CFPB to dramatically reorganize operational structure

Plans to create new offices and close existing ones

Consumer Financial Protection Bureau Acting Director Mick Mulvaney announced in an email to staff that he plans to reorganize the bureau’s operational structure.

Mulvaney sent out a memo to staff Wednesday, saying the CFPB will relocate its Office of Students and Young Consumers and fold it into the Office of Financial Education, according to the memo reviewed by HousingWire.

Mulvaney explained in the memo that the changes are “to make the bureau more efficient, effective and accountable.”

But not everyone agrees the changes will improve the CFPB. Ranking Member of the House Committee on Financial Services Maxine Waters, D-Calif., said the restructuring sends a clear message that political appointees are infiltrating the agency with an ideology that will put consumers last.

“The closing of the Office of Students and Young Consumers is deeply concerning and will most certainly set back the progress the Consumer Bureau had made to protect our nation’s students and consumers,” Waters said. “Under the leadership of Richard Cordray, the Consumer Bureau was vigilant in protecting the over 44 million student borrowers who collectively carry over $1.48 trillion in student loan debt in this country.”

“In fact, just last year, the Consumer Bureau brought an enforcement action against Navient, the largest student loan servicer in the U.S., for providing false information to borrowers, processing payments incorrectly, illegally steering borrowers away from lower-cost repayment plans, and failing to respond to borrower complaints,” she said.

But the bureau told HousingWire that the changes were not significant at all, saying there was no functional or even practical change.

“This is a very modest organizational chart change to keep the Bureau in line with the statute but the office is still operating within the same division,” CFPB Chief Communications Officer and Spokesperson John Czwartacki said. “The work of the office continues, personnel are all on the job and working on the same material as they were before.  The bottom line is there is no functional or even practical change.”

Mulvaney also created a new Office of Cost Benefit Analysis, which would bring more of the bureau’s operations under direct supervision of his handpicked staff.

“The creation of an Office of Cost Benefit Analysis, to be closely controlled within the Office of the Director, is nothing more than a way to internally block regulations that may benefit consumers under the guise of cost-benefit analysis,” Waters said.

Here are all of the organizational changes Mulvaney announced in the memo:

  • The revised organizational chart will highlight that Brian Johnson is serving as my final stop on all things policy related with a focus on RMR, SE and CEE. Kirsten Sutton is serving as my lead on management issues along with focusing on Ops, EA and Legal.
  • The Chart will also highlight that the PADS are my representatives in each division.
  • We will be hiring a PAD for the Legal Division.
  • CZ will be housed in the front office and while he will work with Anthony and the communications team, he is a direct report to me.
  • You will see two new offices housed in the front office:
    • Office of Cost Benefit Analysis
    • Office of Innovation (formerly Project Catalyst)
  • The office of “Students & Young Consumers” within CEE will be folded into the office of “Financial Education.”
  • The office of “Financial Empowerment” within CEE will be renamed the office of “Community Affairs.”
  • The office of “Community Affairs” within EA will be renamed.
  • As of this coming Sunday, the Office of Consumer Response will be formally located within CEE.
  • The Bureau continues to negotiate with NTEU and make preparations to implement the move of OFLEO to OEOF.

Since becoming acting director in November, Mulvaney continues to make significant changes to the CFPB. Some of these changes include considering ending public access to bank complaints, changing its fair lending enforcement and even changing the bureau’s name.

And now, the administration seems to be looking to extend Mulvaney’s tenure as it drags out its nomination process for a permanent director. The acting director can only serve six months, unless there is another candidate already nominated and going through the nomination process.

Sources familiar with the matter say President Donald Trump plans to name National Credit Union Administration Chairman J. Mark McWatters as permanent director, but not until close to June 22, according to an article by Kate Berry for American Banker.

Given the current rate of nomination approvals, this could leave Mulvaney in charge of the bureau at least until the end of the year.

However, the article also explains this plan could backfire if the tide swings in the Democrats’ favor in this year’s mid-term elections.

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