When the White House appointed Mick Mulvaney as interim director of the Consumer Financial Protection Bureau, many feared it meant trouble for the watchdog’s basic mission of shielding ordinary Americans from the banks, payday lenders, and debt collectors who prey on their pocket books. After all, Mulvaney—a renowned anti-regulatory zealot—had said in no uncertain terms that he did not think the CFPB should even exist. As a congressman from South Carolina, he was also a major recipient of campaign contributions from payday lenders; during his final election cycle, he raked in more than $31,000 from the industry, ninth among all members of Congress. (After Trump appointed him to the CBPB, Mulvaney claimed the donations wouldn’t pose a conflict of interest because, “I am not in elected office anymore.”)
So far, Mulvaney seems to be doing his best to confirm critics’ worst fears. Last week, the CFPB dropped a lawsuit in Kansas against four payday lenders without any explanation, other than a weak assurance that it would continue investigating the case. Meanwhile, International Business Times reports today that Mulvaney stealthily closed an investigation into a South Carolina-based payday lender, World Acceptance Corporation, which had previously donated to his campaigns.
While all of this was going on, Mulvaney decided to send out a memo to CFPB staff outlining the regulator’s new direction. The letter, obtained by Pro Publica’s Jesse Eisinger, castigates the agency’s previous leaders for saying that they wanted to “push the envelope” on consumer protection enforcement.
Simply put: that is what is going to be different. In fact, that entire governing philosophy of pushing the envelope frightens me a little. I would hope it would bother you as well.
We are government employees. We don’t just work for the government, we work for the people. And that means everyone: 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. 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 that Lady Justice wears a blindfold and carries a balance, along with her sword.
The mind reels. It should go without saying that the Consumer Financial Protection Bureau was designed to protect consumers. It’s in the friggin’ name. The agency exists in order to aggressively crack down on wrongdoing by financial institutions that were left to bilk ordinary households more or less freely for years. Its whole institutional structure is designed to insulate the agency from the interference of political hacks in Congress who would try to make it go easy on industry lawbreakers. Unfortunately, one of those hacks now runs it.
Regulators do not work for the companies they regulate any more than police work for the suspects they investigate; they owe businesses their rights, and nothing more. When a former CFPB official told Politico that regulators at the agency tried to “push the envelope,” he wasn’t talking about stretching the law or targeting innocent lenders. He was referring to the bureau’s decision to fine major Wall Street banks as its first major action, in order to show that it wasn’t afraid to tangle with powerful opponents. That is exactly what the agency was created to do. And it’s what Mulvaney very obviously will not.