Author Archives: cfpbfacts

  1. It’s Official: Mick Mulvaney Keeps Winning

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    Mick Mulvaney, the Consumer Financial Protection Bureau’s (CFPB) acting director, just can’t stop winning. Not only is he reining in the CFPB’s regulatory excesses and saving taxpayer money, but the agency’s leftover Democrats are officially giving up their efforts to undermine his reforms.

    In light of President Trump’s recent nomination of budget official Kathy Kraninger to replace Mulvaney, the CFPB’s longtime shadow director is leaving the agency for good. Leandra English, who was appointed acting head of the CFPB by former director Richard Cordray before his departure, stepped down from her position this week. Through her attorney, English also announced plans to drop her legal challenge against the agency. For months, she had been posturing to replace Mulvaney and keep the CFPB under the Democrats’ control.

    Of course, English and other Democrats wouldn’t have been in such a precarious position if the CFPB wasn’t subject to the whims of White House leadership. Sen. Elizabeth Warren (D-MA) and other liberal Democrats intentionally designed the agency to operate outside of congressional oversight. While Congress is free to question CFPB officials and request information, the agency does not have to alter its practices based on congressional inquiries or prove its worth to Congress through the normal appropriations process. In fact, the CFPB is the largest federal agency that does not report to Congress.

    This made sense to Warren when President Obama was in power, but it blew up in her face when President Trump was elected. It’s a lesson for Democrats: Ignore checks and balances at your own peril.

  2. CFPB Finally Moves to Reconsider Payday Rule

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    The Consumer Financial Protection Bureau (CFPB) recently supported a motion for reconsideration of the “payday rule,” putting one of Richard Cordray’s most onerous mandates on the chopping block. Mick Mulvaney’s CFPB described the rule as “arbitrary and capricious.”

    They’re right to reconsider it. The “payday rule” would impose burdensome regulations on short-term lenders and make it more difficult for low-income Americans to secure credit on short notice. The mandate would require payday lenders to verify a borrower’s income, major financial obligations, loan history, and other information before providing cash, slowing down the transaction process and reducing the number of loans issued.

    For years, Cordray’s CFPB misled consumers about payday interest rates to undermine the short-term loan industry. A two-week payday loan of $100 generally carries a $15 finance fee, which makes sense given that payday borrowers often bring riskier credit histories to the table. The quick turnaround of payday loans also explains the $15 fee, but the CFPB long equated it to “an annual percentage rate (APR) of almost 400 percent.” This, according to Cordray and other liberals, leaves borrowers in a vicious “debt trap.”

    Which also isn’t true. A 2009 study from Clemson University found that an increase in the payday lending does not lead to a higher rate of bankruptcy.

    Restricting access to credit is the wrong way to go. Nearly 60 percent of Americans can’t cover a $500 unexpected expense. Mulvaney’s CFPB is right to stick up for them.

  3. Mick Mulvaney Strives to Rein In Rogue Agency

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    Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), recently pledged to reduce the regulatory oversight of the agency. Mulvaney plans to create an “office of cost benefit analysis” to weigh the economic cost of CFPB enforcement actions, not to mention agency operational costs.

    The heightened scrutiny is long overdue. After years of bureaucratic excess under former CFPB director Richard Cordray, the agency has become the poster child of the Washington swamp. In 2011, the CFPB employed 58 workers. In 2017, the agency had nearly 1,700 employees on payroll—a roughly 2,750 percent increase in a matter of several years.

    And the CFPB’s workforce—funded by the American taxpayer—does not come cheap. The agency currently boasts more than $333 million in annual personnel compensation and benefit costs, in addition to roughly $20 million in travel costs. This equates to over $205,000 per employee!

    As operational costs have ballooned, so has the toll of CFPB enforcement actions. Since its inception, the agency has ordered more than $5 billion in penalties, affecting banks, mortgage companies, payday lenders, and other employers.

    Mr. Mulvaney has his work cut out for him.

  4. Liberal Attack Dogs Target Mick Mulvaney

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    If you’ve stumbled across the website, feel free to keep surfing. The website was recently launched by a coalition of left-wing activist groups to mislead the public about the Consumer Financial Protection Bureau and its acting director, Mick Mulvaney.

    While the coalition—which includes Allied Progress, Americans for Financial Reform (AFR), and the Center for Responsible Lending (CRL)—touts the website as an “educational resource,” the rhetoric is anything but impartial. On one page, the coalition describes Mulvaney as a “payday industry puppet” and criticizes him for supporting “financial bottom-feeders.” On another, the coalition criticizes his “anti-consumer agenda.”

