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CFPB Acting Director Asks Congress to Curb Power of Agency

In testimony before the House Financial Services Committee, Consumer Financial Protection Bureau ("CFPB") Acting Director Mick Mulvaney reiterated several recommendations to restrain the power of the agency. The recommendations were detailed in a recently issued CFPB Semi-Annual Report.

Mr. Mulvaney asserted that the CFPB will no longer practice "regulation by enforcement," meaning the CFPB will not bring enforcement actions to establish regulatory standards. Mr. Mulvaney argued that although the CFPB "will continue to enforce the law," now "people will know what the rules are before the Bureau accuses them of breaking those rules." According to Mr. Mulvaney, going forward the CFPB will "recognize free markets" and take a "prudent, consistent, and humble approach" to law enforcement. He also stated that the CFPB intends to, among other initiatives, (i) provide clear guidance for regulated entities, (ii) more thoroughly analyze potential costs and benefits to consumers and regulated entities, (iii) reconsider elements of rules that may be burdensome or limit consumer choice, and (iv) review various aspects of the 2015 HDMA rule, including reporting thresholds and transactional coverage.

Representative Maxine Waters (D-CA) questioned the validity of Mr. Mulvaney's appointment to lead the CFPB and derided his agenda. She claimed that Mr. Mulvaney has allowed the CFPB to become "a safe haven for payday lenders" by halting implementation of the payday rule, withdrawing CFPB actions against payday lenders, and stopping an investigation into allegedly abusive installment lending practices.

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