Under Trump, a voice for the American consumer goes silent

[GMDino]

https://apnews.com/c80a20db4a5942e7af9632b0cbf75700

Quote: In the 135 days since the Trump administration took control of the nation’s consumer watchdog agency, it has not recorded a single enforcement action against banks, credit card companies, debt collectors or any finance companies whatsoever.


That’s likely no fluke: Mick Mulvaney, appointed acting director of the Consumer Financial Protection Bureau in late November, promised to shrink the bureau’s mandate and take a much softer approach to enforcement, and records reviewed by The Associated Press indicate he has kept his word.

A review of a CFPB database obtained by the AP through a Freedom of Information request shows that the bureau issued an average of two to four enforcement actions a month under former Director Richard Cordray, President Obama’s appointee. But the database shows zero enforcement actions have been taken since Nov. 21, 2017, three days before Cordray resigned.

Before Mulvaney, the bureau used enforcement actions to extract billions of dollars in relief for consumers from financial companies and to stop companies from doing harm. Bank of America was ordered to return $727 million to consumers for deceptive credit card practices in 2015 — the largest award in the bureau’s history — but the CFPB has issued dozens of smaller actions to get relief for student borrowers, victims of debt collection companies and bank customers.

In the roughly seven years it has been in existence, the bureau has returned $3.97 billion in cash back to American consumers through enforcement actions and an additional $7.93 billion in other types of relief, such as lower loan balances or debt relief, based on the CFPB’s records. The bureau estimates roughly one of every 10 Americans has received some sort of reimbursement or relief due to the bureau’s enforcement work since it was created.

Despite that direct relief to consumers, Republicans — including Mulvaney when he was representing South Carolina in Congress — accused the bureau of overreach. Mulvaney once called the bureau a “sick, sad joke” of an agency.

Bureau watchers on both sides of the issue say that they don’t believe enforcement actions have stopped entirely, and supervision and investigations at the agency are still ongoing. In a statement, the CFPB said the slowdown is tied to a new administration taking over the bureau, adding that “it is our job to enforce the law, and we take it very seriously.”

“Assessing the legal risks of all pending enforcement actions is a critical part of the transition process and standard procedure for new leadership at enforcement agencies such as the Bureau. That review continues alongside the agency’s ongoing law enforcement work,” the statement said.

While consumer advocates expected fewer enforcement actions under a more business-friendly Trump administration, the fact that the database indicates they have stopped entirely raises concern that consumers have been left vulnerable. There were some periods under the Obama administration where bureau enforcement actions slowed, but those appear largely tied to the fact the agency was just getting underway. This is the longest stretch without enforcement actions in the CFPB’s history.

“Enforcement is very important,” said Lauren Saunders, associate director at the National Consumer Law Center, a consumer advocacy organization and a critic of Mulvaney. “If a company violates the law, it needs to be held accountable and called out instead of being quietly admonished through supervision.”

The bureau effectively has two main avenues it can use to check wrongdoing at banks and other financial companies.
One is supervision, which is typically confidential and more routine. The CFPB has full-time inspectors inside most of the nation’s largest banks who, when they see something that may not be illegal but still raises concerns, can speak privately with bank management. If an issue is more substantial, like a potential breach of consumer protection laws, the bureau can begin an investigation that can culminate in an enforcement order, which is basically a court order directing a company to stop illegal behavior and often carries a fine.

“Enforcement is one of the most important parts of CFPB, because of the signals it is able to send to markets,” Saunders said.

Whether or not enforcement has been slowed by the change in management, Mulvaney repeatedly has said he wants to significantly curtail the bureau’s operations, and the slowing of enforcement would be part of that.

“I made it clear that the Bureau will continue to execute the law, but will no longer go beyond its statutory mandate,” Mulvaney said in his semi-annual report to Congress. His report also called for Congress to pass laws further curtailing the bureau’s authority.

Mulvaney will appear in front of Congress on Wednesday and Thursday to discuss that report, and enforcement is expected to come up in questioning.