    The coalition only offers an education on left-wing activism. Allied Progress is run by Karl Frisch, a self-described “progressive” and longtime Democrat. According to his bio, he has “worked for a host of Democratic candidates, party committees, and progressive advocacy organizations on the local, state, and national levels.” AFR is hardly less partisan: The group’s executive and steering committees feature a host of union officials, liberal think tank representatives, and even a member of National People’s Action—a socialist group that advocates for universal healthcare and “climate justice.” And don’t forget CRL, which is funded by George Soros, the Ford Foundation, and other liberal mega-donors.

    The “Consumers Under Attack” campaign’s goal is not to educate us. It’s just to smear Republicans.

  5. Mulvaney Criticism Ignores Cordray CFPB’s Cozy Activist Relationships

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    The AP recently claimed the Consumer Financial Protection Bureau (CFPB)—now under the leadership of White House Budget Director Mick Mulvaney—boasts a “cozier relationship between industry and regulator.”

    But what about Richard Cordray’s CFPB? For years, the agency maintained a cozy relationship with activist groups hell-bent on punishing payday lenders and other industries.

    One example is the Center for Responsible Lending (CRL), which routinely secured closed-door meetings with Cordray’s team. The group even provided an initial draft of a proposed small-dollar lending rule to the CFPB. According to a Politico report:

    The Center for Responsible Lending spent hours consulting with senior Obama administration officials, giving input on how to implement the rule that would restrict the vast majority of short-term loans with interest rates often higher than 400 percent. The group regularly sent over policy papers, traded emails and met multiple times with top officials responsible for drafting the rule.

    The National Consumer Law Center—another liberal advocacy group—“worked with the agency to help craft the [payday] proposal.” That’s right: Under Cordray, special interest groups effectively formalized government mandates worth tens of millions of dollars.

  6. CFPB Finances Under Fire

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    Richard Cordray may be running for governor in Ohio, but he left the Consumer Financial Protection Bureau (CFPB) in shambles. More than 25 free-market organizations, including Americans for Tax Reform and FreedomWorks, have asked CFPB Acting Director Mick Mulvaney to audit the agency’s finances.

    Jason Pye, vice president at FreedomWorks, had the following to say: “Every aspect related to the CFPB should be put on the table, and what we can do through administrative action, either through the audit process or whatever rollbacks we need to do, we should do it.”

    For years, the agency escaped congressional oversight, unilaterally issuing broad regulations that overburdened employers and employees alike. Under Cordray’s watch, the U.S. Court of Appeals for the District of Columbia Circuit described the CFPB as “unconstitutionally structured” and a “gross departure from settled historical practice.” In U.S. Circuit Judge Brett Kavanaugh words: The CFPB’s structure “poses a far greater risk of arbitrary decision making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency.” The Department of Justice (DOJ) even filed court papers asking a federal appeals court to order the restructuring of the CFPB. The DOJ argued that the agency’s structure came into a separation-of-powers issue, since Cordray wasn’t sufficiently answerable to the White House.

    An audit is long overdue. It’s time to hold the CFPB accountable, and see where taxpayer money’s been going all these years.

  7. New CFPB Renovations Hit $124 Million

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    The Consumer Financial Protection Bureau’s (CFPB) Washington, D.C. headquarters is in the middle of massive renovations—and expensive ones at that.

    As the Daily Caller’s Richard Pollock recently reported, renovation costs for the new CFPB headquarters have skyrocketed, posting 25 percent in cost overruns. Original cost estimates for the agency’s renovation came in at $55 million, but the CFPB ran up the proposed cost to $216 million. The proposal was so egregious that the Federal Reserve Inspector General rejected it in 2014, claiming there was no “sound basis” for the estimated figure.

    As renovation costs continued to escalate, the project was ultimately taken out of the CFPB’s hands and transferred to the General Services Administration (GSA). GSA’s budget, however, was nearly double initial estimates, hitting $99 million. According to the Daily Caller investigation, the GSA’s budget ballooned to more than $124 million in the end.

    CFPB employees have plenty to be thankful for. In Pollock’s words: They now “come to work in a building that features many high-end touches, including lounge seats for their plaza deck, sunken garden areas, male and female fitness rooms, and credenzas with quartz surfaces and premium drywall.” The agency even spent $88,000 for bike racks and parking striping in the garage.

