Remaking the CFPB? Mulvaney wants to hear from you on how to fix bureau

Will ask for public input on all functions of the bureau

It’s clearly a whole new world at the Consumer Financial Protection Bureau with Mick Mulvaney in charge.

Mulvaney, who is currently serving as acting director of the CFPB until either President Donald Trump names a permanent replacement for former Director Richard Cordray or a federal court tells him otherwise, is already making changes at the CFPB.

How many more changes Mulvaney will bring to the bureau is now a question that the public (including the financial services industry) has the opportunity to weigh in on.

On Wednesday, the CFPB announced that it is issuing a “call for evidence to ensure the bureau is fulfilling its proper and appropriate functions to best protect consumers.”

According to the CFPB, it will publish requests for public comment on the bureau’s enforcement, supervision, rulemaking, market monitoring, and education activities.

These “Requests for Information” will “provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities.”

In layman’s terms, that basically means that the CFPB wants you to tell it whether or not the agency is working and what you’d do to make it better. Consider this your chance to finally tell the bureau what you really think of it and how it works.

“In this new year, and under new leadership, it is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau’s statutory mandate,” Mulvaney said in a statement.

“Moving forward, the bureau will consistently seek out constructive feedback and welcome ideas for improvement,” Mulvaney added.

“Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process,” Mulvaney continued. “I look forward to receiving public comments in response to this call for evidence and encourage all interested parties to participate.” 

According to the CFPB, the first RFI will ask for public comment on the bureau’s use of Civil Investigative Demands, a tool used by the bureau in enforcement actions.

“Comments received in response to this RFI will help the bureau evaluate existing CID processes and procedures, and to determine whether any changes are warranted,” the CFPB said.

Mulvaney has already begun to shake things up considerably at the CFPB since taking over after Cordray stepped down in November.

On Tuesday, the CFPB announced that it may “reconsider” the so-called “Payday Rule,” which is designed to protect consumers from predatory payday, car title, and other short-term loans by requiring the lenders to verify that the borrower will be able to repay the loan.

Unsurprisingly, advocates of the rule greeted this announcement with a decided lack of warmth.

“The Trump administration has struck again as it continues efforts to roll back important protections that benefit America’s hardworking consumers,” House Financial Services Committee Ranking Member Rep. Maxine Waters, D-Calif., said in a statement.

“Today, Mick Mulvaney, who Trump unlawfully appointed to head the bureau, announced his plan to strip those protections from consumers,” Waters continued. “Republicans are once again giving payday loan sharks a reprieve at the expense of hardworking Americans. This is unacceptable.”

Karl Frisch, the executive director of progressive group Allied Progress, agreed with Waters.

“As a congressman, Mick Mulvaney took thousands of dollars from the payday industry. Now, as ‘acting director’ of the CFPB, he is returning the favor by sabotaging these important protections that would have guarded against predatory lenders and protected struggling consumers from falling into the cycles of debt with sky-high interest rates,” Frisch said.

“The CFPB thoroughly and thoughtfully considered every aspect of this issue over the course of several years,” Frisch added. “There is no reason to delay implementation of this rule – unless you are more concerned with the needs of payday lenders than you are with the interests of the consumers these financial bottom-feeders prey upon.”

On the other hand, Richard Hunt, the president and CEO of the Consumer Bankers Association, welcomed Mulvaney’s announcement about the payday rule.

“The CFPB’s decision to revisit its small-dollar rule is welcomed news for the millions of American consumers experiencing financial hardship and in need of small-dollar credit,” Hunt said.

“Under the current rule, many banks are forced to sit on the sidelines and prevented from offering affordable and popular small-dollar credit options to help meet the needs of their customers,” Hunt continued. “As the CFPB reconsiders this rule, we encourage the bureau to work with bank regulatory agencies to examine the use of bank offered small-dollar lending products, such as deposit advance products, and ensure any final rule treats all banks equally.”

And earlier this month, Sen. Elizabeth Warren, D-Mass., accused Mulvaney of actively working to “halt and weaken critical agency functions” at the CFPB by freezing the collection of personal data.

According to Warren, Mulvaney overreacted to a report from the CFPB inspector general about data security and is using the report as a cover for restricting the bureau’s activities.

But soon, you’ll be able to tell the CFPB whether you like Warren and Cordray’s way of doing business or if you prefer Mulvaney’s methods. Get those keyboards ready.

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