Consumer Watchdog Agency Has Taken No Enforcement Action Under Trump, New Report Finds

By Molly Olmstead, Slate

11 April 18

 

new report by the Associated Press has found that the Consumer Financial Protection Bureau, the federal consumer watchdog agency, has not taken a single enforcement action against any banks, credit card companies, debt collectors, or finance companies since the start of the Trump administration.

That record of inaction, according to the CFPB’s own data, obtained by a Freedom of Information Act request, differs markedly from the agency’s record under the Obama administration, when it was issuing on average two to four actions a month, according to the Associated Press.

Mick Mulvaney, the White House budget director and acting CFPB director who once called cutting aid to the poor “compassionate,” promised from the very beginning he would scale back the agency’s enforcement actions, and it appears that by scale back, he really meant freeze. He had given consumers plenty of warning, though. In 2015, he said in a House committee hearing, “I don’t like the fact that CFPB exists, I will be perfectly honest with you.” As a member of the House, he co-sponsored a bill to eliminate the bureau. As a result, few were surprised in December when the agency’s mission statement was updated to list, as its top priority, rooting out “outdated, unnecessary, or unduly burdensome regulations.” In his first quarterly funding request as acting director, in January, Mulvaney requested zero dollars in funding for the agency.

The CFPB, created by the Dodd-Frank Act after the 2008 financial crash, serves to police predatory behavior from banks, lenders, student loan servicers, auto dealers, credit card companies, and other financial institutions. Since then, it had recovered about $11.8 billion for consumers. According to the AP, it has estimated that 1 in 10 Americans has received a form of reimbursement or relief because of its actions.

According to the AP, the agency is still conducting investigations and monitoring concerning behavior from financial institutions. In his semi-annual report to Congress, Mulvaney emphasized that the agency “will no longer go beyond its statutory mandate” and asked Congress to pass more laws restricting the agency’s powers. He will discuss the report in front of Congress on Wednesday and Thursday, according to the AP.

The streak of inaction might end soon, as it has been reported that the CFPB is seeking a record fine against Wells Fargo for its auto-insurance and mortgage-lending abuses. The CFPB fined Wells Fargo $100 million in September 2016 after a scandal over its opening of fraudulent accounts. The new fine will reportedly far exceed that number, possibly going as high as $1 billion.

Otherwise, in recent news, Mulvaney—who, again, considered the agency wasteful—has hired political appointees at salaries that far exceeded their previous ones, with four making nearly $300,000 a year. He also attempted to hide a government analysis indicating how a proposed rule change would allow restaurant owners to pocket their employees’ tips.