“My sense is things are moving forward in some way, but much more slowly than what was the historic pace of enforcement work,” said Joanna Pearl, legal director at the recently created Public Rights Project, who was chief of staff of the CFPB’s Office of Enforcement until January.

oh, btw...

https://apnews.com/9161730e4a1a4901a691c71bbcaaf56d

Quote:Mulvaney gives big pay bumps to his hires at consumer agency



NEW YORK (AP) — Mick Mulvaney, President Donald Trump’s appointee to oversee the Consumer Financial Protection Bureau, has given big pay raises to the deputies he has hired to help him run the bureau, according to salary records obtained by The Associated Press.
Mulvaney has hired at least eight political appointees since he took over the bureau in late November. Four of them are making $259,500 a year and one is making $239,595. That is more than the salaries of members of Congress, cabinet secretaries, and nearly all federal judges apart from those who sit on the Supreme Court.

The salary records came as part of a records request submitted by the AP earlier this year.

While most of the federal government follows a universal pay scale, some government agencies and departments have gotten waivers to use their own separate pay scales. One of those agencies is the Federal Reserve, the nation’s central bank. Since the CFPB is technically part of the Federal Reserve, its employees get paid at a higher scale than their general government counterparts.

The top salary under the general federal government pay scale is $134,776, not including adjustments for the higher cost of living in areas like New York City or Washington, D.C., according to the Office of Personnel Management. The top pay bracket for a Federal Reserve employee is $250,000.

Mulvaney, as Trump’s budget director, has long railed against government spending. One of his first directives as acting CFPB director was to announce he needed zero dollars in funding to run the agency, pledging to spend down the bureau’s surplus fund this quarter before requiring more money from the Fed — the CFPB is funded by the Fed and not through the traditional congressional budget process.

In his Jan. 17 letter to the Fed, Mulvaney said he was asking for zero dollars because of the need to be “responsible stewards of taxpayer dollars.” But that tight-fisted approach apparently was not used with his staff’s salaries. Further, it appears that at least two people that Mulvaney hired for his office are for positions that did not exist under the previous administration, at an additional taxpayer cost of $259,500 per employee.

Kirsten Mork, Mulvaney’s chief of staff, got a significant bump in pay for going to work at the CFPB. She made $167,300 in her job working for Rep. Jeb Hensarling on the House Financial Services Committee, according to LegiStorm, a website that tracks congressional salary data. She now makes $259,500 as chief of staff of the CFPB, according to bureau records.

Mork is making more than her predecessor, Leandra English, made while in that position under Obama administration CFPB Director Richard Cordray. English’s starting salary in her role as chief of staff under Cordray was $212,324, according to the office of Sen. Ron Johnson of Wisconsin. The New York Times obtained English’s salary as chief of staff earlier Thursday.

English is now deputy director of the bureau — on paper the second-most powerful job in the bureau, but she has largely been sidelined since Mulvaney took over. The bureau has declined to disclose English’s current salary, requesting that it be asked for through the Freedom of Information Act.

Another former congressional staffer, Brian Johnson, who also worked for the House Financial Services Committee, made $164,600 in his role there before going to the CFPB, according to LegiStorm. He now makes $239,595 as a “senior advisor” to Mulvaney, a position that did not exist under Cordray.

Eric Blankenstein, who oversees supervision, enforcement and fair lending for the bureau, previously was a lawyer for the Office of the U.S. Trade Representative making $153,730, according to federal salary data website FedSmith. He now makes $259,500, according to bureau records. Another Mulvaney appointee, Sheila Greenwood, who used to work in the Department of Housing and Urban Development making $179,700 a year, now makes $259,500.

Anthony Welcher, who worked outside government before becoming a director of external affairs for the bureau, is also making $259,500 a year. His position also did not exist under the previous administration, according to bureau records.

In a statement, a CFPB spokesperson blamed Cordray for the elevated salaries that Mulvaney’s appointees are making, saying “non-career staff are being paid on par with the career staff who directly report to them.” Mulvaney himself is not making a salary as acting director, and earns a salary as Trump’s budget director.

The spokesperson also said it is up to Congress to change the bureau’s structure and compensation practices.

Paid more to do less.

Trump is really draining that swamp.