The Mulvaney Discount

by Jeff Sovern

David Dayen has coined the phrase, the "Mulvaney Discount," to describe the tendency of CFPB Acting Director Mick Mulvaney to settle cases for less than the original amount. As Dayen and others have pointed out, Mulvaney's CFPB has been announcing more enforcement cases than it did in his first six months. That's good, but if the penalties are too small, the Bureau's actions will not have sufficient deterrent effect.  In addition, when Mulvaney settles for smaller amounts of restitution, not only do consumers receive less, but Mulvaney  undermines one of the Bureau's selling points. Advocates for the Bureau frequently cite the $12 billion it has returned to consumers, but that number will grow more slowly as Mulvaney reduces restitution, making the Bureau seem less effective–which under Mulvaney, appears to be the case.  Dayen describes a couple of cases in which consumers will receive no restitution at all, though he also mentions one in which they will receive $25 million.

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