    But White House Budget Director Mick Mulvaney, the acting CFPB director, is rightly standing up for taxpayers: “Some of the obvious questions I asked myself when walking into the renovated Bureau headquarters on my first day as Acting Director were: Who initially authorized these renovations, were they absolutely necessary, and were adequate cost controls in place? As I begin to focus on the Bureau’s budget, I hope to discover the facts behind these excesses and help ensure abuses won’t happen again.”

    If there is a Washington swamp, then the CFPB is its poster child. Taxpaying Americans are rooting for Mulvaney to drain it.

  8. Richard Cordray Leaves Behind Shoddy CFPB Legacy

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    Richard Cordray has hit the campaign trail in Ohio, where he’s running for governor in 2018. But the former director of the Consumer Financial Protection Bureau (CFPB) leaves behind a shoddy legacy in Washington, D.C.

    Under Cordray’s watch, the CFPB turned into one of Washington’s most politically biased federal regulators. According to Federal Election Commission data, 100 percent of political contributions made by CFPB employees during the 2016 election cycle were sent to Democratic candidates. Even the Obama administration’s Justice Department was more ideologically diverse. This political bias skewed the agency’s hiring process. According to Ronald Rubin, a former CFPB enforcement attorney, Republican applicants were regularly denied agency jobs. “As screening techniques improved, Republicans were more easily identified and rejected,” Rubin has said, resulting in a culture of “political discrimination.”

    And don’t forget the CFPB’s unconstitutional structure. The U.S. Court of Appeals for the District of Columbia Circuit has claimed the CFPB’s structure “poses a far greater risk of arbitrary decision making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency.”

    As Cordray pitches Ohio voters, the CFPB may not be his best selling point.

  9. How the CFPB Targets Minority Communities

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    Minority communities, beware of the Consumer Financial Protection Bureau (CFPB).

    This week, U.S. Hispanic Chamber of Commerce President and CEO Javier Palomarez published an op-ed column explaining why the CFPB’s recent rulemaking on small-dollar loans ultimately puts minority entrepreneurs at risk. By imposing numerous restrictions on small-dollar lending, the rogue agency will inevitably make it more difficult for small business owners to secure the credit they need. In Palomarez’s words:

    The United States Hispanic Chamber of Commerce (USHCC) has long warned the CFPB of the consequences of restricting access to small-dollar credit. The USHCC represents 4.4 million Hispanic-owned businesses, which create jobs and contribute more than $700 billion to the U.S. economy. USHCC members depend on access to capital to thrive, but in many cases traditional banking institutions don’t operate as extensively within minority communities. In fact, the number of small community banks declined by 14 percent between 2010 and 2014. Small-dollar lenders are therefore often one of the only sources of credit available within many communities.

    Even the agency estimates that its rule would reduce small-dollar lending store fronts by nearly 70 percent. Other research pegs the number closer to 85 percent. This ultimately ends up hurting the employees and customers who depend on small business to survive and thrive.

    Given the fact that nearly half of Americans cannot cover an unexpected expense of $400, the CFPB’s attack on credit is deeply troubling and destructive to the U.S. economy. Memo to the CFPB: Lay off the American people.

  10. Richard Cordray Uses Government Email for Politics?

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    In late July, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray’s plan to run for Ohio governor leaked. Within days, Cordray received a message with an offer to help with his potential 2018 campaign, which he then forwarded to a redacted email address.

    According to the Washington Free Beacon, “an individual calling herself Debbie” wrote to Cordray’s government email account after learning about his plan to run in Ohio. Cordray then forwarded the message to another account. Kendra Arnold, executive director of the Foundation for Accountability and Civic Trust, claims the email exchange raises questions over Cordray’s handling of a government email address and the Hatch Act, which prohibits federal employees from using government resources for political activities. According to Arnold, “Simply receiving a partisan email and forwarding it to your own personal account is not a violation of the Act. In this case though, we do not know who Cordray forwarded the email to because of the redaction.” She continues: “The fact that the email was about Cordray running for office makes it incumbent on Cordray to explain.”

    We’re waiting for an explanation, knowing that Cordray has long overseen a politically biased CFPB. According to Federal Election Commission data, 100 percent of campaign contributions made by the agency’s employees went to Democratic candidates. Even the Obama administration’s Justice Department was more diverse in its workforce’s political preferences.