Mulvaney Promises CFPB Reform, End of ‘Regulation by Enforcement’

Mick Mulvaney on Wednesday used his time before Congress to declare the end of regulation by enforcement — all while insisting that he didn’t actually have to answer any questions.

“Regulation by enforcement is done,” the acting director of the Consumer Financial Protection Bureau said during testimony before the House Financial Services Committee. “We’re not doing it anymore. I believe very firmly that financial service providers should be allowed to know what the law is before they are accused of breaking it.”

Those comments echoed an opinion piece Mulvaney wrote for the Wall Street Journal back in January, in which he also promised not to “go looking of excuses to bring lawsuits.”


The acting director, making his first appearance before Congress since assuming the role last November, made the pointed decision to not read his prepared remarks — calling it “a complete waste of time” — and instead moved straight to questioning from the representatives. Still, Mulvaney emphasized that under a strict reading of the Dodd-Frank legislation that created the CFPB, he only had to appear and not actually provide any testimony.

“I believe it would be my statutory right to simply sit here and twiddle my thumbs for the next four hours while y’all ask questions,” Mulvaney said. “I think that’s wrong.”

While he emphasized that he wanted to address questions, Mulvaney said that particular legal loophole was representative of what is “broken” about the CFPB.

That set the tone for the remainder of the lengthy hearing, in which Mulvaney’s Republican allies on the committee praised his new, hands-off leadership of the bureau and his Democratic opponents largely criticized his handling of business thus far.

“You are, thankfully, both a terrible bureaucrat but a great leader — a most welcome change,” Rep. Blaine Luetkemeyer, a Missouri Republican, told Mulvaney early on in the proceedings.

Democrats, including ranking member Rep. Maxine Waters of California and Rep. Carolyn Maloney of New York, repeatedly insisted that their presence at the hearing didn’t imply that they think his appointment is legitimate; a legal battle involving deputy CFPB director Leandra English, who claims to be the rightful successor to former director Richard Cordray, remains ongoing.

Specific areas of change

Mulvaney told lawmakers that he’s interested in gathering more data about potential changes to data required from companies under the Home Mortgage Disclosure Act (HMDA), as well as the CFPB’s controversial consumer complaint database.

“I am very much concerned about the privacy of that data, about the use of that data, about the unverified nature of some of that data,” Mulvaney said.

The acting director also said he plans to focus more on quantitative analysis of potential enforcement actions and regulations going forward, with a particular emphasis on considering the potential harm that removing certain financial options could cause to consumers.

“I think ti’s important that we bring some transparency and accountability to this bureau,” he said.

Written by Alex Spanko

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  • Mick Mulvaney, I applaud you for your firm position before congress and having the guts to say it the way it is!!

    As long as the Dodd-Frank bill stays on the books, so will the CFPB have its powers! The saving grace will be Mick Mulvaney, at least until the Dodd-Frank bill can be repealed!

    That is my opinion all, for what ever it is worth!

    John A. Smaldone

  • FINALLY! Someone that has the “you know what” ( cause the other word I used was “not acceptable!” ), to loosen the noose! And there will likely be some of you conveying how “worried” you may be that this throttling back of “enforcement” will open the door for abuse. Unfortunately, it may and that is always going to be inherent with any industry where money and customers interact. However, the constant threat of heavy sanctions and ridiculous fines stifle growth and creativity, especially among smaller less cash resilient companies with sincere efforts in recognizing regulations while at the same time exercising their muscles to grow in a very competitive environment by thinking and marketing “outside of the box!” Disclaimers, yes. Regulation and enforcement, yes. But getting called into the principals office and asked to empty your pockets because you didn’t stand tall at saluting the draconian flag ( Dodd Frank in our case ), really? Our industry is rightfully and sadly scared too death in how we run our business… last count was approximately 292 pages in a reverse mortgage application package for an unmarried individual! We need to continue doing more to enforce ourselves and our industry from within and applaud moves like the new “Mulvaney Doctrine” so we can finally move beyond the 2% market penetration we have been so pathetically stuck at. There’s a new sheriff in town, let’s give him a supportive chance.

  • Let us hope that while the Director holds office that the Republicans can throw the wrench into the machinery that will make it work like the way that the current Director thinks. If law changes aren’t made, the Mulvaney era will be remember with fondness while a more aggressive Director will return us to the Cordray era.

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