Former Director Richard Cordray left the Consumer Financial Protection Bureau 135 days ago, leaving his place to Acting Director Mick Mulvaney. Since then, the bureau has not issued a single enforcement action.
And this does not just apply to the mortgage industry. Banks, credit card companies, debt collectors or any other finance company has not received an enforcement action from the CFPB since Mulvaney took over, according to a new report by Ken Sweet for the Associated Press.
But this will come as no surprise as Mulvaney has made his thoughts on enforcement public, saying from the beginning he will no longer “push the line.”
This paragraph from a note Mulvaney sent to CFPB staff back in January shows the new acting director’s view of the bureau’s responsibility:
It is not appropriate for any government entity to “push the envelope” when it comes into conflict with our citizens. The damage that we can do to people could linger for years and cost them their jobs, their savings, and their homes. If the CFPB loses a court case because we “pushed too hard,” we simply move on to the next matter. But where do those that we have charged go to get their time, their money, or their good names back? If a company closes its doors under the weight of a multi-year Civil Investigative Demand, you and I will still have jobs at CFPB. But what about the workers who are laid off as a result? Where do they go the next morning?
Later in the note, Mulvaney explained that, moving forward, enforcement actions will be used as a last-case option, and only after other methods have failed.
Under Cordray, the CFPB issued an average two to four enforcement action each month, according to the AP report.
In a daily note to his followers, Brent Nyitray, formerly of iServe Residential Lending, explained the viewpoint of many companies in the finance industry and Republicans, including Mulvaney.
The enforcement action is one of two ways for the Bureau to regulate – the other is via supervisory means – in other words confidential discussions with the banks involved. Richard Cordray preferred to use only the enforcement action, which the industry disliked. The best analogy would be driving down an expressway with no speed limit signs. The only way to find out if you are going over the limit is when you (or someone else) gets a ticket. Regulators generally loathe to put out "bright lines" for fear that the industry will go right up to the line, and then figure out how to game it. Mulvaney is backing off from that approach.
However according to the CFPB’s figures, which were last updated July 20, 2017, the bureau has brought $11.9 billion in relief through its enforcement actions, and more than 29 million consumers will receive relief because of its actions.