MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
Former Rep. Mick Mulvaney is a busy man. He was not only selected by Trump to serve as the director of the White House Office of Management and Budget, but Trump also appointed him -- in a controversial move -- to be interim head of the Consumer Financial Protection Bureau (CFPB). The CFPB, of course, was the brainchild of Elizabeth Warren, before she was elected senator. It was intended to protect consumers against the exploitative practices of financial institutions. It opened its doors in 2011, and, according to the agency's website, has obtained $11.9 billion dollars in relief for more than 29 million consumers.
However, under Trump and Mulvaney, the CFPB is under danger of becoming the financial institution protection bureau. A January 23 New York Times article disclosed an internal memo Mulvaney sent around to CFPB staff. The Times characterized Mulvaney's approach:
Mr. Mulvaney made clear that under his direction, the consumer bureau would be more reluctant to target companies without overwhelming evidence of wrongdoing and suggested that the effect on a business should be weighed more heavily when considering cracking down on potential consumer abuses.
Mulvaney, who in the past called the CFPB "a joke," is a "tea party drone," according to Charles P. Pierce of Esquire. Just the other day, Reuters revealed that the CFPB, under Mulvaney, had stopped a multi-pronged investigation into the Equifax computer hack that affected more than 140 million people. This means that the CFPB is protecting Equifax over the online identity security of millions of consumers.
This is typical of the direction of the CFPB under Trump. The DC Circuit Court of Appeals ruled last month that the Trump administration cannot disband the CFPB or absorb it into another agency. However, with Mulvaney heading both the Office of Management and Budget and the CFPB on an indefinite basis, the White House has in large part accomplished its goal of shifting a pro-consumer agency toward favoring the interests of large financial institutions.
Take for example, the CFPB's recent pivot toward the predatory payday loan industry. As NPR reported in January:
Payday lenders appear to have a powerful friend in Washington.
Watchdog groups are up in arms because, under Mulvaney, the CFPB has put on hold a rule that would restrict payday lenders and their high-interest-rate loans. The agency has also dropped a lawsuit against online lenders charging 900 percent interest rates. Critics say these moves are payback for campaign contributions to Mulvaney when he was a congressman representing South Carolina.
People of color and poor whites are the primary customers of the payday loan industry, which charges exorbitant interest. It preys on those with low incomes and poor credit records. The industry tends to have a strong influence on state legislatures because of campaign contributions and a strong lobbying presence. That is one reason that the payday loan industry became a target of the Obama administration's CFPB director, Richard Cordray.
Another indicator that the eviscerating of the CFPB will particularly adversely affect people of color: The agency's Office of Fair Lending and Equal Opportunity, which used to be an independent department, was absorbed into Mulvaney's director's office. Public Citizen, a nonprofit advocacy group in DC, deplored the move in a recent news release,
The Office of Fair Lending and Equal Opportunity has been crucial in protecting consumers, especially people of color and low-income borrowers. Gutting the office’s enforcement powers is the latest example of interim CFPB Director Mick Mulvaney unashamedly working on behalf of big banks and predatory lenders instead of consumers.
Congress gave the CFPB the authority to protect consumers from lending discrimination. By giving up these powers, Mulvaney is acting as an agent of exactly the kind of bank-led sabotage that Congress aimed to prevent by making the consumer bureau an independent agency.
A February 1 Washington Post article notes a disturbing statistic that reveals the need for a vigilant surveillance of lending discrimination:
The office previously used its powers to force payouts in several prominent cases, including settlements from lenders it alleged had systematically charged minorities higher interest rates than they had for whites...
On average, black, Hispanic and Asian American customers paid between $200 and just over $300 more for auto loans than whites who were equally creditworthy, federal officials charged.
Now such injustices are in the hands of Mulvaney, who is acting on behalf of the financial industry.
If there remains any doubt about the intentions of the Trump administration in relation to weakening the CFPB, consider this: Mulvaney requested no financing for the agency for the second quarter of fiscal year 2018. He avowed that "he plans to slash the bureau's reserve fund," according to the Los Angeles Times.
The Trump administration is putting consumer protection on a starvation diet.