Mulvaney is reforming, not destroying, CFPB

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The recent release of the Consumer Financial Protection Bureau’s new five-year plan should put to rest fears that acting Director Mick Mulvaney is going to do everything in his power to destroy the agency from within.

Rather than “set the place on fire” — as some had feared — Mulvaney has instead done exactly what a leader that has been critical of agency overreach ought to do: He’s been bringing the bureau in line with its congressional mandate.

The strategic plan, published last month, makes it clear that the bureau will take a back-to-basics approach under the new leadership.

Mulvaney states his primary purpose immediately: to keep the agency within the bounds of its original mission as laid out in the Dodd-Frank Act. “We have committed to fulfilling the Bureau’s statuary responsibilities, but go no further,” he explains. The implication is that previous leadership at the agency had no such compunctions, as is evident from the agency’s frequent rulemaking that ran counter to available data and persisted at the expense of consumer wellbeing. The contrast between Mulvaney’s vision and that of its previous director could not be starker.

The CFPB’s new strategic plan emphasizes its adherence to the agency’s original charge by hewing to the language from the law that created it. To underscore its consistency, footnotes throughout the plan cite the Dodd-Frank Act, and the first two of its three primary goals are adapted from the financial reform law: “ensure that all consumers have access to markets for consumer financial products and services” and “implement and enforce the law consistently to ensure that markets for consumer financial products and services are fair, transparent, and competitive.” (The third goal focuses on fostering “operational excellence through efficient and effective processes, governance and security of resources and information.”)

In the plan’s introductory message, which reads more like a treatise on “just government” than a report, Mulvaney provides an important reminder for all agency directors. He explains that his modest vision for the agency “should be an ironclad promise for any federal agency; pushing the envelope in pursuit of other objectives ignores the will of the American people, as established in law by their representatives in Congress and the White House. Pushing the envelope also risks trampling upon the liberties of our citizens, or interfering with the sovereignty or autonomy of the states or Indian tribes.”

Mulvaney proposes that he will ensure the agency “act[s] with humility and moderation”— an unexpected and welcome statement from the director that once said “the powers I have as acting director, they would frighten most of you.” The bureau’s previous director, Richard Cordray, mocked that call for humility in a recent op-ed. However, agency humility and moderation could go a long way toward bridging the ideological gap between those that view the CFPB as a necessity and those that view it as unconstitutional.

One particularly worthwhile aspect of Mulvaney’s strategic plan sets out to “regularly identify and address outdated, unnecessary, or unduly burdensome regulations to reduce unwarranted regulatory burdens.” The plan reestablishes regulatory review and overhaul as part and parcel of the CFPB’s core mission — something former strategic plans relegated to almost an afterthought.

Director Cordray’s draft 2016 strategic plan language, for example, was tepid, saying it would “support efforts” to reduce outmoded and onerous regulations. As one of the CFPB’s five objectives written into Section 1021 of the Dodd-Frank Act, this type of regulatory review must not be an afterthought. Under the new plan, the agency will now be an active participant in pursuing a core function of its legislative mandate.

Until Congress or the court system says otherwise, the bureau’s director is only removable for cause, which is unsettling given the CFPB’s history of notorious lack of accountability. Congress approves the budgets of most federal agencies, but the CFPB’s funding mechanism circumvents this valuable oversight, granting the CFPB authority to request up to 12% of the Federal Reserve’s operating expenses.

Power of that magnitude is easy to abuse, even unwittingly, which makes the goals of the CFPB’s new five-year plan a breath of fresh air. Americans should hope that whoever the president selects as permanent director at the bureau adopts the same sensible and modest approach that Mulvaney has demonstrated.

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