Featured Image Credit: Wells Fargo
Following the 2008 financial crash and the subsequent Great Recession, the Obama Administration established the Consumer Financial Protection Bureau as part of its Administration’s response, and in doing so created a behemoth of a government agency that exemplifies Washington bureaucrats, running wild with over-regulation and burdensome red tape that to this day are still stifling American small businesses, hardworking homeowners, and borrowers across the country.
Then CFPB Director, Richard Cordray, swaggered around Washington, essentially acting as though he and his agency were above the law itself; that the agency’s mandate wasn’t to protect consumers so much as it was to over-investigate and suffocate lending opportunities beneficial to those who needed it most. What the Obama Administration and uber-liberal Sen. Elizabeth Warren, the CFPB’s brainchild, failed to do was establish Congressional oversight on the Bureau. Maybe they did this intentionally. But either way, the agency has failed miserably.
Fortunately, one positive outcome of the 2016 election was President Donald Trump’s appointment of Mick Mulvaney as Acting Director of the CFPB, bypassing Obama’s appointment following Cordray’s departure. Mulvaney now plays the role of a one-man oversight committee by reconstituting the Bureau as a fair arbiter of consumer protection, complaint investigations, and as a check against massive bureaucratic overreach.
Mulvaney has already spent his short time as director getting to work and quickly cleaning up the agency. He’s eliminated a 25-member (appointed) CFPB advisory board, and will instead focus on getting feedback and input from actual consumers, industry voices, and the public directly. He’s slowed down the previously overreaching bureau’s investigations, has thrown out frivolous investigations, and is considering eliminating numerous other enforcement actions in the consumer lending and mortgage servicing areas that are preventing small businesses and homeowners from having any sense of consistency and planning for the future.
These are immensely important services being provided by companies who are greatly helping to stabilize and grow the American economy when other financial institutions are turning away.
Now President Trump has announced he will officially nominate Kathy Kraninger as the next permanent director of the CFPB. As fate would have it, she will take the helm – provided the Senate approves her nomination – later this summer or fall. There isn’t a better person to be on-deck than Kraninger, who will no doubt follow in Mulvaney’s footsteps.
In the meantime, while Kraninger’s nomination is considered by the Senate, Mulvaney should continue cleaning out the barn, and leave Kraninger with as few raging fires as possible as he prepares to hand over the reins. Specifically, he should work to wrap up and wind down as many investigations as possible on companies who are actually trying in good-faith to help Americans, and instead focus resources on the actual bad-actors who deserve attention, such as Wells Fargo, as quickly as possible, so that good-faith businesses can have clarity and consistency in planning their futures, and get back to growing and hiring new employees.
Mulvaney appears to understand intuitively the danger the CFPB is capable of. “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,” he wrote in a memo to his staff. “But what about the workers who are laid off as a result? Where do they go the next morning?”
Mulvaney can keep up the good work he’s started by continuing to clean out the barn Cordray left him. This would allow Kathy Kraninger to hit the ground running once confirmed as the CFPB’s next captain.