Leader of Watchdog Offers Advice to Defang It

“We had a hierarchy in my office in Congress,” Mulvaney, a former Republican lawmaker from South Carolina, told 1,300 bankers and lending industry officials at an American Bankers Association conference in Washington. “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”

At the top of the hierarchy, he added, were his constituents. “If you came from back home and sat in my lobby, I talked to you without exception, regardless of the financial contributions,” said Mulvaney, who received nearly $63,000 from payday lenders for his congressional campaigns.

Mulvaney, who also runs the White House budget office, is a longtime critic of the Obama-era consumer bureau, including while serving in Congress. He was tapped by President Donald Trump in November to temporarily run the bureau, in part because of his promise to sharply curtail it.

Since then, he has frozen all new investigations and slowed down existing inquiries by requiring employees to produce detailed justifications. He also sharply restricted the bureau’s access to bank data, arguing that its investigations created online security risks. And he has scaled back efforts to go after payday lenders, auto lenders and other financial services companies accused of preying on the vulnerable.

But he wants Congress to go further and has urged it to wrest funding of the independent watchdog from the Federal Reserve, a move that would give lawmakers — and those with access to them — more influence on the bureau’s actions. On Tuesday, he implored the financial services industry to help support the legislative changes he has requested.

Mulvaney said that trying to sway legislators was one of the “fundamental underpinnings of our representative democracy. And you have to continue to do it.”

The association, which invited Mulvaney to give the keynote address at its conference, strongly backs his efforts to consider the financial burdens on banks imposed by the bureau’s actions.

Asked about the comments, John Czwartacki, a spokesman for Mulvaney, said: “He was making the point that hearing from people back home is vital to our democratic process and the most important thing our representatives can do. It’s more important than lobbyists and it’s more important than money.”

In his remarks, Mulvaney also announced a series of moves intended to reduce the bureau’s power. The agency was championed by Sen. Elizabeth Warren, D-Mass., and Richard Cordray, who served as the bureau’s director from its inception until last year.

Such moves include cutting public access to the bureau’s database of consumer complaints, which the agency had used to help guide its investigations.

“I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government,” he said.

Mulvaney also said he would begin calling the Consumer Financial Protection Bureau by its official statutory name, the more obscure Bureau of Consumer Financial Protection. Administration officials said the rebranding was an attempt to diminish the agency’s public profile.

Mulvaney’s political appointees at the agency have asked The Associated Press, which sets the style standard for many publications and broadcasters, to change how it refers to the bureau.

“I’m trying to get in the habit of now saying the ‘BCFP.’ It’s really, really hard to do that when you’ve said the CFPB for so long,” Mulvaney told the bankers.

The consumer bureau was created by the 2010 Dodd-Frank Law as a way to prevent banks and other financial companies from preying on vulnerable consumers. But the bureau has become a target of Republican lawmakers, who complain that it has unchecked power and is too aggressive in trying to punish financial firms.

This article originally appeared in The New York Times.

Leader of Watchdog Offers Advice to Defang It

Enhance Your Pulse News Experience!

JOIN OUR PULSE COMMUNITY!