Chief asks Congress to weaken its powers
WASHINGTON — Since taking control of the Consumer Financial Protection Bureau last year, Mick Mulvaney has not shied away from controversy.
He has launched a top-to-bottom review of the watchdog agency’s operations and rolled back cases against payday lenders, drawing heavy criticism from Democrats and consumer advocates. Mulvaney has even joked about the angst his position at the top of the consumer watchdog has caused Sen. Elizabeth Warren, D-Mass., who helped establish the agency.
“Despite what you might have read, I’m pretty sure that I’m not the devil,” Mulvaney told a group of state attorneys general last month. “So all the stuff that you’ve read about me and the CFPB, I urge you to take with a grain of salt — except the part about me keeping Elizabeth Warren up at night.”
On Monday, Mulvaney took his efforts further, proposing several measures that would curtail the CFPB’s independence and power. Major CFPB rules should receive congressional approval and the bureau’s budget should be set by lawmakers rather than allocations from the Federal Reserve, Mulvaney said in the bureau’s semiannual report to Congress.
“The Bureau is far too powerful, with precious little oversight of its activities,” Mulvaney said in the report. “The power wielded by the Director of the Bureau could all too easily be used to harm consumers ... or arbitrarily remake American financial markets.”
The proposals immediately drew rebuke from the watchdog’s defenders and are likely to increase scrutiny of Mulvaney’s tenure as the agency’s acting director. Mulvaney is scheduled to testify before the House and Senate next week.
“Requiring legislative approval of major bureau rules would drag consumer protection law deeper into congressional gridlock and political games,” said Christopher Peterson, a professor at the University of Utah law school and a former bureau adviser. “Instead of using the CFPB as a political football, the CFPB leadership should focus on ensuring consumer financial products are safe, affordable, and transparent.”
The independent structure of the bureau has long been at the center of a fierce partisan debate over the agency, which was created during the Obama administration in response to the global financial crisis. The CFPB, for example, is ruled by a single director rather than a multi-member commission and the director can only be fired by the president for cause. Mulvaney also recommended allowing the president to fire the agency’s director at will.
“I have no doubt that many Members of Congress disagree with my actions as the Acting Director of the Bureau, just as many Members disagreed with the actions of my predecessor,” Mulvaney wrote. “Such continued frustration with the Bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred.”
Mulvaney’s proposals mimic measures already passed in the House but are not likely to make their way through the Senate.
The agency has been caught in a legal tug-of-war over its leadership since late last year, when the agency’s longtime director, Richard Cordray, stepped down and named his former chief of staff, Leandra English, acting director. But just hours later, the White House appointed Mulvaney, the director of the Office of Management and Budget, to the job. English is contesting Mulvaney’s position in court.