Mick Mulvaney, controversy magnet
April 29, 2018 9:45 PM
Andrew Harrer/Bloomberg
It's hard to know if acting Consumer Financial Protection Bureau Mick Mulvaney is purposely seeking to spark outrage or simply doesn't care if his words or actions stir it up.
But since taking office in late November 2016, Mulvaney has moved from one controversy to the next. Just last week, he generated several in a single speech. In that way, he is like his boss, President Trump, who lurches from crisis to crisis. And like Trump, there's little evidence that Mulvaney is worried about the dust he kicks up.
Yet all press is not necessarily good press, and Mulvaney's most recent actions are likely to haunt him. At the very least, he's provided Democrats with more ammunition in their battle against him.
Following is a look at where Mulvaney has gotten into trouble.
But since taking office in late November 2016, Mulvaney has moved from one controversy to the next. Just last week, he generated several in a single speech. In that way, he is like his boss, President Trump, who lurches from crisis to crisis. And like Trump, there's little evidence that Mulvaney is worried about the dust he kicks up.
Yet all press is not necessarily good press, and Mulvaney's most recent actions are likely to haunt him. At the very least, he's provided Democrats with more ammunition in their battle against him.
Following is a look at where Mulvaney has gotten into trouble.
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Pay to play?
Mulvaney's most recent gaffe came Tuesday, when he told the American Bankers Association that "we had a hierarchy in my office in Congress" when he was a South Carolina congressman.
"If you were a lobbyist who never gave us money, I didn’t talk to you,” he said. “If you were a lobbyist who gave us money, I might talk to you. If you came from back home and sat in my lobby, I talked to you without exception — regardless of the financial contributions.”
To those in the room, the comments appeared to be a joke, part of Mulvaney's larger point that the best way to lobby Congress isn't actually money, but galvanizing people in local districts. But the comments were not seen that way by the media at large.
Instead, they were seen as proof that Washington is a "pay to play" town. Many seized on them to argue that Mulvaney acknowledged his own corruption, with Sen. Sherrod Brown, D-Ohio, calling on Mulvaney to resign.
Sen. Elizabeth Warren, D-Mass., used the comments as a basis of a letter to the CFPB's top ethics official asking what kind of protections are in place to ensure Mulvaney does not favor those who gave him donations in the past.
Whatever Mulvaney's intent, the comments were an unforced error on his part, providing his critics with a new line of attack.
"If you were a lobbyist who never gave us money, I didn’t talk to you,” he said. “If you were a lobbyist who gave us money, I might talk to you. If you came from back home and sat in my lobby, I talked to you without exception — regardless of the financial contributions.”
To those in the room, the comments appeared to be a joke, part of Mulvaney's larger point that the best way to lobby Congress isn't actually money, but galvanizing people in local districts. But the comments were not seen that way by the media at large.
Instead, they were seen as proof that Washington is a "pay to play" town. Many seized on them to argue that Mulvaney acknowledged his own corruption, with Sen. Sherrod Brown, D-Ohio, calling on Mulvaney to resign.
Sen. Elizabeth Warren, D-Mass.,
Whatever Mulvaney's intent, the comments were an unforced error on his part, providing his critics with a new line of attack.
What's in a name?
Almost lost in the storm over his comments about lobbyists, Mulvaney also made news by suggesting that the CFPB should instead be called the Bureau of Consumer Financial Protection, or BCFP.
The name changehas been a concern for Mulvaney for a few months, reaching a crescendo when he unveiled a new seal for the "BCFP" earlier this year. His rationale for the change is that is how the agency is referred to in the Dodd-Frank Act, which created the bureau. (It's worth noting that the law also refers to the agency as the CFPB, however.)
Mulvaney has gone so far as to request the Associated Press change its stylebook to reflect the new name. Banking groups, meanwhile, have taken up the call, with the Consumer Bankers Association issuing a press release on Friday referring to the BCFP.
The name change
Mulvaney has gone so far as to request the Associated Press change its stylebook to reflect the new name. Banking groups, meanwhile, have taken up the call, with the Consumer Bankers Association issuing a press release on Friday referring to the BCFP.
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Dropping public complaints
During the same remarks to the ABA, Mulvaney also strongly hinted that the CFPB would soon no longer make complaints against financial firms public.
Mulvaney noted that by law, the CFPB is required to keep a complaint database. But that does not mean it needs to be freely available to others. “I don’t see anything in here that I have to run a Yelp for financial services sponsored by the federal government," he said.
It's no surprise that the news drew rebukes from consumer groups, which argued it would cut off a way to keep firms honest, and praise from banking groups, which have long said that publishing unverified narratives was tantamount to libel.
Mulvaney noted that by law, the CFPB is required to keep a complaint database. But that does not mean it needs to be freely available to others. “I don’t see anything in here that I have to run a Yelp for financial services sponsored by the federal government," he said.
It's no surprise that the news drew rebukes from consumer groups, which argued it would cut off a way to keep firms honest, and praise from banking groups, which have long said that publishing unverified narratives was tantamount to libel.
Gary Tramontina/Bloomberg
Reopening payday lending rule
The CFPB dropped a probe into World Acceptance Corp. earlier this year, prompting an outcry because the payday lender donated at least $4,500 to Mulvaney when he was in office as a congressman.
Mulvaney insisted again last week that he was not involved in the decision, but since he took office, the CFPB has dropped several suits into payday lenders, signaling a more tolerant view of such companies,matching Mulvaney's own outlook on payday lending.
Most important, Mulvaney has pulled back the CFPB's rule, finalized in October of last year, that would rein in small-dollar loans. He delayed implementation of the rule, promising to take a second look at its requirements.
