Is the Consumer Financial Protection Bureau mission changing?

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Critics of the agency say businesses may be getting more protection than consumers

Some longtime supporters of the Consumer Financial Protection Bureau (CFPB) are expressing dismay about the direction of the agency under the Trump Administration.

The agency was created under the 2010 Dodd Frank financial reform law, tasked with protecting consumers from abusive practices by some banks, credit card companies, and other financial institutions.

Republicans, including Trump Administration officials, have criticized the agency, accusing it of burdening businesses with unnecessary regulations.

Now that a Trump Administration appointee -- former budget director Mick Mulvaney -- leads the agency, some consumer advocates worry it could become more protective of businesses than consumers.

Contested leadership

Melissa Stegman, senior policy counsel at the Center for Responsible Lending, is among those who contend that Mulvaney was illegally appointed. She says CFPB deputy director Leandra English should have become director when the position became vacant under current law.

"The CFPB is now being led by someone who tried to eliminate the agency when he was in Congress, as OMB Director authored a budget calling for the defunding of the agency, and in his presumed role as director said 'other agencies can do this job well if not more effectively,'” Stegman told ConsumerAffairs.

The progressive blog Think Progress points to a not-so-subtle change to the agency's mission statement at the end of every press release. Originally it read:

“The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.”

Since Mulvaney took the helm at the CFPB, the statement reads:

“The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives.” (emphasis added)

“Leading up to the financial crisis, consumer protection was insufficient and fragmented among the financial regulatory agencies," Stegman said. "In fact, inadequate regulation was determined to be a major cause of the crisis. The new mission statement wording shows that Mulvaney is more interested in eliminating rules rather than enforcing those rules.”

ConsumerAffairs asked the CFPB for a clarification of the agency's mission. John Czwartacki, senior advisor at the CFPB, said "This agency is committed to protecting consumers' rights."

Facing criticism

Georgetown University law professor Adam Levitin was among the first to notice the change and called attention to it in a Tweet that received widespread attention.

“And it's good to know that this is what Mulvaney thinks is the agency's primary mission, important enough to list first," Levitin wrote.

Sen. Elizabeth Warren (D-Mass.) is another critic of CFPB's apparent new direction. Last month, she requested more information about Mulvaney's reported decision to suspend payments to consumers from the agency's Civil Penalty Fund.

The fund was established under Dodd-Frank to "provide compensation for consumers who have been harmed by violations of federal consumer financial protection law." Warren, along with fellow Sen. Sherrod Brown (D-Ohio), questioned Mulvaney's authority to halt payments.

Stegman points to other changes in direction she believes the consumer watchdog is taking under the Trump Administration. She says CFPB has taken steps to freeze hiring and rulemaking, and she expects the agency to try to withdraw a plan to poll consumers about their experience with debt collectors as part of rulemaking on debt collection.

She also said she expects the agency, under its new leaderships, will try to roll back the CFPB small dollar lending rule, which places new regulations on payday lenders.

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