle the agency are wildly exaggerated. “When I took over, we had roughly 26 lawsuits ongoing,” he told the House Appropriations Committee on April 18. “I dismissed one, because the other 25 I thought were pretty good lawsuits.”
Despite hand-wringing among Democratic lawmakers over the decision to drop the payday lender lawsuit, the fact is some career staffers had their own concerns about the viability of the case — especially after it was moved from the 7th U.S. Circuit Court of Appeals to the less consumer-friendly 10th Circuit.
In theory, Mulvaney has only two months to complete his work before his temporary appointment is up, so he has to work fast to leave a lasting imprint on the agency. But Mulvaney, who also serves as White House budget director, has pointed to the glacial pace of Senate confirmations in suggesting he could be around until the end of the year.
He may need more time than that to have a lasting impact. For all his talk that the landmark Dodd-Frank law of 2010 gave the CFPB director too much power, in reality he has limited authority. He needs congressional approval for any deep changes in the way the CFPB operates. Nixing regulations can be a lengthy process. And dropping cases against high-profile bad actors carries political risk.
“The thing that tends to get exaggerated in the public press is the notion that all these regulations that came out of Dodd-Frank are going to disappear,” said former CFPB official Peter Wilson. “As a legal matter, getting rid of regulations is a pretty hard process — you generally have to go through the same process you did to get them enacted.”
Said one former CFPB official, who requested anonymity to discuss the bureau’s work frankly: “I don’t really fear that a lot of things will be summarily stopped or dropped — it’s a huge risk to take a memo that’s been laid out, with violations listed, etc., and be the guy who says no. And then something catastrophic happens and you’re the guy who let them off.”
The official added, “Washington is full of whistleblowers, so I don’t worry about it.”
Former employees and CFPB advocates still have plenty of gripes about the Mulvaney tenure — chief among them are staff morale and restrictions on data collection that he has imposed. And there’s a sense that more is to come as he rides out his 210-day appointment.
The bureau’s business has slowed partly because nearly everything has to go through the layer of nine political appointees whom Mulvaney installed alongside associate directors. Warren, a Massachusetts Democrat, has noted that such appointees are highly unusual at a financial regulator.
Meanwhile, Mulvaney's gleeful statements bashing the way the bureau was run in the past, and reports that he has launched an investigation into leaks from the bureau, is taking a toll on the rank and file.
“Some enforcement cases take months or years to put together. Worrying your new boss will shut down your case is bad for morale,” said Joanna Pearl, a former CFPB enforcement attorney who left in January. “Mulvaney's statements and actions make people justifiably worried he won't continue with matters that are in the interest of consumers."
Perhaps more alarming to those who know how the agency works is Mulvaney’s limit on data collection. Bank examiners are now forbidden from taking data off-site — a move Mulvaney has defended by citing cybersecurity concerns.
“Data is the lifeblood of a regulator — it's essential to everything we do,” a former senior CFPB official said. “To hear they are intentionally cutting off those essential sources of information was super disturbing. It's like choosing to fly blind.”
States still have operating agreements with the CFPB to share data, though — and to the extent that the CFPB is retrenching, consumer advocates take heart that state attorneys general are stepping into the breach.
“States and cities have long been at the front lines of protecting their communities from predatory practices and financial fraud,” Pearl said. “With the CFPB withdrawing from this space, the role of state and local governments is more important than ever."