Has Mulvaney Gone Too Far? A Look at the CFPB’s Semi Annual Report to Congress

The CFPB has issued its semi-annual report to Congress, leaving little doubt as to the agenda of Acting Director, Mick Mulvaney.  While the information contained in the actual report is largely inconsequential, it is Mulvaney’s opening message which should raise eyebrows of both consumer advocates and the consumer financial service industry.  Mulvaney quotes the Federalist Papers and draws on James Madison’s definition of tyranny when describing the CFPB’s Director (an accumulation of all powers, legislative, executive and judiciary in the same hands).  While scathingly describing the position he currently holds, Mulvaney blames Congress for creating an agency “primed to ignore due process and abandon the rules of law in favor of bureaucratic fiat and administrative absolutism.”    Citing the Bureau’s lack of accountability to any branch of government, Mulvaney includes a request that Congress amend Dodd Frank to:

• Fund the Bureau through Congressional appropriations
• Require legislative approval of major Bureau rules;
• Ensure the Director is answerable to the President in the exercise of executive authority; and
• Create an independent Inspector General for the Bureau.

By footnote, Mulvaney notes that the legislative proposals are his own and that no other officer or agency approved the legislative recommendations prior to submission.  Mulvaney is scheduled to appear before the House Financial Services Committee this week.

The proposal and the positions being advocated by Mulvaney should be of concern for both consumer advocates and the consumer financial services industry – particularly the second proposal.  Requiring legislative approval of all major Bureau rules essentially defeats the purpose of an agency delegated with rule making abilities if all such rules are to be subject to Congressional approval.  The debt collection industry, particularly, is clamoring for clarity as to how a statute adopted in the 1970s should be applied with today’s technology.  Agency rulemaking without the requirement of Congressional approval is a much more efficient means to provide that clarity if the positions of all stakeholders are fairly considered

Moving to the actual report itself, there is very little to report except that it acknowledges that the CFPB is still working towards a release of a proposed rules concerning debt collection.  Interestingly, it appears that the CFPB is now narrowing its debt collection focus to communication procedures and consumer disclosures and moving away from some of the other proposals contained in the original proposal. 

For those wondering, Mulvaney’s term as acting director is for 210 days but can be renewed and/or extended should Trump make a nomination for a permanent director prior to the expiration of that term.