Mulvaney Lays Out Agency Overhaul in CFPB Semi-Annual Report

Keeping in line with recent efforts to revamp the Consumer Financial Protection Bureau (CFPB), Acting CFPB Director Mick Mulvaney turned a new corner for the consumer agency with his first semi-annual report to Congress. In a press release accompanying the report, Mulvaney noted:

“The Bureau is far too powerful, with precious little oversight of its activities. The power wielded by the Director of the Bureau could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets. I’m requesting that Congress make four changes to the law to establish meaningful accountability for the Bureau. I look forward to discussing these changes with Congressional members.”

The report itself contained overviews of complaints made to the CFPB during the period of April 1, 2017 to September 30, 2017. Similar to previous reports, debt collection dominated consumer complaints, comprising 27% of consumer concerns voiced to the agency.

However, it was Mulvaney’s introductory letter that has drawn both interest and ire in the financial services industry and media. In his letter, Mulvaney recommends four changes to the CFPB as part of his mandate under the Dodd-Frank Act to “submit independent legislative recommendations to Congress.”

In prefacing his recommendations to Congress, Mulvaney relied upon founding father James Madison in expressing concern that the CFPB has too much power with far too little oversight. He described the CFPB director as “a one-man legislature empowered to bind parties in new ways; as an executive officer subject to limited control by the President; and as an appellate judge presiding over the Bureau’s in-house court-like adjudications.”

To remedy the unchecked authority of the Bureau, Mulvaney asked Congress to pass laws that would:

1. Fund the Bureau through Congressional appropriations;
2. Require legislative approval of major Bureau rules;
3. Ensure that the director answers to the President in the exercise of executive authority; and
4. Create an independent Inspector General for the Bureau.

Of his recommendations, members of the House and Senate have already introduced bills this session to give the CFPB its own Inspector General, bring the Bureau under Congressional appropriations, and allow the President to fire the CFPB Director at will. Mulvaney is scheduled to testify before the House Financial Services Committee regarding the semi-annual report on April 11th.