Resistance continues at the CFPB

Mick Mulvaney, Director of the Consumer Financial Protection Bureau, continues to face internal resistance to his recent appointment by President Trump.

Mick Mulvaney, Director of the Consumer Financial Protection Bureau, continues to face internal resistance to his recent appointment by President Trump.

Despite a favorable preliminary ruling from a federal court last month that denied a challenge to his appointment, he is facing organized dissent from a cadre of bureau employees calling themselves “Dumbledore’s Army,” a refence to the popular children’s Harry Potter books and movies.

The dissent is based upon the assumption that Mulvaney will radically change the CFPB. He has said that he will not “blow up” the bureau, but did point out that it “will be different, under my leadership and under whoever follows me.” Critics are quick to remember that he once denounced the CFPB as a “sad, sick” example of bureaucracy gone amok.

According to a report in the New York Times, there is a small group of employees who are “quietly resisting” Mulvaney. The article notes that “in some cases, conversations between staff that used to take place by phone or text now happen almost exclusively in person or through encrypted messaging apps.” They are reportedly using code names.

There is a deeper concern than mere pettiness to these communications. The reports of bureau employees using social media or messaging applications have raised security and compliance questions.

Last month, Cause of Action, a public interest group, filed a Freedom of Information Act request. The group is seeking “all records reflecting the total number of CFPB devices on which encrypted messaging applications,” and all communications containing the words “Dumbledore,” “Dumbledore’s Army,” “Snape,” “Voldemort,” and “He-who-shall-not-be-named.” Cause of Action is “concerned that these individuals may be using the encrypted messaging applications to avoid transparency laws in an effort to conceal their communications from internal and external oversight,” according to the FOIA request.

Under Cordray, the agency often took an aggressive stance toward regulating and punishing businesses. It extracted nearly $12 billion in refunds and canceled debts for 29 million consumers.

Mulvaney, however, has signaled a more industry-friendly touch. Upon his arrival at the bureau, he halted hiring, froze all new rule-making and ordered a review of active investigations and lawsuits. Some, he has indicated, will be abandoned, including the most recent CFPB rules regulating the payday loan industry.

Last month, Mulvaney hired six new administrators to help him change the bureau’s approach.