CFPB changes subverting bureau’s original intent

From the moment Congress created the Consumer Financial Protection Bureau, Republicans attacked it as a “rogue agency,” “unaccountable,” “malicious” and run by an out-ofcontrol “dictator” who needs more oversight. Mick Mulvaney has apparently set out to prove them right.

In November, in a move that set off a power struggle still tied up in the courts, President Trump appointed Mulvaney acting director of the CFPB. He’s running the bureau part time, in addition to his Cabinet-level post as director of the Office of Management and Budget.

Because, hey, it’s not like there’s been a lot going on budget-wise these days.

Miraculously, Mulvaney has found time to show how malicious, rogue and out-ofcontrol an unchecked CFPB director can be. He has perverted the agency’s mandate from protecting the public from scammers and cheats to letting the scammiest, cheatingest companies run roughshod over the public.

Most emblematic of this was changing the CFPB’s mission statement to emphasize its commitment to deregulation. Which — huh? The bureau was created as an independent agency after the financial crisis and was dedicated to helping consumers fight back when financial institutions rip them off. In its first five years, it provided $11.7 billion in relief for more than 27 million harmed consumers. In addition to enforcing the law already on the books, it passed new rules and regulations to protect consumers.

Accordingly, bureau releases used to describe it as “a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.” Around Christmas, this changed. Most of that original language remains. But now the first example the statement offers to illustrate how the bureau “helps consumer finance markets work” is “regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations.”

The agency has begun revisiting or delaying new regulations. It has also pulled back from enforcing existing laws and regulations.

Earlier this month, without explanation, the bureau withdrew a lawsuit against a group of online payday lenders that were charging interest rates as high as 950 percent. These loans were not just expensive and predatory; they were also, according to the original lawsuit, illegal under many states’ laws and therefore void.

Then the bureau dropped an investigation into an installment lender that was a subject of a ProPublica series documenting questionable lending practices.

Coincidentally, that same company, World Acceptance Corp., donated thousands to Mulvaney’s own congressional campaigns. The bureau said the determination to drop the probe was made by career staff and that “any suggestion that Acting Director Mulvaney had any role in the decision is simply inaccurate.”

Other investigations may have been shelved, too, though we don’t know how many, because the CFPB is not required to disclose when it opens or closes an investigation. We only know about the World Acceptance Corp. case because the company announced it to shareholders.

When he was a congressman, Mulvaney co-sponsored a bill to eliminate the bureau, making him at least the second Trump appointee to run an agency or department the appointee previously suggested should not exist. He lacks the power to kill the agency, but he has nonetheless managed to put his money where his mouth is.

Literally. Last week, Mulvaney told the Federal Reserve the bureau deserved zero dollars in the second quarter and pledged to draw down its emergency reserves instead.

Mulvaney recently released a letter to CFPB staffers — a version of which was also published in the Wall Street Journal — explaining the philosophy behind all these changes.

“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,” he wrote in the memo. You know what? That’s bogus. The CFPB was designed to defend defenseless consumers, not business interests. “Consumer” is literally in its name. There are plenty of entities, both within and outside the government, that seek to balance interests of public and industry participants. The CFPB is not among them.

But forget that. It’s not clear why looking the other way when companies cheat customers is good for the business community, either.

All this does it disadvantage companies that play by the rules. If your business model is to be more deceptive than your competitors, maybe the economy doesn’t need you at all.