Instead of ‘pushing the envelope,’ Mulvaney is mailing it in at CFPB

As the lawsuit over the leadership of the Consumer Financial Protection Bureau (CFPB) heads to the Washington, D.C. Circuit Court of Appeals, President Trump’s acting director, Mick Mulvaney, issued a mission statement to all staff outlining his vision for the agency.

Given his past vocal opposition to the CFPB and his recent request for a zero budget for second quarter of 2018 (spending reserves instead), many are concerned that the acting director will gut or neuter the agency. His mission statement seems to confirm the worst fears.

{mosads}He began by cherry-picking a quote from the previous director, Richard Cordray, about “pushing the envelope” to protect consumers from financial predators, which  Mulvaney found frightening.

He then ignored the CFPB’s statutory mandate and mission, disregarded the history of blatant predatory conduct that necessitated the creation of the CFPB and didn’t even mention the CFPB’s stellar track record of returning more than $12 billion to almost 29 million ripped off Americans. 

But, let’s skip all of that and just follow the logic of what he sees as the CFPB’s new mission. He began by stating that everyone at the CFPB is a government employee who works not just for the government, but for the people.

More specifically, he said that they work for “those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them.” 

In theory, that might sound great, but as a practical matter, it simply makes no sense for an agency that is required by law to protect consumers from those very same credit card providers, banks and other financial institutions when they break the laws or engage in misconduct. 

Applying that philosophy to the real world the CFPB actually operates in, this means that the new CFPB works for not just the servicemen and women who were the victims of illegal debt collection practices, but also for Freedom Stores which had to repay them $2.5 million.

It means that the CFPB works for not just the Corinthian College students who were the victims of predatory lending practices and who were given inflated job placement rates, but also for the ECMC Group that had to forgive $480 million in student loans to them.

It means that the CFPB works not just for mobile phone customers who were billed illegal third-party charges, but also for Sprint and Verizon Wireless, who bilked their customers with these bogus fees.

It seems odd, but Mulvaney’s position is that the CFPB works not just for the millions who were ripped off by Wells Fargo, but also for Wells Fargo, which ripped them off. 

Given that the CFPB is the only cop protecting consumers on the Wall Street beat, Acting Director Mulvaney is like a chief of police. As such, it’s fair to ask, “What would Chief Mulvaney’s anti-crime plan look like to stop a crime wave (which is proved weekly by the headlines of the latest financial ripoffs)?” 

One could understand his statements to suggest that he would take the following steps:

• First, see if the criminals will stop on their own, i.e., self-police, even though they are getting rich ripping people off.
• Second, see if a group of criminals would join together to create a self-regulatory organization to monitor and stop themselves and their predatory behavior.
• Third, issue strongly worded press releases about being tough, hoping that will scare them, while at the same time asking the criminals for input on how the police department (i.e., CFPB) is or should be performing.
• Fourth, see if verbal warnings might stop them, although they are still getting rich and the victims are still piling up.
• Fifth, meet with them and try to reason with them, as their pockets are being stuffed with victims’ money.
• Sixth, meet with former staff, who are now lobbying for the perpetrators, to carefully listen to all their reasons for their illegal conduct and be polite, even though their excuses don’t pass the laugh test.
• Seventh, give them a written warning, which will not interfere with their profit making.
• Eighth, hold a fundraiser and see how many of the criminals will attend and how much they will contribute to your campaign or the campaigns of your friends.
• Ninth, go after some small fish who have no money for lawyers and lobbyists and claim to be getting tough on the really bad guys.
• Last, if all else fails and the press just won’t give up reporting on the “fake news” crime wave in the city, impose an itty-bitty fine that will be factored in to the cost of doing business, and hold a news conference to brag about how tough you are getting on the bad guys. 

But, no matter how bad things get, never, ever “push the envelope” to protect ripped off consumers or get aggressive to stop the financial crime wave. And, never, ever forget to think about the financial criminals as much as the consumer victims.

After all, according to the new mission statement, they are all just people being served by the CFPB. 

Nick Jacobs is communications director at Better Markets, a Washington-based organization that promotes the public interest in financial reform, financial markets and the economy.