Budget director one of the most powerful bureaucrats in US
BY MANY measures, Mick Mulvaney is one of the most powerful bureaucrats in the country.
The White House budget director is, for now, also the acting director of a powerful financial regulator, the Consumer Financial Protection Bureau. At the CFPB, he can single-handedly cut the agency’s budget and decide whether to proceed with or drop investigations into big financial firms.
He also gains a seat on a key regulatory panel that oversees the world’s largest financial institutions, called the Financial Stability Oversight Council, alongside Treasury Secretary Steven Mnuchin and Federal Reserve Chair Janet L. Yellen.
It is a job, a federal judge once said, that “enjoys more unilateral authority than any other officer in any of the three branches of the US Government, other than the President.”
Mulvaney’s ability to wear both hats - director of the Office of Management and Budget and acting head of the CFPB - is one of the thorniest legal issues remaining in the battle for control of the consumer watchdog.
As OMB director, he’s currently in the middle of efforts to broker a budget deal with Capitol Hill to avoid a partial government shutdown.
“You can’t do both, have a political job at the White House and be an independent regulator,” said Ed Mierzwinski, a senior fellow at US PIRG, a public interest group, and director of its consumer programme. “He would have to have a firewall in his head.”
The White House dismissed such concerns.
“He is serving as the law says. He can wear both hats because the law says he can,” said John Czwartacki, a spokesman for Mulvaney. “You can do both roles.”
Trump appointed Mulvaney to the temporary post last week after the agency’s former director, Richard Cordray, announced he was stepping down. But by then, Cordray had already named his former chief of staff, Leandra English, as acting director, setting up a legal battle that both sides acknowledge could linger for weeks or months.
The fight has revived questions about the power and structure of the CFPB.
The agency was established in 2011 in the wake of the global financial crisis to serve as a watchdog for consumers against their banks, mortgage and credit card companies and other financial institutions.
To stand up to those powerful interests, law makers gave the agency several measures of independence, including that it is run by a single director rather than a board or commission.
The director serves a five-year term and can only be fired by the president for cause, not simply if he just wants to make a change. Any new permanent director must be confirmed by the Senate. The agency is also funded through the Federal Reserve rather than congressional appropriations.
“I’m learning about the powers I have as acting director. They would frighten most of you how little oversight Congress has over me,” Mulvaney told reporters last Monday, his first day in the office.
The agency’s independence has been a matter of contention in the courts.
In 2015, the CFPB fined PHH Mortgage US$ 109 million ( RM469 million) for allegedly giving kickbacks to mortgage insurers in exchange for customer referrals.
The New Jersey company sued, saying the penalty showed the agency had too much unchecked authority.
Last year, a federal appeals sided with PHH and called the structure of the agency “unconstitutional.” That ruling was later vacated and the matter is now before the US Court of Appeals for the District of Columbia Circuit. — WPBloomberg