The Consumer Financial Protection Bureau released its annual report on Monday, and it includes four legislative policy recommendations that would erode the agency’s independence and make it more beholden to political institutions.
First, Acting Director Mick Mulvaney is recommending that Congress appropriate the Bureau’s funding rather than the Federal Reserve. Second, he seeks legislative approval for “major bureau rules.” Third, under his plan, the director could be fired by the president at will rather than needing a for-cause justification. Finally, Mulvaney is requesting Congress create an independent inspector general for the bureau.
Mulvaney will be speaking to Congress next week to advocate for these changes but he’ll be up against a Democratic minority determined to stop these changes from moving forward, according to reports.
Notably, his plan does not call for a bipartisan commission as others in the industry and in Congress have. Last month, a bipartisan group of Democrats and Republicans introduced a bill that would change the CFPB’s leadership structure into a five-member panel.
Richard Hunt, president and chief executive of the Consumer Bankers Association, expressed an appreciation for Mulvaney’s plan but reiterated the association’s support for a commission.
“We look forward to hearing further details from Acting Director Mulvaney on his policy proposals in his upcoming testimony before Congress,” Hunt said in a public statement. “We strongly believe an independent, bipartisan commission at the CFPB – not subject to the political shifts of changing administrations – is the best way forward to provide for accountability, certainty, and stability at the CFPB.”
Additionally, the report reviews the bureau’s actions from the past year including some guidance and consent order in auto finance. A standout from the report is the inclusion that the CFPB, “continues to administer prior fair lending enforcement actions,” and goes on to cite the 2013 consent order against Ally Financial Inc. that set a precedent for dealer markup.
This reaffirmation comes at a time when Mulvaney is stripping the fair lending office of its enforcement powers, Congress is considering a repeal of the rule, and lenders are abandoning flat-rate policies previously pushed by the bureau.
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