“He was illegally appointed by the president,” said Rep. Maxine Waters (Calif.), ranking Democrat on the committee. “I want to be very clear that Democrats’ participation in this hearing is not in any way an acknowledgment of Mr. Mulvaney’s legitimacy at the consumer bureau.” (That issue is still being fought in court.)
Since taking control of the bureau, Mulvaney has drawn Democrats’ ire by dropping a lawsuit against a payday lender, stripping enforcement powers from a CFPB unit responsible for pursuing discrimination cases and proposing that the agency’s powers be curtailed. Several lawmakers noted that the bureau had not fined or sued a single company during the past five months of Mulvaney’s leadership. Under its previous leadership, the CFPB announced three or four cases a month.
“We have essentially taken the cop off the beat,” said Rep. Carolyn B. Maloney (D-N.Y.). “Are you telling me that every single financial institution in America has suddenly snapped into full compliance?”
Despite having not filed any new lawsuits, Mulvaney said, the CFPB will enforce the law, though he said he had a different approach than his predecessor and intended to be more deliberative. The CFPB is still litigating 25 cases that were already filed, and there are typically 100 active investigations, Mulvaney said. “We’ve not filed any lawsuits since I’ve been there,” he said. “That doesn’t mean we’re not supervising and enforcing. We’re still going after bad actors.”
And despite dire warnings from some Democrats and consumer advocates, he said, “I have not burned the place down.”
One of the tensest moments of the hearing came when Rep. Keith Ellison (D-Minn.) questioned Mulvaney’s decision to frost the glass around his offices. Mulvaney has preached the need for the CFPB to be more transparent, Ellison said, “but you have obscured yourself, physically. I find that to be ironic.”
Mulvaney said the alteration, which involved 13 offices and cost about $3,500, was originally proposed under his predecessor. Besides, he shot back, the public couldn’t peer into Ellison’s offices. “How transparent is the door to your office, Mr. Ellison?” he asked. “I have been to your office. I can’t see into it.”
The hearing marked a role reversal for Republicans, who spent years criticizing the CFPB as too aggressive. This time, conservative lawmakers heaped praise on Mulvaney, who as a Republican congressman from South Carolina served on the committee and helped sponsor legislation to get rid of the CFPB.
“We welcome home Mick Mulvaney, a highly respected former member of this very committee,” said Rep. Jeb Hensarling (R-Tex.), chair of the committee and one of the CFPB’s fiercest critics. The CFPB remains an “unaccountable” agency with too much power, Hensarling said, but there was now one major distinction: “Acting Director Mulvaney acts lawfully. What a welcome change.”
Mulvaney landed at the top of the CFPB after Richard Cordray, its first director, stepped down in late November. The appointment immediately drew pushback from Democrats and consumer advocates, in part because of Mulvaney’s previous attacks on the agency. The agency is a “joke … in a sick, sad way,” he told the Credit Union Times in 2014.
Several lawmakers asked Mulvaney whether he would disavow his previous statements, which Mulvaney declined to do. “You were clearly one of the people who was most hostile to the creation and operation of the Consumer Financial Protection Bureau,” said Rep. Stephen F. Lynch (D-Mass.).
“It is fair to say that I was hostile to the existence of the bureau,” Mulvaney responded.
“It shouldn’t come as a surprise that many on our side of aisle … would see you sort of as the fox in the henhouse,” Lynch said.
Mulvaney quickly replied, “That doesn’t surprise me at all.”
Several Democratic lawmakers also questioned whether Mulvaney could properly serve as acting director of the CFPB while simultaneously heading the Office of Management and Budget — two full-time jobs, they said, that needed someone’s full attention. Managing two offices does cause “a great deal of frustration for both of my executive assistants,” Mulvaney acknowledged.
“That is why you shouldn’t be there,” Rep. Nydia M. Velázquez (D-N.Y.) shot back.
“I’ve got two jobs. That’s enough for me,” Mulvaney said. “I’m happy with the two I’ve got.”