Mulvaney insisted again last week that he was not involved in the decision, but since he took office, the CFPB has dropped several suits into payday lenders, signaling a more tolerant view of such companies,
Most important, Mulvaney has pulled back the CFPB's rule, finalized in October of last year, that would rein in small-dollar loans. He delayed implementation of the rule, promising to take a second look at its requirements.
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Data collection halt
Roughly a month after taking office, Mulvaney shut down the collection of most personally identifiable information from supervised firms, citing cybersecurity concerns.
The movesparked skepticism that Mulvaney's intentions were actually designed to hamstring investigations into firms because examiners often must assess such data to determine if consumers have been harmed. Mulvaney has said the data freeze was necessary to keep the information secure due to recent cybersecurity hacks.
The CFPB began collecting data again a few weeks later, Mulvaney told Congress two weeks ago. The responseraised new questions rather than putting the issue to rest, as cybersecurity experts were baffled by Mulvaney's actions.
"Government agencies all over the country have security problems, but it's not a viable option for most agencies to stop collecting data," said Kirk Nahra, a partner at Wiley Rein. "I can't imagine the Department of Health and Human Services saying we had a security breach last week, so we're going to stop Medicare."
The move
The CFPB began collecting data again a few weeks later, Mulvaney told Congress two weeks ago. The response
"Government agencies all over the country have security problems, but it's not a viable option for most agencies to stop collecting data," said Kirk Nahra, a partner at Wiley Rein. "I can't imagine the Department of Health and Human Services saying we had a security breach last week, so we're going to stop Medicare."
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Fair-lending office
Mulvaney appeared to effectively demote the CFPB's fair-lending division earlier this year, stripping it of enforcement powers. Consumer groups said the move was a sign the agency would reduce oversight and penalties for firms that discriminate against borrowers.
Previously, the fair-lending office was seen as an equal division alongside supervision and enforcement. It is now part of the office that handles internal agency concerns about employees.
Previously, the fair-lending office was seen as an equal division alongside supervision and enforcement. It is now part of the office that handles internal agency concerns about employees.
Andrew Harrer/Bloomberg
Broad review
Mulvaney has launched a broad review of the entire CFPB , from supervision to consumer complaints to enforcement and beyond.
In a series of proposals, the agency has asked for comment on virtually every aspect of the agency's activities. Mulvaney said it makes sense for a new director to reassess the bureau's activities. But critics see it as a way for Mulvaney to take input selectively in order to reduce the agency's authority in a range of ways.
In a series of proposals, the agency has asked for comment on virtually every aspect of the agency's activities. Mulvaney said it makes sense for a new director to reassess the bureau's activities. But critics see it as a way for Mulvaney to take input selectively in order to reduce the agency's authority in a range of ways.
Andrew Harrer/Bloomberg
Dialing back on abusive
While regulators have long been able to penalize firms for "unfair and deceptive" practices, the Dodd-Frank Act gave the CFPB additional leeway, allowing it to also pursue "abusive" practices.
In the CFPB's five-year strategic plan issued in 2013, the bureau's director at the time, Richard Cordray, featured such power prominently in the "vision statement," saying the agency wants to ensure no company could "build a business model around unfair, deceptive of abusive practices."
But the agency'svision statement unveiled as part of the new strategic plan this year dropped any reference to so-called UDAAP claims, suggesting that the agency would not use the Dodd-Frank authority as the same kind of blunt enforcement tool that resulted in scores of fines under Cordray.
In the CFPB's five-year strategic plan issued in 2013, the bureau's director at the time, Richard Cordray, featured such power prominently in the "vision statement," saying the agency wants to ensure no company could "build a business model around unfair, deceptive of abusive practices."
But the agency's
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Zero money for budget
Mulvaney surprised some observers when he requested zero dollars from the Federal Reserve Board for the agency's fiscal 2018 budget.
Mulvaney said the agency didn't need the money to operate, since it had built up $177 million in reserve. Those funds had been set aside by Cordray to use in case of emergency, but Mulvaney didn't see the point.
Like many of his other actions, this was seen by critics as a way to reduce the CFPB's ability to supervise and pursue firms.
Mulvaney said the agency didn't need the money to operate, since it had built up $177 million in reserve. Those funds had been set aside by Cordray to use in case of emergency, but Mulvaney didn't see the point.
Like many of his other actions, this was seen by critics as a way to reduce the CFPB's ability to supervise and pursue firms.
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His leadership of the bureau
Finally, there is the original controversy surrounding Mulvaney — is he the legal director of the agency in the first place?
Mulvaney was appointed by President Trump over Thanksgiving weekend after Cordray named Leandra English as deputy director and abruptly resigned. Cordray's maneuver appeared designed to ensure that English would lead the bureau as acting director while Trump nominated a permanent successor. Cordray and his supporters pointed to language in the Dodd-Frank Act that they said proved the deputy director should be in charge, and that the Federal Vacancies Reform Act, which gives a president broad authority to appoint acting directors of agencies, did not apply.
The battleleft two officials claiming to be the true CFPB director — and that is still technically the case. English has sued the administration claiming she is the rightful acting director. Her suit appears unlikely to succeed, but at the most recent court hearing in mid-April, judges sounded skeptical that either English or Mulvaney were the proper leaders of the bureau. The justices appeared concerned that Mulvaney was too close to the administration to act as the head of an independent agency.
Mulvaney was appointed by President Trump over Thanksgiving weekend after Cordray named Leandra English as deputy director and abruptly resigned. Cordray's maneuver appeared designed to ensure that English would lead the bureau as acting director while Trump nominated a permanent successor. Cordray and his supporters pointed to language in the Dodd-Frank Act that they said proved the deputy director should be in charge, and that the Federal Vacancies Reform Act, which gives a president broad authority to appoint acting directors of agencies, did not apply.
The battle
