CFPB is still in the fair lending business, Mulvaney says

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Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, said Monday that he wanted to set the record straight by reiterating that the agency is “still very much in the fair lending business.”

“Thank you for helping us send the message that we are still doing fair lending, we are still in the fair lending business,” Mulvaney said at a CFPB day-long symposium on consumer access to credit.

The comments came after a move in February in which Mulvaney tried to strip the fair lending office of its enforcement authority, which is mandated by the Dodd-Frank Act.

Mulvaney said that the media misinterpreted what he was trying to do.

“You may have read a bunch of things or seen a bunch of things saying we are out of that business, and nothing could be further from the truth,” Mulvaney said. “I hope that you take this symposium as evidence of that. We are still very much in the fair lending business and we going to remain active in that space.”

The fair lending office is still listed in the CFPB’s organizational chart as an equal division alongside supervision and enforcement. The office is also still headed by Patrice Alexander Ficklin, who ran it under Democratic CFPB Director Richard Cordray.

Mulvaney's efforts to move fair lending to another division and strip it of its enforcement powers have so far been unsuccessful. The CFPB did not respond to calls seeking comment.

Mulvaney spoke for just two minutes at the symposium, where he praised the CFPB, including Ficklin, for trying to help unbanked and underbanked consumers gain access to credit.

“We do think it’s a problem. Too many people do not have access to credit, too many people are living in the credit desert,” Mulvaney said. “And fintech does offer one of a variety of ways to fix it.”

The event included several panel discussions on barriers to accessing credit, solutions in the form of alternative data, and entry-level products to address the problem of credit invisibility.

“This is the business we’re in now,” Mulvaney said. “We’ve talked more about elevating the other things that we do at the bureau and educating people on trying to solve these types of market problems, which are in our statute that were mandated by Congress to do this kind of stuff. This is one of the things we’re supposed to do.”

Paul Watkins, the head of the CFPB’s Office of Innovation, also spoke about trying to get fintech companies involved.

“Innovation is not just something that happens in Silicon Valley,” Watkins said.

Watkins said fintech companies are creating products for consumers who traditionally have been locked out of the banking system.

“The way I think about it, the market has made a determination about someone and they have said your word, your promise, your integrity is not worth very much, we’re not going to lend you money or we’re going to lend on terms that are not very favorable,” Watkins said. “And technology has come in and said the market is wrong. This person’s word, their integrity, their promise, is worth a lot more than previously understood, and loans can be made on better terms than previously believed.”

Watkins said the CFPB will try to play a role in facilitating products to unbanked and underbanked consumers.

“It’s my hope that as an office, we can be participating, we can be facilitating the revaluing of our fellow human beings, the recognition of value that did not previously exist in the market,” he said.

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