After roughly one full year at the helm of the Consumer Financial Protection Bureau, Mick Mulvaney stepped aside last month when Kathy Kraninger was confirmed by the Senate as the new director of the bureau. It remains to be seen precisely how Kraninger’s leadership will affect the bureau, but the record of Mulvaney’s tenure can now be assessed.
Mulvaney took the helm of the CFPB and immediately set a new and more restrained tone than his predecessor, Richard Cordray. An Obama appointee, Cordray aggressively pushed the envelope of the agency’s enforcement powers. Despite claims that the bureau had no statutory authority over cellular providers, Cordray brought enforcement actions against them for adding “deceptive” charges to customer bills. When a $6.2 million administration penalty was levied against mortgage servicer PHH, Cordray said it wasn’t punitive enough and increased the penalty to $109 million, a decision that landed the bureau in court.
Mulvaney began his term promising a more “humble” CFPB. Upon taking office, he halted all enforcement actions and reviewed every one the bureau had ever taken and all of those that were in process. Several actions, most notably those against several payday lenders, were dropped. Those that were already in litigation he allowed to play out. Penalties handed out under Mulvaney often were much smaller than what might have been expected under the previous regime. In some cases, the announced penalties were reduced because firms claimed they could only afford to pay the fine and remain in business.
A recent review of enforcement actions by Bloomberg Law reported that the CFPB had only three public enforcement actions in the third quarter of 2018 compared to eight in the same period of 2017. Those three enforcement actions resulted in $1.6 million in penalties compared to $7.3 million in penalties for the third quarter of 2017.
In addition to the slowdown in enforcement actions, Mulvaney also signaled a new direction by making significant changes to the bureau’s operations. He reined in the CFPB’s Office of Fair Lending and Equal Opportunity by taking away its enforcement powers and making it a part of the director’s office. The CFPB also no longer supervises banks and other firms for compliance with the Military Lending Act after Mulvaney determined that the Dodd-Frank Act did not give the bureau the authority to do so. Finally, the bureau has changed how it utilizes civil investigative demands, the information requests that are sent to companies signaling that an investigation is underway. Mulvaney has made them more limited and focused than in the past.