You’ve got to hand it to Mick Mulvaney for his creativity.
It was a year ago the former congressman and current Trump administration budget director was appointed to make the Consumer Financial Protection Bureau worse.
And he succeeded.
Essentially, his mission was to tear it down.
The CFPB was created after the financial collapse in 2008 to protect us from financial abuses from big business. But as a congressman, Mulvaney felt that mission was unnecessary, and called the agency a “joke.”
That “joke” had aggressively pursued lenders and other financial firms over the past six years for illegal and unethical practices, imposing nearly $600 million in fines and returning $12 billion to more than 29 million consumers.
That is a big chunk of change coming back to regular consumers like you and me.
But according to an investigation by The Washington Post, Mulvaney has effectively worked to undermine the scope and volume of the agency’s work from within.
First, he brought in a dozen or so political appointees that had little experience in consumer protection enforcement or managing large groups of people. Some were paid salaries as high as $259,500. The one thing they had in common was past work in the financial sector or lobbying efforts against the bureau. One lawyer who was hired once argued that the bureau was “unconstitutional.”
This was not a group that believed in the original mission. It was there to do demolition.
Shortly after Mulvaney took over, he announced that the bureau had serious cybersecurity problems and ordered a halt to the collection of consumer data. This stopped the bureau from searching for patterns of abuse and stopped bureau investigators from doing any work at all for weeks.
The Post also reported that on Jan. 18 bureau lawyers were ordered to dismiss a pending lawsuit against four payday lenders who set up operations on Indian reservations to get around state lending laws, while deceiving consumers and charging interest rates up to 950 percent annually. The lawsuit had been in the works for years.
On March 22, Mulvaney adopted a new seal that effectively changed the name of the “Consumer Financial Protection Bureau” to the “Bureau for Consumer Financial Protection.”
Staff members were ordered to begin altering the name on PowerPoint presentations and official documents and a dozen staffers were asked to serve on a “Name Correction Working Group.”
Mulvaney was changing the culture from vigorous enforcement aimed at protecting consumers to one of silly, mundane tasks to keep the professional staff busy while hoping they quit out of frustration.
Senior bureau officials received instructions to write detailed memos justifying their cases and their programs. It took hundreds of hours to complete while the real work was ignored.
The pace of enforcement cases slowed and the ones that did go forward asked for penalties far below what was recommended by experienced staff members.
According to The Post, staff members called it “The Mulvaney discount.”
This is government at its worst.
In one case where employees at the National Credit Adjusters were accused of impersonating law enforcement officers while collecting debts from consumers, bureau lawyers sought $60 million to be returned to consumers.
Instead, one of the political appointees — remember the appointee who once described the bureau as “unconstitutional — voided the payments to consumers and reduced the fines against the company to $800,000.
This is the real corruption.
The CFPB now appears to be in bed with big finance.
So while the rest of us read the tweets and wait for the latest from the Mueller probe, Mulvaney is taking down an institution designed to protect consumers and ensure we never lose our retirement savings again.
He continues to make progress.
According to the Post, the agency work force is down 129 people since a year ago and enforcement actions are off 75 percent.
“The bureau is forcing hundreds of staff to sit on their hands while millions of Americans suffer from predatory practices happening right under its nose,” former assistant director Seth Frotman told The Post.
Just last week, Politico found that the Trump administration had concealed a report that showed Wells Fargo was charging college students banking fees that were several times higher than some of its competitors.
The report was produced by the office that Frotman used to lead before he resigned in August in protest of Trump administration policies. Frotman said administration leaders had suppressed publication of the report.
Last week, Kathy Kraninger, another member of the White House budget office with no financial industry regulation experience, was confirmed by the U.S. Senate 50-49 as the next director.
It’s hard to look away from the scandals rocking Washington, but I fear we are not looking at the right ones.