WASHINGTON — The Consumer Financial Protection Bureau will let states more often take the lead on enforcing consumer protection laws, acting Director Mick Mulvaney said during an attorneys general conference on Wednesday.

Mulvaney said the CFPB would no longer be “pushing the envelope” or “look to create law where there isn’t” through enforcement actions. His remarks were in response to criticism of the prior leadership at the CFPB, which under Richard Cordray was often accused of using enforcement actions to set new policy. Some of those actions were the subject of lawsuits that the CFPB lost.

“I was shocked when I read through some of the factual allegations of some of the lawsuits that we had brought at the CFPB,” Mulvaney said. “We are going to be looking to the state regulators and state attorneys general for a lot more leadership when it comes to enforcement.”

Acting CFPB Director Mick Mulvaney
“Despite what you might have read, I’m pretty sure that I’m not the devil,” said acting CFPB Director Mick Mulvaney. Bloomberg News

Mulvaney recently dropped a lawsuit in which former CFPB Director Richard Cordray sued four online tribal lenders in 2017 over allegations of illegally collecting debt in 17 states.
He said he dropped the case because two state attorneys general in those jurisdictions filed briefs against the CFPB’s decision.

“Why we think we know better or how to protect consumers in your state surprises me,” he said. “I don’t think we’ll being do much of that anymore.”

Mulvaney said the CFPB would instead spend more time on cost-benefit analysis and take a more “quantitative” perspective on where they place priorities. For example, he said the most consumer complaints they receive are for debt collection. Only 2% of the complaints were related to payday-type loans last year, an area where the CFPB had sought to crack down.

“That should instruct us on where we should be spending our priorities” first, he said.

Mulvaney also emphasized that the CFPB would put more resources toward educating consumers on their financial protections rather than targeting firms through enforcement.

“Statutorily, we are supposed to not only protect consumers and enforce consumer protection law, but were also supposed to educate them,” he said. “And if people are still doing these things, then we are not doing a very good job of educating them.”

Mulvaney’s comments received some pushback from Iowa State Attorney General Tom Miller, who cautioned that enforcement “is a lot more effective in dealing with consumer abuse” than education.

“Education is an enormous challenge and we want to be involved in education, and you do too,” Miller said. “But it is very difficult to educate enough people to make enough difference.”

Miller, a Democrat, also said he was concerned that if the CFPB focuses on areas with the most consumer complaints, it could miss some very “serious complaints” that do not appear as often but are just as important. Mulvaney agreed.

“I’m not saying we won’t look at it,” he said. “I’m simply saying that’s a filter that we will use to prioritize our efforts.”

Mulvaney was broadly welcomed as a newcomer to the conference at which Cordray previously has appeared, both as the CFPB's director and a former attorney general of Ohio.

Mulvaney spoke off-script, joking about recently being called “the devil,” and for the second day in a row he made light of letters from Sen. Elizabeth Warren, D-Mass., criticizing changes he's made at the CFPB.

“Despite what you might have read, I’m pretty sure that I’m not the devil,” he said. “So all the stuff that you’ve read about me and the CFPB, I urge you to take with a grain of salt, except the part about me keeping Elizabeth Warren up at night.”