Of all the elements of the Dodd-Frank legislation, a vast regulatory apparatus meant to prevent the excesses that created the Wall Street Crash of 2008 and the years of Great Recession that followed it, the most conspicuously successful has been the CFPB, the Consumer Financial Protection Board.
How successful? Well, since its creation in 2013, the CFPB has clawed back from predatory lenders and crooked bankers close to $12 billion and returned the money to consumers who had been ripped off.
The branch of the CFPB that gets that payback to the customers, the Civil Penalty Fund had distributed a total of $261.9 million to 232,000 harmed consumers in fiscal 2017, until last November, it suddenly stopped.
Have payments to victimized citizens resumed? My guess is the answer is no, they have not. The CFPB Press office won’t say, but really, if they were back the in business of making consumers whole, do you think they’d keep it a state secret?
That payout, almost $262 Million might sound impressive, but actually it epitomizes the little-guy-get-stuffed brand of the Trump Administration. In the 4 years before Trump took over, the CFP averaged payouts of close to $4 Billion a year, 15 times the rate achieved by Trump’s CFPB.
But what would you expect from an agency whose director Mick Mulvaney’s chief credential for the assignment – and is this not also a hallmark of the Trump brand? – was that he had tried for years to close the agency he would be running.
Trump’s big effort to close down the CFPB was to hire some legal lowbrows to argue that, because the Director was independent of the President and could only be fired for demonstrable cause, it was unconstitutional. The DC Circuit Court of Appeals blew that off, despite the dissent of one juridiculous judge who – in another case – had suggested that undocumented immigrants should not be considered “persons.”
If the Courts won’t kill the CFPB, it’s been left to Director Mulvaney to do it himself, using both of the empty heads he brings to his dual assignment as Trump’s Budget Director as well as CFPB Chief. As Director he effused to ask the Federal Reserve for spending money for the last quarter of 2017. Don’t need it, he said, we have $177 million in unspent funds, a kitty fund he called it, as if it didn’t represent projects canceled and jobs undone.
Then, as budget director, Mulvaney cut the 2018 CFPB budget request by roughly a quarter, which means, says Mike Calhoun, the president of the Center for Responsible Lending, “massive layoffs and disruptions,”. That would “make it hard for [the agency] to do its job.”
Calhoun is actually under-selling the destruction Mick Mulvaney is wreaking at CFPB. In a series of executive decisions, he has been making it virtually impossible for his own investigators and enforcement staff to do their job of protecting consumers.
Sat this for Mulvaney, he hasn’t been hiding what he’s up to. When he re-wrote the mission statement of the Consumer Financial Protection Board, he took out one word – “protection.”
Jesse Eisinger is a senior reporter and editor at ProPublica. He is the author of the “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives.”
In April 2011, he and a colleague won the Pulitzer Prize for National Reporting for a series of stories on questionable Wall Street practices that helped make the financial crisis the worst since the Great Depression. He won the 2015 Gerald Loeb Award for commentary. He has also twice been a finalist for the Goldsmith Prize for Investigative Reporting.
He was a regular columnist for The New York Times’s Dealbook section. His work has appeared in The New York Times, The Atlantic, The NewYorker.com, The Washington Post, The Baffler, The American Prospect and on NPR and “This American Life.” Before joining ProPublica, he was the Wall Street Editor of Conde Nast Portfolio and a columnist for the Wall Street Journal, covering markets and finance.
He lives in Brooklyn with his wife, the journalist Sarah Ellison, and their daughters.
An early take on the ethics of Wells Fargo management from ethicist Lee Ellis.
Predicting disaster for the CFPB was easy, but Jordan Goodman did his usual excellent job of it.