Money

Trump's consumer watchdog enforcer yet to do any enforcing

April 12, 2018 08:54·
Wells Fargo could face as much as $1 billion in fines

Wells Fargo could face as much as $1 billion in fines

Mick Mulvaney defended his leadership of the Consumer Financial Protection Bureau - an agency he once called a "joke" - in front of a House committee Wednesday, dismissing criticism from Democratic lawmakers that he was weakening the watchdog agency.

Since Mulvaney took over in November, the bureau has not issued an enforcement action against any financial company and has dropped cases against payday lenders. "Despite what you may have heard about what I was going to do when I got in there - I think that we have ten fewer people working there now than the day I took over, and that's out of 1627 people". Still, Mulvaney emphasized that under a strict reading of the Dodd-Frank legislation that created the CFPB, he only had to appear and not actually provide any testimony.

"I'm reclaiming my time", Waters declared. Cordray had designated CFPB Deputy Director Leandra English as the acting director.

On Monday, news broke that the top US watchdog for consumer finance, the Consumer Financial Protection Bureau (CFPB), is going after the bank with a record fine of at least several hundred millions of dollars.

"I want to be very clear that Democrats' participation in this hearing is not in any way an acknowledgment of Mr. Mulvaney's legitimacy at the consumer bureau", said Waters, the top ranking Democrat on the committee, in her prepared remarks. Republicans repeatedly questioned whether the CFPB had so much power that Mulvaney could legally ignore their questions, while Democrats refused to even concede that Mulvaney was the agency's legal acting director.

After Senate passage last month of the bipartisan reg relief bill sponsored by Senate Banking Committee Chairman Mike Crapo, R-Idaho, which did not include changes to the CFPB, House GOP leaders have said they would like to see a final package go further - with more substantive regulatory reforms.

The four-hour-long hearing of the House Financial Services Committee was marked by partisan bickering about the Trump administration's takeover of the CFPB, including the revelation that Mulvaney had spent more than $3,000 to frost the glass around his and other offices. He called on Congress to take control of funding the bureau from the Federal Reserve, saying "I cannot believe I can walk down the street and get $700 million with no accounting to anybody". He has urged Congress to pass a law that would subject the CFPB to the traditional congressional budget process, instead getting its funds from the Federal Reserve. He said those CFPB staffers have leaked misleading information with the goal of disparaging his efforts to steer the bureau in a new direction.

"I should not be able to walk down the street and get a check for $700 million, no questions asked", he said. It is expected that Trump will eventually nominate someone, but Mulvaney will remain in this role until the end of the year. This is the first of the two hearings where Mulvaney will testify, with the second hearing to be held before the Senate on Thursday. Elizabeth Warren, D-Mass., the CFPB's architect and the most vocal critic of the acting director.

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