Removing Barriers Blog

CFPB Director WSJ Op-ed Outlines New Vision for the Agency
Posted January 24, 2018 by Chandler Schuette

Following a two-page letter sent to staff outlining a new vision for the Consumer Financial Protection Bureau, Interim Director Mick Mulvaney detailed the mission in a Wall Street Journal Op-ed. In his piece, he made the following statements, 

“It’s fair to say that the bureau’s previous governing philosophy was to “push the envelope” aggressively, under the assumption that we were the good guys and the financial-service industry was the bad guys.” 

“That is going to be different. That entire governing philosophy of pushing the envelope frightens me a little. We are government employees, and we work for the people. That means everyone: those who use credit cards and those who provide the credit; those who take out loans and those who make them; those who buy cars and those who sell them. All of those people are part of what makes this country great, and all of them deserve to be treated fairly by their government. There is a reason Lady Justice wears a blindfold and carries a balance scale along with her sword.” 

“It is not appropriate for any government entity to “push the envelope” when it comes into conflict with our citizens. We have the power to do damage to people that could linger for years and cost them their jobs, their savings and their homes. If the CFPB loses a court case because we “pushed too hard,” we simply move on to the next matter. But where do those we charged go to get their time, their money and their good names back? If a company closes its doors under the weight of a multiyear Civil Investigative Demand, we still have jobs at CFPB. But what about the workers who are laid off as a result?” 

Despite his criticism of past practices, Mulvaney also stated that the CFPB will continue to enforce consumer protection laws against bad actors noting, “There will absolutely be times when circumstances require us to take dramatic action to protect consumers. At those times, I expect us to be vigorous in our enforcement of the law. But bringing the full weight of the federal government down on the necks of the people we serve should be something that we do only reluctantly, and only when all other attempts at resolution have failed.” 

Mulvaney also pointed out the CFPB’s past rulemaking priorities did not seem to be driven by the data collected through the Bureau’s complaint database, a concern that CUNA also highlighted on several occasions in regards to credit union small dollar lending and overdraft services. When discussing future CFPB rulemaking efforts, Mulvaney noted, 

“On regulation, it seems that the people we regulate should have the right to know what the rules are before being charged with breaking them. This means more formal rule making and less regulation by enforcement. And we will be prioritizing. In 2016, almost a third of the complaints into this office related to debt collection. Only 0.9% related to prepaid cards and 2% to payday lending. Data like that should, and will, guide our actions.” 

Additionally, Mulvaney outlined that there will be more cost benefit analysis of CPFB rules moving forward stating, “the Dodd-Frank Act, which established the CFPB, requires us to ‘consider the potential costs and benefits to consumers and covered persons.’ To me, that means quantitative analysis should drive our decisions. And while qualitative analysis certainly can play a role, it should not be to the exclusion of measurable ‘costs and benefits.’ There will be a lot more math in our future.” 

Mulvaney also outlined how the CPFB’s enforcement actions may change stating, “When it comes to enforcement, we will focus on quantifiable and unavoidable harm to the consumer. If we find that it exists, you can count on us to pursue the appropriate remedies vigorously. If it doesn’t, we won’t go looking for excuses to bring lawsuits.” 

A number of the concerns Mulvaney highlighted about past CFPB rulemaking efforts and other approaches have been shared by credit unions over the past several years. CUNA looks forward to continue its work with the CFPB to ensure that future CFPB efforts focus on bad actors and limited unintended negative consequences on safe and affordable credit union products and services.