CFPB Acting Director Tells House Committee the Bureau will Continue to Execute the Law

Members of the House Financial Services Committee focused on regulation by enforcement, rulemaking, the CFPB’s budget and more in their questions for Acting Director Mick Mulvaney. He will testify before the Senate Committee on Banking, Housing and Urban Affairs Thursday.

4/11/2018 4:00 PM

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CFPB Acting Director Tells House Committee the Bureau will Continue to Execute the Law

Accountability, power and the Consumer Financial Protection Bureau’s approach to enforcement actions dominated discussions Thursday during Acting Director Mick Mulvaney’s testimony before the House Financial Services Committee.

“The CFPB is unaccountable to the president because the director can only be removed for cause. The CFPB is unaccountable to Congress because it determines its own funding stream,” Committee Chairman U.S. Rep. Jeb Hensarling, R-Texas, said in his opening statement.

Mulvaney, a former member of the committee, testified that “the bureau in not designed structurally to be accountable.”

Mulvaney stressed that the bureau would continue to execute the law under his leadership while it focuses on enforcement and rulemaking. He supports bringing the CFPB budget under Congressional appropriations and has consistently stated that the CFPB has too much unchecked power.

“Undoubtedly, many members of Congress disagree with my actions as the acting director of the bureau, just as many members disagreed with the actions of my predecessor,” Mulvaney said in his prepared testimony. “Such continued frustration with the bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and Republican principles has occurred.”

Mulvaney, the keynote speaker at ACA International’s Washington Insights Conference May 21-23, presented a semiannual report with recommendations in line with previous legislative proposals focused on accountability and leadership structure changes at the CFPB.

“Shortly after President Trump appointed me as acting director of the bureau, I announced that the bureau would continue to execute the law but would no longer go beyond its statutory mandate,” Mulvaney said in his prepared testimony.

His semiannual report  recommends that Congress make several changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act as a means to “establish meaningful accountability” at the bureau.

The recommendations include:

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.

U.S. Rep. Blaine Luetkemeyer, R-Mo., also slated to speak at ACA International’s Washington Insights Conference, asked about Mulvaney’s approach to stop regulation by enforcement at the CFPB.

“The mountain of rules coming out [of] the bureau under your predecessor crippled financial institutions seeking to serve their communities. The uncertainty surrounding those rules paired with the apparent desire to regulate through enforcement has had a chilling effect on financial services companies across the nation,” Luetkemeyer said.

Mulvaney assured the committee the CFPB “is still going after bad actors” and continuing investigations and litigation of cases initiated during Corday’s tenure. He said the bureau is “actively litigating” 25 cases.

“We are enforcing the law … I could today, if I wanted to, dismiss every single one of those 25 pieces of litigation. And we have chosen not to do that, we are still enforcing the law, we are just doing it differently,” Mulvaney said.

He added the bureau is trying to focus more on “formal rulemaking … It’s hard to do rules, but it’s the right away to regulate to follow the Administrative Procedures Act to go through the appropriate steps to do that. We’re trying to simply go a little bit more by the book.”

He noted that regulation by enforcement has ceased.

The CFPB also continues to focus on the use and publication of data, including through its consumer complaint database, under Mulvaney’s leadership.

Earlier this year, Mulvaney said the CFPB is halting its collection of personal information, such as through the consumer complaint database.

“This is an important issue and I applaud the bureau for taking it up,” U.S. Rep. Keith Rothfus, R-Pa., another scheduled speaker at the Washington Insights Conference. “I am concerned about consumer privacy and the potential for consumer complaints to be misterpreted or misused. This information could be a helpful public resource if published correctly but it could also mislead the public if not properly handled.”

The CFPB released a Request for Information April 11 seeking feedback on the handling of consumer complaints and inquiries.

The committee also focused on reform of the bureau and past proposals to bring its budget under the Congressional appropriations.

“There is a desperate need for a fundamental overhaul of the structure of this agency to make it much more accountable,” said U.S. Rep. Andy Barr, R-Ky., an additional speaker at the Washington Insights Conference.

Mulvaney will face another round of questions as acting director of the CFPB in testimony before the Senate Committee on Banking, Housing and Urban Affairs at 10 a.m. Eastern Thursday.

His tenure as acting director will last until June 22 unless President Donald Trump nominates a permanent director before that date. If there is a nominee, Mulvaney will remain in his role until the Senate confirmation is complete. He also serves as the director of the Office of Management and Budget.

ACA International’s Washington Insights Conference will take place May 21-23 at The Madison Washington D.C. Registration is open.

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