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February 5, 2018

Instead of “Pushing the Envelope,” CFPB Acting Director Mulvaney is Mailing It In

Last week, CFPB Acting Director Mick Mulvaney issued a new mission statement to the CFPB staff outlining his vision for the agency.

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.

Instead, he said the CFPB – the Consumer Financial Protection Bureau — works 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, andthose who sell them.”  He’s essentially reading “consumer” out of consumer protection and putting in everyone, including those who are ripping off consumers!

Given that the CFPB is the only cop protecting consumers on the Wall Street beat, 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 rip-offs)?”  We detailed the answer to that question in an Op Ed, but here’s a few of his likely 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 investigating them.

He’d likely take other steps (see the Op Ed here), but the last point is really important.  Now, you might say, don’t be ridiculous.  No one would ask the people they are investigating for wrongdoing to tell them how to conduct the investigation.  However, that is exactly what acting director Mulvaney did last week: he asked for input from the “public,” which is overwhelmingly the industry, about how the CFPB should use its investigative powers.  In essence, he is asking the industry how the CFPB should police them.  That’s as naked a tell as can be.

But what acting director Mulvaney most wants the CFPB staff to remember is that, 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.

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