Mulvaney backs CFPB official under fire for blog posts dismissing racism

The acting chief of the Consumer Financial Protection Bureau (CFPB) said Tuesday that an official under fire for blog posts dismissing racism will remain in charge of the agency’s lending discrimination cases.

Acting CFPB Director Mick Mulvaney told bureau employees in an email obtained by The Hill that Eric Blankenstein would not be fired or reassigned despite a growing revolt over his leadership of the bureau’s office of supervision, enforcement and fair lending.

“I recognize that this is not the result that some of you may have wanted. But I stand by my decision and will proceed accordingly,” Mulvaney wrote in a Tuesday evening email.

{mosads}Blankenstein, director of CFPB’s supervision division, admitted to writing anonymous blog posts in 2004 calling most hate crimes hoaxes and questioning whether using the n-word was inherently racist. He expressed regret for his language in a Monday email to CFPB employees, and insisted he was not racist.

Mulvaney, who took control of the CFPB in November, hired Blankenstein to the bureau in December and elevated him to a senior position in February. Blankenstein currently oversees the CFPB’s expansive supervision and prosecution of banks and lenders suspected of wrongdoing.

Mulvaney in February also proposed stripping the enforcement powers from the CFPB’s office of fair lending and transferring them to Blankenstein’s division.

The emergence of Blakenstein’s blog posts has sparked pushback against his oversight of racial discrimination cases and Mulvaney’s planned organizational changes.

Patrice Ficklin, director of the fair lending office, said Friday that Blankenstein could not be trusted to carry out its duties and asked Mulvaney to abandon the plan.

The president of the National Treasury Employees Union and the leader of its CFPB chapter also called on Mulvaney to fire Blankenstein and scrap the organizational revamp.

Mulvaney on Tuesday told CFPB employees that “the merits of the changes” he proposed “remain the same as they did when I announced the reorganization several months ago.”

“I will not be undoing the changes,” Mulvaney said.

Mulvaney’s Tuesday email was his first effort to personally address the rebellion over Blankenstein’s writings since the Washington Post reported on the blog posts last Wednesday.

The acting director told colleagues that he has “already started to explore” issues raised by Obama-era CFPB veterans concerning Blankenstein’s oversight of fair lending.”

“I hope everyone understands that this is a unique circumstance from a management perspective and that this matter needs to be handled with the utmost professionalism,” Mulvaney said in the email.