Manuel Balce Ceneta/AP
An epic throw-down is underway on Capitol Hill over the role of the federal government. The topic: The Consumer Financial Protection Bureau, the agency created in the wake of the financial crisis.
On one side is the Trump administration’s interim director, Mick Mulvaney, who believes the bureau’s powers are excessive and unchecked. On the other is Sen. Elizabeth Warren, D-Mass., who led the creation of the bureau to protect consumers from abuses by banks.
Mulvaney, Trump’s appointee, calls the bureau Warren’s “baby.” But Democrats say over the past five months he’s done a terrible
Back when he was a Republican congressman, Mulvaney sponsored legislation to abolish the bureau and called it a “sick, sad” joke.
Mulvaney is facing off against Warren on Thursday at the Senate Banking Committee, part of his mandated semi-annual report to Congress on the activities of the CFPB.
It’s the second of back-to-back sessions for Mulvaney.
In a House hearing Wednesday, New York Democrat Carolyn Maloney said the bureau used to bring several enforcement actions a month against financial companies. In doing so it returned $12 billion to consumers who had been harmed. She pressed Mulvaney:
Maloney: “So let me ask you how many enforcement actions has the bureau initiated since you took over?”
Mulvaney: “We have initiated none since I’ve been there.”
Maloney: “So it’s zero.”
Mulvaney said he’s bringing a less aggressive approach. His vision for the CFPB is one that’s run with more humility and prudence. Maloney asked him, “Does your new approach involve bringing any actual enforcement actions?”
He countered that there were 100 active investigations and 25 ongoing lawsuits, though he acknowledged that the suits were initiated under the previous Obama-era director.
Mulvaney insisted he is enforcing the law.
Democrats and consumer advocates say that would put the consumer watchdog agency on a very short leash. In the wake of the financial crisis, Warren and others designed the bureau to be a strong, independent agency to protect consumers. It is funded by the Federal Reserve instead of by Congress, a move designed to shield it from political influence. But many Republicans argue the bureau’s power is unchecked.
“So powerful is the CFPB director that he alone has been granted the unprecedented power to declare any mortgage credit card or bank account unfair or abusive at which point Americans can’t have them,” said Rep. Jeb Hensarling, R-Texas.
Under Mulvaney’s watch, the CFPB has dropped an investigation into a payday lender and announced that it will reconsider a rule to put stricter limits on companies that make high-interest, short-term loans. Consumer groups point to campaign contributions Mulvaney received from payday lenders when he was in Congress and say he’s now doing the industry’s bidding. Mulvaney has said the campaign contributions do not constitute a conflict of interest.