Mulvaney closes down consumer bureau office that polices racism in lending
The acting director of the Consumer Financial Protection Bureau (CFPB) has stripped an office devoted to lending discrimination of its enforcement power, according to an email released Thursday.
Acting CFPB chief Mick Mulvaney told bureau staff in a Tuesday email that he would transfer the agency’s Office of Fair Lending and Equal Opportunity to a department under his purview in an effort to streamline the agency.
Mulvaney said the fair lending office will focus on consumer education and advocacy under control of the office of the director. The bureau’s supervision, enforcement and fair lending division, a separate unit outside of the director’s office, will take over policing the lending market for racial discrimination.
“These changes are intended to help make the Bureau more efficient, effective, and accountable, and I plan to seek both internal and external input as I continue to evaluate how we work,” Mulvaney wrote, saying he didn’t expect layoffs from the move but also could not rule them out.
The decision enraged the CFPB’s progressive backers, who supported former Director Richard Cordray and his aggressive actions against lenders suspected of wrongdoing.
Cordray himself panned the “CFPB squatter leadership” for “interfering” with crucial bureau work.
“We took on tough cases about redlining and other violations,” Cordray tweeted. “Some don’t like it but it is the Law of the Land.”
Mulvaney and his staff insisted the restructuring is simply a matter of streamlining the CFPB while still cracking down on racial discrimination.
“It never made sense to have two separate and duplicative supervision and enforcement functions within the same agency — one for all cases except fair lending, and the other only for fair lending cases,” senior Mulvaney adviser John Czwartacki said in a statement. “By announcing our intent to combine these efforts under one roof, we gain efficiency and consistency without sacrificing effectiveness.”
Mulvaney, who as a GOP congressman opposed the CFPB’s existence, has sought to reshape the bureau from within.
The acting director has promised to make the bureau more responsive to the needs of the financial sector, reopened rules on payday loans and prepaid debit accounts, and called for firms subject to CFPB oversight to send complaints about the bureau’s investigative procedures.
Democrats and liberal political groups that fiercely defended the CFPB under Cordray argue that Mulvaney is destroying the agency and leaving vulnerable consumers without a powerful watchdog.
[The Hill]