Surrounded by the chaos that never seems to end, it might be difficult for consumers to know what’s happening with the Consumer Financial Protection Bureau.
The Consumer Financial Protection Bureau (CFPB) was created in the wake of the 2008 financial crisis as a bulwark to protect consumers against a wide variety of predatory business practices. But in recent years, the CFPB has both been under intense scrutiny and working through a significant amount of turmoil.
That turmoil seemed to reach a boiling point in June of 2018, when acting CFPB director Mick Mulvaney fired the entire CFPB consumer advisory board. The move was widely criticized and plainly aimed at dismantling the powers of the CFPB more broadly.
Since then, Mulvaney has moved on to become the White House acting-chief-of-staff. That’s left a lot of people wondering about what’s currently happening with the CFPB consumer advisory board, or in which direction the CFPB is moving more generally.
A Rocky Term for Mick Mulvaney
Mick Mulvaney was appointed acting director of the Consumer Financial Protection Bureau in November of 2017, leading to immediate confusion and conflict. Because the previous director of the CFPB resigned, some rules and regulations suggested that previous Deputy Director Leandra English should serve in the acting director capacity—at least until a permanent director could be confirmed by Congress.
For a short while, both Mulvaney and English were recognized as acting directors of the CFPB. However, a court intervened and ruled in favor of President Trump’s appointment of Mulvaney. As a result, English resigned from the Consumer Financial Protection Bureau.
Mulvaney’s tenure as acting Director of the CFPB was marked by concerted and intentional efforts to disempower the CFPB as broadly and profoundly as possible.
Consumer Advisory Board Fired
Mulvaney’s efforts to undermine the mission of the CFPB seemed to reach their peak in June of 2018, when he summarily fired all members of the Consumer Advisory Board. Mulvaney fired the 25-member panel just days after some of its members had made comments that were critical of his tenure as acting director.
In the past, the Consumer Advisory Board (or CAB for short) had been responsible for providing valuable advice, ideas, and information to the highest levels of the CFPB. In theory, the CAB and the director of the CFPB are supposed to work closely together. Apparently, that wasn’t happening, and 11 CAB members held a press conference in which they criticized the overall direction of the CFPB.
Mulvaney’s office had said that the CAB would be reconstituted the following fall, but that none of the current board members could reapply for the position. For many outsiders, Mulvaney’s term as Director of the CFPB was marked by a concerted effort to defang the institution, and analysts saw the CAB firing as less about punishing individual board members and more about undermining the basic mission of the CFPB.
Raising Red Flags
That’s why the CAB firing raised a significant number of red flags. Mulvaney seemed to be signaling that the basic mission of the CFPB was changing. In the past, the bureau had been committed to holding businesses accountable, especially when they exhibited predatory tendencies and behaviors. Mulvaney’s tenure seemed dedicated, under the auspices of “smaller government,” to dismantling the protections that had been popular amongst consumers.
CAB Decision Reversed
In December of 2018, Mulvaney was selected to be the acting White House Chief of Staff by the Trump administration. This change in position meant that Mulvaney would be leaving his role as director of the CFPB. As a result, the new CFPB Director became Kathleen Kraninger.
Upon taking over, Kraninger announced several new initiatives and changes at the CFPB. One of the first things she mentioned is that Mulvaney’s decision regarding the Consumer Advisory Board would be reversed. So, currently, the CAB is still a vital part of the Consumer Financial Protection Bureau and continues to provide valuable advice, information, and expertise.
Kraninger’s rhetoric seemed to indicate a new direction for the CFPB, somewhere between Mulvaney’s slash-and-burn approach and the previous administration’s commitment to consumers. Whether Kraninger’s approach ends up helping consumers in the long run is difficult to foresee. Most analysts are taking a wait-and-see approach.
The Legacy of the Consumer Financial Protection Bureau
It’s important to note that the overall mission of the CFPB should theoretically remain unchanged, no matter which administration is in charge of Washington. Ideally, the agency is there to ensure consumers are protected and that business and corporations follow the law.
That’s why it’s important to encourage the CFPB to enforce its own rules and regulation and ensure that consumers—not corporations—come first.
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