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Government

CFPB Chief Wants to Rein in His Own Bureaucracy

Mick Mulvaney aims to curb his agency's unaccountable authority. Elizabeth Warren wants to stop him.

Brian Mark Weber · Apr. 6, 2018

The head of a powerful government agency wants Congress to take action. But the action he wants may come as a surprise. Office of Management and Budget Director Mick Mulvaney, who’s also the Trump-appointed director of the Consumer Financial Protection Bureau, wants Congress to reduce that agency’s power and make it more accountable.

That’s not a misprint. Call it “draining the swamp” or whatever you like, but clearly there’s a paradigm shift taking place in the nation’s capital.

But could a federal agency that’s only been around since 2010 really be out of touch with its mission? Recently, Mulvaney escorted a Daily Caller reporter “through a 2,660-square-foot athletic facility with two huge locker rooms, offices with electric height-adjustable workstations, a library with a sofa and lounge chairs but few books, a roof deck with spectacular views and motorized cantilevered umbrellas, and a courtyard with lavish fountains. The images recalled the familiar spectacle of triumphant soldiers touring a deposed dictator’s opulent palace.”

Actually, those palatial digs belong to a modern-day bureaucracy, but it’s not just the profligate spending that should worry Americans. The CFPB is an Obama-era creation, and it wields a tremendous degree of authority over American businesses and consumers. As The Washington Post reported in 2016, “The director unilaterally enforces 19 federal consumer protection statutes, covering everything from home finance to student loans to credit cards to banking practices. The director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law; and what sanctions and penalties to impose on violators of the law.”

But Mulvaney recently asked Congress to make substantive changes to how the CFPB operates by requiring congressional approval for all major policy initiatives, changes to current policies and funding. Mulvaney’s report to Congress also gives the president unilateral authority to remove the director of the CFPB for any reason.

Change we can believe in?

It’s a bold move, and it reminds politicians that federal bureaucracies must be held accountable. Mulvaney suggested that “structuring the bureau the way it has, Congress established an agency primed to ignore due process and abandon the rule of law in favor of bureaucratic fiat and administrative absolutism.”

Essentially, what Mulvaney is asking Congress to do is ensure that the bureaucracy itself carries out its mission in the most efficient manner and in the interests of the American people. No government agency should be allowed to police itself, especially one that enjoys funding from the Federal Reserve and operates without having to answer to the very political body that created it.

In reality, however, that’s what Democrat Sen. Elizabeth Warren and other Democrats wanted when they created the agency. In 2010, they structured the CFPB with the belief that Democrats would rule the roost in DC for years to come. They gave the director broad, unchecked power because Democrats love to regulate. That’s what they do.

But a funny thing happened on the way to Hillary Clinton’s coronation, and suddenly Democrats were worried what Donald Trump’s new director might do with all that power. They claimed (and still do) that Mulvaney is sticking it to the American consumer in favor of large corporations. On the contrary, what he’s done is make the agency more accountable than ever before. Democrats know this. They just don’t want the American people to know it.

Mulvaney lamented of his own power, “I am the judge, I am the jury, and I am the executioner,” and “if you don’t like it, talk to the person who wrote the statute.” That person is Warren, who inspired the creation of the CFPB. But Warren isn’t interested in changing the agency, because doing so would create the very transparency and accountability that a federal agency should have.

Making the changes that Mulvaney wants is not a done deal. Any revisions to the CFPB structure or policies must come with congressional approval, and Democrats have vowed to stand in the way. Were Democrats to take back either congressional chamber this November, chances for reform would be slim. Mulvaney and Sen. Warren will come face-to-face next week when the director of the CFPB goes to Capitol Hill to make his pitch.

Other critics of Mulvaney’s approach include Mike Litt of the United States Public Interest Research Groups, an organization that ostensibly represents consumers. Litt said that Mulvaney “wants to take away the bureau’s independence and then make it harder for it to do its job.” Litt added, “Recommendations in [his] report, if implemented, would stop the agency from protecting consumers and prevent it from doing its job.”

Actually, keeping the CFPB intact would continue to hurt consumers by eliminating competition and preventing Americans from accessing financial services they need. And if no changes are made, there’s no telling what other schemes the CFPB will come up with in the name of “consumer protection.”

Let’s hope that Mulvaney convinces Congress to reform the CFPB. In the end, American consumers and our political system would benefit the most. And Warren’s dream of government policy by fiat would be dealt a severe blow — at least until Democrats retake control of the regulatory state.

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