Mulvaney Cites Own Conduct as Prime Reason to Limit CFPB Powers

In case you missed the punchline of Jeff Sovern's post on the CFPB's annual report, the news is not the report itself (which conscientiously recites the CFPB's actions between February and September 2017, before Mick Mulvaney was appointed Acting Director following Richard Cordray's departure), but the cover letter, in which Mulvaney proposes that Congress gut the agency.

Perhaps Mulvaney's most dramatic proposal is to "require legislative approval of major Bureau rules." That one is truly breathtaking. It would really mean that the CFPB couldn't issue major rules at all: Anything it wanted to do would require legislation enacted by both Houses of Congress and signed by the President (or passed by a majority sufficient to override a presidential veto). None of the major regulatory agencies is subject to that kind of limitation; if it were, it wouldn't be a regulatory agency, just a proposer of legislation, a particularly futile role in an era of partisan gridlock in Congress.

Mulvaney's proposal to ensure that the CFPB Director "answers to the President" is code for eliminating the CFPB director's protection against being fired without cause by the President, the constitutionality of which was recently affirmed by the D.C. Circuit. The proposal would turn the CFPB from an independent agency into one whose director must do the President's bidding, whether that advances the agency's purpose of protecting consumers or not. 

The proposal that the Bureau be funded by congressional appropriations would eliminate the significant financial independence it now enjoys by receiving its funding through the Federal Reserve System.

Next to these, the suggestion that the CFPB get an inspector general seems pretty innocuous. The first three, however, would ensure that the inspector general would probably have plenty to do investigating improper political pressures on the agency and failure to carry out statutory mandates.

The icing on the cake is Mulvaney's argument that those who disagree with his own actions as Acting Director should support his proposals to make the agency's director more "accountable." Mulvaney's determination to hamstring the agency hardly seems like a sufficient reason for Congress to step in and complete the job.


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