In the first Consumer Financial Protection Bureau (CFPB) semi-annual report issued under acting director Mick Mulvaney’s watch, the newly installed agency head stated the CFPB is “all too powerful.”
And the mechanism for that power? The Dodd-Frank Act, wrote Mulvaney in the introduction to the report, pointing toward the structure of the CFPB itself.
Mulvaney wrote that the Dodd-Frank Act, by virtue of creating a leadership hierarchy that has a single head, leaves the potential for that head to abuse power. “Congress established an agency primed to ignore due process and abandon the rule of law in favor of bureaucratic fiat and administrative absolutism,” he wrote.
As has been widely reported, one proposal making the rounds on Capitol Hill would replace that single director structure in favor of a bi-partisan board of directors, using other agencies, such as the Securities and Exchange Commission (SEC), as a template.Mulvaney did not explicitly endorse a replacement structure in his Monday writings.
The Senate has passed legislation that would trim some of Dodd-Frank’s reach, but does not in fact change the structure of the CFPB.
“The power wielded by the Director of the Bureau could all too easily be used to harm consumers, destroy businesses or arbitrarily remake American financial markets,” he wrote. “I’m requesting that Congress make four changes to the law to establish meaningful accountability for the Bureau. I look forward to discussing these changes with Congressional members.”
Among those recommendations: that the CFPB be funded through Congressional appropriations, and that Congress approve CFPB rules.
Mulvaney’s third recommendation, according to the report, “is to ensure that the director answers to the president in the exercise of executive authority.”
The fourth recommendation is to create an independent Inspector General for the Bureau.
Delving into the report itself, the period discussed spans the fiscal year that ended September 30, before Mulvaney had been appointed by President Donald Trump to helm the Bureau. Through that timeframe, roughly 317,000 complaints came the CFPB’s way, with 235,400 passed on by the Bureau to companies for review and response. Among the complaints most often seen: debt collection and credit reporting were 27 percent each, trailed by mortgages at 13 percent. The bulk of complaints, at 80 percent, were submitted by consumers through the agency’s site.
Elsewhere, the report, which is issued to Congress, discussed “credit invisibles” and their inability to access basic banking products and services. “Additional research on the processes being used to underwrite loans for credit invisible consumers may help illuminate potential approaches to reducing” that lack of access, the report stated.