Mulvaney Backs Turning CFPB Into Bipartisan Commission

April 11, 2018

Mick Mulvaney, a longtime CFPB critic who has taken steps to overhaul the bureau since assuming his post in November, said moving to a bipartisan commission from a single director would prevent “wild swings” in rules and policies that accompany changes in administrations.

“We need to have a more down-the-middle approach,” Mr. Mulvaney said while giving a semiannual report on the CFPB before the House Financial Services Committee. He was a Republican member of the panel before joining the Trump administration.

As a House member, Mr. Mulvaney voted for multiple bills calling to turn the CFPB into a commission. Asked by Rep. Randy Hultgren (R., Ill.) if he still believed a commission provides “greater certainty to market participants and consumers,” Mr. Mulvaney said: “I still believe that and I was a co-sponsor of that bill when I was here,” referring to one of the measures introduced over the years.

While an Obama appointee was leading the agency, Republican lawmakers had pushed for a CFPB commission similar to the Federal Trade Commission or the Securities and Exchange Commission, saying that the CFPB’s director had too much power. But as their party took control of the White House and Mr. Mulvaney was installed as interim chief, most Republican lawmakers lost interest in the commission idea—including Rep. Jeb Hensarling of Texas, the House financial panel’s influential chairman.

In contrast, calls for a commission have grown from financial-industry executives in recent months, as they grew wary of the sharp policy shifts after the administration change, as well as a partisan fight over the CFPB’s leadership.

“What we are witnessing at the CFPB since November is a pure donnybrook,” said Richard Hunt, president of the Consumer Bankers Association, a trade group. “What the banking industry yearns for is certainty and stability. That’s why we have been pushing for the commission at the CFPB.”

Last week, more than 20 trade groups signed a letter expressing support for the latest House bill calling for a bipartisan commission. The bill has four co-sponsors from both parties but its prospects for becoming a law are slim due to a lack of support. Legislation recently passed by the Senate that calls for rolling back some postcrisis financial regulations doesn’t include any significant steps to restructure the CFPB. The House is expected to pass the bill within the next few months.

Mr. Mulvaney is slated to appear Thursday before the Senate Banking Committee, where he faces Sen. Elizabeth Warren (D., Mass), the key architect of the CFPB and a leading critic of Mr. Mulvaney.

At Wednesday’s session, Republicans and Democrats offered starkly different assessments of Mr. Mulvaney’s performance.

House Democrats were sharply critical of his tenure and focused on his retrenchment from enforcement actions. After bringing dozens of cases annually under Richard Cordray, the Obama-appointed former director, the CFPB hasn’t filed a single enforcement action since Mr. Mulvaney took over.

While acknowledging that he hasn’t initiated any new actions, Mr. Mulvaney stressed that the agency’s enforcement and supervisory work continues, saying that it is investigating roughly 100 cases and continues to fight 25 lawsuits in court, cases inherited from the previous leadership. “We are still going after bad actors,” he said.

He declined to comment on the status of two of the most significant cases initiated by his predecessor, against Wells Fargo & Co. and Equifax Inc.

“I am very concerned about Mr. Mulvaney’s actions,” said Rep. Maxine Waters of California, the highest-ranking Democrat on the House committee. “He has taken a series of actions that weaken the agency’s ability to carry out its important mission and benefit the predatory actors that the agency is designed to police. “

She and a few other Democrats started their questions by stating they believed the appointment of Mr. Mulvaney by President Donald Trump was illegal. Leandra English, a Cordray-appointed deputy director of the CFPB, has sued, saying she is the legitimate acting director.

Republicans, meanwhile, extended a warm welcome to Mr. Mulvaney, their former colleague.

“While the bureau retains all of these unbridled powers and remains unaccountable under Acting Director Mulvaney, there is one distinction: Director Cordray often acted unlawfully; Acting Director Mulvaney acts lawfully. What a welcome change,” said Jeb Hensarling (R. Texas), the chairman of the committee.

Throughout the session, Mr. Mulvaney emphasized his efforts to overhaul the agency to bring more “transparency and accountability” to consumers and the businesses that serve them. He urged lawmakers to take legislative action to give Congress authority to approve the bureau’s budget and give the president the power to remove the CFPB director at will.

“The bureau screams out to be reformed,” Mr. Mulvaney said. “There are better ways to protect consumers than what we are doing today.”