Mulvaney Explains Major Policy Changes at CFPB to Divided HFS Committee

Apr 12, 2018 | News

On April 11th, the House Financial Services Committee (HFS) brought the Consumer Financial Protection Bureau’s (CFPB) acting director, Mick Mulvaney, to testify about the agency’s recently published semi-annual report. The hearing was as contentious as previous installments with Mulvaney’s predecessor, Richard Cordray, although roles were reversed as committee Republicans now showed unequivocal support and adoration for current Bureau leadership.


However, Mulvaney’s welcome from House Democrats was met with much less adulation. Ranking committee member Maxine Waters (D- CA) began her time by proclaiming Mulvaney was not the lawful acting director of the agency, expressing her support for Deputy Director Leandra English’s legal challenge to Mulvaney’s appointment by President Trump.


In contrast, Republicans tended to praise Mulvaney’s new approach to agency management. Mulvaney touted this approach, adding that he wanted to bring transparency to what he characterized as an “unaccountable” bureaucracy. To quell fears expressed by Rep. Waters about the independence of the CFPB, Mulvaney reassured her that accountability and independence did not have to be mutually exclusive. When Rep. Waters cornered Mulvaney about concerns he was destroying the agency, he responded that he has not “burned the place down.”


One topic consistent throughout the hearing was the CFPB’s enforcement efforts. Committee Democrats pointed to the fact that Mulvaney had yet to initiate a single enforcement action since taking over the agency in November. Mulvaney retorted by explaining the Bureau was progressing around 100 investigations and pursuing about 25 actions in court. Rep. Huizenga (R- MI) noted that former Director Cordray also did not bring any enforcement actions his first 6 months on the job.


Related to enforcement, Rep. Rothfus (R- PA) questioned Mulvaney on the CFPB’s powerful enforcement standard, Unfair, Deceptive, and Abusive Acts and Practices (UDAAP). Mulvaney lamented that UDAAP, in particular the abusive standard, was very subjective and needed Congressional clarification and guidance. The CFPB’s use of UDAAP has been an issue for tribal lenders in the past when the agency attempted to utilize the enforcement standard to harm tribal sovereignty.


Mulvaney is not done speaking to Congress. He is scheduled to also speak with the Senate Banking Committee on April 12th. Mulvaney has been at odds in recent weeks with the CFPB’s founder, Senator Elizabeth Warren (D- MA). She sent a letter to Mulvaney last month demanding answers to more than 100 questions about his activity at the agency. At his House hearing, Mulvaney seemingly set the stage for his showdown with Sen. Warren by informing the committee he is not statutorily obligated to answer any questions from Congress, but must only appear at the hearings.

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