Our view: Foxes arrive at the consumer protection henhouse
When two competing “acting directors” showed up for work this week to lead the federal government’s Consumer Financial Protection Bureau (CFPB) — one an Obama administration holdover, the other named by President Trump — it was not only a bizarre moment but proof of how desperately Republicans want to defang the agency.
The CFPB, created in 2010, is the first federal agency to focus on protecting people from the excesses and scams of banks, credit card issuers, debt collectors and other financial players.
GOP lawmakers — and their generous campaign donors from the financial industry — have been cringing since the bureau’s inception at every bold move the agency made under director Richard Cordray, who resigned last week.
Cordray named a longtime bureau employee to be his successor, using authority granted in the Dodd-Frank Act that created the bureau. Within hours, President Trump appointed his own pick for the temporary job, Mick Mulvaney, setting up Tuesday’s showdown in federal court.
U.S. District Judge Timothy Kelly refused to block Mulvaney’s appointment, finding that “denying the president’s authority ... raises significant constitutional questions.” With that, the consumer bureau moved immediately into the Trump era.
Mulvaney is an odd choice by the president because he already has a demanding full-time job running the Office of Management and Budget and has said the agency he’s been named to run is a “sick, sad” joke.
Leandra English, Cordray’s choice, is likely to press the issue. But whatever the ultimate outcome, the real issue is whether consumers end up with much protection against financial abuses.
Trump has made his views clear, tweeting that under Cordray the bu- reau was “a total disaster.” Well, maybe it was — for the institutions whose misdeeds were exposed and punished. The bureau’s efforts included:
Collecting $11.7 billion in relief for more than 27 million consumers in actions against credit card companies for abusive practices, banks for charging erroneous overdraft fees and mortgage companies for wrongful disclosures.
Fining Wells Fargo $100 million for setting up unwanted accounts for unsuspecting customers who knew nothing about what was going on.
Creating a consumer-friendly website to investigate and resolve problems, as well as making complaints public so consumers could avoid poorly performing institutions.
One ploy the industry and its allies in Congress have been promoting is to turn the bureau into a commission. This might sound benign, but the Senate can too easily stymie a commission’s work by creating partisan gridlock or leaving so many vacancies that the panel can’t function.
With Mulvaney winning the first round in court and Trump in position to nominate a new director, efforts to undermine this strong consumer champion are well underway.