The Trump administration has waged a quiet war on many of our institutions by dismantling them from within. The Consumer Financial Protection Bureau (CFPB) is the most recent victim.
The CFPB was designed to be an independent watchdog for consumers. Congress established it in the aftermath of the 2008 recession to address problems relating to credit reporting, debt collection, mortgages and student loans. Congress gave it authority to collect, investigate and respond to consumer complaints about financial institutions’ alleged abuses. Under its first director, Richard Cordray, the CFPB returned $11 billion in restitution to 29 million consumers. That’s a weekly average of $43 million!
Donald Trump’s first appointment to head the bureau was Mick Mulvaney, an outspoken critic of it. Mulvaney was brought in to curtail the CFPB’s ability to protect consumers and hold financial agencies accountable. He did so by cutting the budget by 21 percent, restructuring the agency and restricting its activities.
Under Mulvaney, the CFPB’s enforcement activities fell dramatically, and he settled cases without any – or with much smaller amounts of – monetary restitution paid to consumers. During his tenure, restitutions averaged a weekly total of 15 percent of his predecessor’s. Cordray charged that Mulvaney had “dismissed enforcement actions, delayed the payday lending rule and … taken up the cause of financial-industry cheaters who have done – and continue to do – great harm to the American people.”
Mulvaney stripped the bureau’s Office of Fair Lending of its enforcement powers and restricted its mission to “advocacy, coordination and education.” He also significantly modified the Home Mortgage Disclosure Act reporting requirements and dropped the investigation into the breach of 142 million people’s financial data at Equifax.
Mulvaney’s successor has further wound down the bureau’s activities, posting monetary restitutions averaging a mere 2 percent of Cordray’s, and sharply reducing illegal-credit and debt-collection activities while curtailing the policing of the home-mortgage and student-loan markets.
The CFPB was the brainchild of a Harvard law professor named Elizabeth Warren. We don’t need to be afraid of her vision for America. We should embrace it.
Sister Bay, Wisconsin