Mulvaney Pushed Plan to Kill CFPB, Now He Runs the Agency
Last year, then-Rep. Mick Mulvaney (R-S.C.) introduced legislation to kill the CFPB.
Now he’s running the agency.
In selecting Mulvaney, a former congressman and current director of the Office of Management and Budget, to serve as interim director, President Trump left no question about his intentions in dealing with the CFPB, which Mulvaney has referred to as “a joke.”
As a Republican House member from South Carolina, Mulvaney sponsored several pieces of legislation that were designed to either abolish the agency or greatly curtail its powers.
Last year was one of more than 300 House members who signed a letter to then-Director Richard Cordray asking him to exempt credit unions and community banks from some of the agency’s regulations.
And as a candidate for Congress, Mulvaney accepted campaign contributions from groups with business before the CFPB, including credit union trade groups and the association representing payday lenders.
Finally, a key staffer for Mulvaney while he was in the House now represents a Spanish bank that reportedly was about to be sued by the CFPB before Mulvaney took over.
The Mulvaney appointment is likely to create a great deal of intrigue in the agency, which is staffed by Cordray allies who favor aggressive enforcement. Those staff members no doubt will clash with Mulvaney.
And Mulvaney may have the job for quite some time. Trump is likely to choose a permanent director who possibly will be unacceptable to many Senate Democrats, resulting in a prolonged confirmation fight.
Mulvaney already has placed a 30-day regulatory moratorium on the agency.
And while he has vowed not to blow up the CFPB while he’s running the agency, his record in the House leaves no doubt about his views.
During his tenure in the House, Mulvaney:
- Sponsored legislation to repeal Title X of Dodd-Frank. That title created the CFPB.
- Pushed legislation that would have repealed the agency’s power to take action in cases of Unfair, Deceptive or Abusive Acts or Practices. Agency critics have said that power gives the agency too much power.
- Sponsored a bill that would have required the agency to verify consumer complaints before they were made public.
- Pushed a plan that would have prohibited the CFPB from issuing rules on payday lending for two years. In addition, states and tribes could have opted out of the rule.
As a member of Congress, Mulvaney also accepted thousands of dollars in campaign contributions from companies and associations with business before the CFPB.
For instance, Mulvaney accepted $12,000 from Wells Fargo during the past three election cycles, according to the Center for Responsive Politics, which compiles campaign contribution reports.
The agency has fined Wells Fargo $100 million for its widespread practice of opening bank accounts without customers’ knowledge.
During the past three elections, Mulvaney also received $25,000 from CUNA and $2,000 from NAFCU.
Both groups have complained that the CFPB, in its rulemaking, has failed to distinguish between large banks that caused the financial crisis and credit unions that have not.
And he received $10,000 from the Community Financial Services Association, which represents the payday lending industry.
That association has left open the possibility that it may file suit against the agency over final rules, which they say will unfairly inhibit their ability to make short-term rules.
Finally, Mulvaney may find himself in a particularly sensitive spot when it comes to Santander, a Spanish banking group.
Mulvaney’s former chief of staff, Natalee Binkholder, serves as vice president of federal government affairs at the banking group.
Last year, the CFPB fined Santander’s U.S. bank was fined $10 million in connection with its overdraft services. And there have been widespread press reports that the agency was poised to take action against the bank in connection with its auto loan business.
Supporters of strict enforcement by the CFPB were not pleased by the choice of Mulvaney to run the agency, even on an interim basis.
Shortly after the choice was announced, Sen. Elizabeth Warren (D-Mass) sent out the following message on Twitter: “A member of the GOP anarchy gang has no business running the agency. This is a giant middle finger to consumers.”
Warren has raised questions about OMB staff serving on an interim basis at the CFPB and about other potential conflicts of interest.
For instance, in a letter to Mulvaney and White House Counsel Don McGahn, Warren pointed out that CFPB rules prohibit employees from owning any security in any entity supervised by the bureau.
The rules also require employees to confirm divestiture in writing within 30 days of employment, she said.