Consumer Financial Protection Bureau building in Washington, D.C. Photo by Diego M. Radzinschi

The confusion over the name of the federal consumer watchdog agency is indicative of widespread uncertainty over who's going to run the agency and what they will and will not do.

Some call it the CFPB. Others call it the BCFP.

Whatever its name is, the agency remains in a state of flux, as it reviews what it does and how it does it.

“Under new leadership, the bureau has engaged in a comprehensive review of its activities and is assessing whether those activities align with its statutory authority,” CFPB spokesman John Czwartacki said recently.

That review is the result of the Trump Administration taking over the agency from the Obama Administration. Under Obama and former Director Richard Cordray, the CFPB was particularly aggressive – some say too aggressive. Since Cordray resigned to run for governor of Ohio, the bureau has been run by an acting director, Office of Management and Budget Director Mick Mulvaney, who has signaled that the agency intends to become more pro-business.

That was obvious recently, when the agency's student loan ombudsman, Seth Frotman, resigned, sending a blistering letter to Mulvaney accusing him of abandoning consumers in favor of the nation's largest financial institutions.

“After 10 months under your leadership, it has become clear that consumers no longer have a strong, independent consumer bureau on their side,” Frotman wrote.

The CFPB is required to have a student loan ombudsman, so Frotman will have to be replaced. That's just one of a myriad of uncertainties surrounding the agency.

It remains unclear whether the agency will change direction as a result of the requests for information the bureau solicited earlier this year, Alan Kaplinsky, co-practice leader for the Consumer Financial Services Group at Ballard Spahr, said.

“It is too soon to tell,” he said. “They have not yet reacted to the many [requests for information] that they issued.”

“Some form of change is going to take place,” Alexander Monterrubio, CUNA's senior director of advocacy and counsel, predicted. “The [request for information process] was not for nothing.”

The overall regulatory review includes the agency's controversial payday lending rules. Mulvaney has said he wants to revisit them and the agency is expected to issue revised rules next year.

But the payday lending rules aren't the only areas that remain muddled when it comes to the CFPB.

The Director

Trump has nominated OMB Associate Director Kathy Kraninger to head the agency, but when – or if – she takes over the agency is anyone's guess.

If she is confirmed, Kraninger is certain to continue the pro-business approach adopted by Mulvaney. Answering a written question posted to her by Democratic senator, she wrote, “Based on the information that is available to me at this time, I cannot identify any actions that Acting Director Mulvaney has taken with which I disagree.”

The Senate Banking Committee confirmed Kraninger by a party-line, razor-thin 13-12 vote, but her nomination has not been scheduled for a floor vote. An aide to Sen. Elizabeth Warren (D-Mass.) said the senator will use every parliamentary tool at her disposal to block confirmation.

Kraninger's nomination expires at the end of the year, as does Mulvaney's temporary position.

Kaplinsky said he doubts the Senate will confirm Kraninger before the election. In any event, he does not expect many changes at the agency if she is confirmed.

“I see her as being a clone of Mulvaney, particularly since she has no experience in the consumer financial services area and will be relying heavily on the political appointees who will remain at the bureau,” he said.

Agency Structure

Courts have given conflicting signals about the CFPB's single-director structure.

The full District of Columbia Circuit Court of Appeals agreed that Congress did not violate the Constitution when it created the single-director agency. However, Judge Loretta Preska of the Southern District of New York decided that the makeup of the agency indeed was unconstitutional.

And the Fifth Circuit Court of Appeals has ruled that the Federal Housing Finance Agency, which also has a single director, was unconstitutional. The issue could end up before the U.S. Supreme Court.

Military Lending Act Enforcement

Mulvaney has signaled that the CFPB intends to exclude the MLA from its examination of financial institutions because agency officials believe the bureau lacks the authority to include MLA.

Under former Director Richard Cordray, the bureau was particularly aggressive in its enforcement of the MLA, with Holly Petraeus heading the Office of Servicemember Affairs.

Democratic senators sharply criticized Mulvaney's decision, stating that the agency played a key role in protecting servicemembers.

When asked whether the CFPB will stop examining MLA compliance, Czwartacki said, “MLA is one authority, among many, that the bureau has examined. The bureau expects to convey its findings to Congress and to seek legislative clarity where warranted.”

Credit Union Advisory Council

In May, Mulvaney disbanded the CFPB's Credit Union Advisory Council, as well as a citizen's advisory group and community bank group. The agency gave conflicting reasons for the move.

Mulvaney aid at the time that he was trying to find new ways of communicating with stakeholders and recently held a series of roundtables to discuss CFPB issues.

However, the members of the three advisory groups had been appointed by Cordray, and under Mulvaney, the agency has taken a drastically different direction.

The agency sought new members for the three groups earlier this summer and aides said that a new credit union advisory council will be appointed soon.

But NAFCU and CUNA are pushing for more changes at the agency. For one, they would like to see Congress convert the CFPB into a five-member commission.

“There is a desire to see the bureau change in a positive way” for credit unions, Monterrubio said.