Image via Flickr user Gage Skidmore
Late last month, in his first press conference as acting director of the Consumer Financial Protection Bureau (CFPB) -- the government agency responsible for, well, protecting consumers in the financial sector -- Mick Mulvaney reiterated his contempt for the agency as “an awful example of a bureaucracy that has gone wrong.”The stinging remarks were nothing new for Mulvaney who, as a member of Congress, introduced legislation to to suppress CFPB’s public complaint data against major financial institutions.“If you really studied the constitutional nature of our government, you’ve studied the way that the bureaucracy is supposed to work,” Mulvaney continued. “It would both frighten and disturb you that this agency is as independent as it is.”While Mulvaney’s rhetoric was alarmist, his general point on the CFPB rings true. The bureau, birthed out of the 2008 financial crisis, is the most aggressive financial regulatory agency in federal government today. By making the CFPB director difficult to fire and inoculating its budget from the whims of congress, the architects, which include the likes of Elizabeth Warren, designed a rare bureaucracy that can act efficiently and aggressively.The CFPB’s first director, Richard Cordray, took full advantage of these enumerated powers. In Cordray’s five years at the helm, the bureau levied billions of dollars in fines for bank malfeasance and authored dozens of consumer-friendly rules and regulations on everything from student loans to credit cards.When it emerged last year that Wells Fargo had flagrantly set up fake accounts for millions of customers, Cordray’s team went after the bank hard. The CFPB eventually slapped the bank with a $100 million fine, to be paid back to the victims of the fraud. In November, the bureau released its final major regulation under Cordray, the payday rule, which requires shoddy lenders ensure consumers can pay back loans instead of doling them out like candy and forcing Americans into overwhelming debt traps.
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By promulgating rules and penalties in all corners of the financial world, the CFPB has accrued regulatory supervision over 124 financial institutions, from major players like JPMorgan Chase to the Golden 1 Credit Union in Sacramento, California.Cordray’s flurry of work was popular with Americans of both parties, which has made it difficult for conservatives to brazenly dismantle the agency, according to The Intercept. That all may change, however, now that Mulvaney is in charge.As soon as he stepped in the door, Mulvaney hired an enemy of the bureau in Republican congressional lawyer Brian Johnson. Johnson was previously employed by Rep. Jeb Hensarling, the Republican chair of the House Financial Services Committee who has attacked the CFPB from its incept and once called Cordray a “benevolent financial product dictator.” After hiring Johnson, Mulvaney initiated a hiring freeze and halted the implementation of all new rules. Mulvaney also temporarily froze payouts to harmed consumers, only to reverse course following backlash.
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By promulgating rules and penalties in all corners of the financial world, the CFPB has accrued regulatory supervision over 124 financial institutions, from major players like JPMorgan Chase to the Golden 1 Credit Union in Sacramento, California.Cordray’s flurry of work was popular with Americans of both parties, which has made it difficult for conservatives to brazenly dismantle the agency, according to The Intercept. That all may change, however, now that Mulvaney is in charge.As soon as he stepped in the door, Mulvaney hired an enemy of the bureau in Republican congressional lawyer Brian Johnson. Johnson was previously employed by Rep. Jeb Hensarling, the Republican chair of the House Financial Services Committee who has attacked the CFPB from its incept and once called Cordray a “benevolent financial product dictator.” After hiring Johnson, Mulvaney initiated a hiring freeze and halted the implementation of all new rules. Mulvaney also temporarily froze payouts to harmed consumers, only to reverse course following backlash.
Cordray tried to head off Mulvaney’s appointment to the CFPB by President Trump by appointing a top deputy, Leandra English, as acting director. President Trump picked Mulvaney, leading to a suit filed by English. While an initial federal court decision ruled against English’s request for a temporary order to block Mulvaney’s appointment, the case hasn’t been heard on the merits, according to The Intercept. English’s case will be heard on December 22.Eighteen state attorneys general have filed a brief in favor of English, and could become the main enforcers of financial regulatory laws should Mulvaney defang the CFPB."State attorneys general have express statutory authority to enforce federal consumer protection laws, as well as the consumer protection laws of our respective states," the group of 18 said in a statement. "We will continue to enforce those laws vigorously regardless of changes to CFPB’s leadership or agenda."Below are the 18 states whose attorney generals have pledged to aggressively enforce the financial regulations on the books. If financial reform is important to you, contact your state attorney general and share your thoughts:
- Connecticut
- District of Columbia
- Hawaii
- Illinois
- Iowa
- Maine
- Maryland
- Massachusetts
- Minnesota
- New Mexico
- North Carolina
- Oregon
- Vermont
- Virginia
- Washington