Under the Trump administration, the Consumer Financial Protection Bureau (CFPB) has seen its role diminished. Established in the wake of the 2008 recession by then-law professor Elizabeth Warren, the agency serves as a regulatory watchdog of consumer finance interest. It has taken enforcement actions against individuals and financial institutions on behalf of 31.1 million consumers and has provided $12.4 billion back to those consumers. Earlier this year, it imposed a $1 billion dollar fine on Wells Fargo for improperly charging consumers on mortgage and auto loans.

There have been partisan fights over the agency from the start, however. Republicans waited over two years to confirm the first CFPB director, Richard Cordray, who served until acting director Mike Mulvaney’s appointment in November 2017. They’ve presented numerous bills to curb the agency’s power and even suggested abolishing it in their 2016 party platform.

“People wondered when I got — when I took the job if I was going to try and shut the place down, and I told them no, because I can’t,” Mulvaney said at the American Bankers Association (ABA) summit earlier this year. While not shut down, the CFPB has curbed its actions on all fronts.

A smaller stick

Enforcement actions against financial institutions have dramatically fallen under Mulvaney. “I won’t talk too much about regulation by enforcement, but the short version is we’re not doing it anymore,” he said at the ABA summit. The agency has brought only ten and even dropped a case against payday lenders charging interest rates as high as 950 percent.

Enforcement actions before and under

acting director Mulvaney

55

42

35

33

26

10

0

‘18

2013

‘14

‘15

‘16

‘17

Enforcement actions before and under

acting director Mulvaney

55

42

33

35

26

10

0

‘18

2013

‘14

‘15

‘16

‘17

Enforcement actions before and under acting director Mulvaney

55

42

35

33

26

10

0

‘18

2013

‘14

‘15

‘16

‘17

Consumers received $70 million in the 2018 fiscal year from enforcement actions, compared with $161 million the previous year.

Mulvaney has instituted changes internally to blunt the flow of future regulatory action. Major reorganizations of the fair lending and student loan offices have refocused them away from enforcement. The agency is also revising payday lending rules, which many expect to be watered down.

A smaller agency

In the past fiscal year, the agency’s workforce shrunk by about 10 percent. Mulvaney was director for ten of those twelve months.

1.8K staff members

1,668

1,510

1.4

1,335

1.0

2013

‘17

‘18

fiscal year

1.8K staff members

1,668

1,510

1.4

1,335

1.0

2013

‘17

‘18

fiscal year

1.8K staff members

1,668

1,510

1.4

1,335

1.0

2013

‘17

‘18

fiscal year

The CFPB does not receive funding from Congress, which is common for financial regulatory agencies. Instead it is funded quarterly by the Federal Reserve. In Mulvaney’s third-quarter request for funds, he notes that “by design, this funding mechanism denies the American people their rightful control over how the Bureau spends their money,” a common Republican rallying cry against the agency. The prior quarter, he requested no funds, instead using money previously considered to be a reserve fund.

Requested funds

596

573

$563M

563

490

337

0

‘18

‘15

‘16

‘17

2013

‘14

Requested funds

596

573

$563M

563

490

337

0

‘18

‘15

‘16

‘17

2013

‘14

Requested funds

596

573

$563M

563

490

337

0

‘18

‘15

‘16

‘17

2013

‘14

A quieter agency

Nearly a quarter of CFPB staff is dedicated to consumer finance research, consumer education and engagement. Reports have included “A nationwide look at how student debt impacts older adults” and “The geography of credit invisibility.” Recent blog posts cover topics such as scams targeting veterans and free credit freezes. But the agency has been much quieter under Mulvaney, releasing fewer reports, blog posts and news releases.

Agency publications before and

during Mulvaney’s tenure

302

284

263

14

Mulvaney

took office

Nov. 25

255

259

125

0

2013

‘14

‘15

‘16

‘17

‘18

Agency publications before and

during Mulvaney’s tenure

302

284

263

14

Mulvaney

took office

Nov. 25

255

259

125

0

2013

‘14

‘15

‘16

‘17

‘18

Agency publications before and during Mulvaney’s tenure

302

284

263

14

Mulvaney

took office

Nov. 25

255

259

125

0

2013

‘14

‘15

‘16

‘17

‘18

This drop in publications may not just be from a lack of resources. Former student loan ombudsman Seth Frotman alleged in his departure letter obtained by NPR that the agency had suppressed a report on suspicious bank account fees for college students.

A battle brewing in the House

Democrats are hoping to reverse the agency’s trajectory with their newfound majority in the House. “There’s a new sheriff in town,” says Rep. William Lacy Clay (Mo.), the Democrat in charge of the congressional subcommittee that oversees the CFPB. With Democratic control of the House starting in January, Clay says Democrats seek “to put the teeth back in [CFPB’s] enforcement capabilities.” It will be an uphill battle.

CFPB’s independent funding gives Congress fewer bargaining chips. A law could reverse Mulvaney’s administrative changes — and Rep. Maxine Waters (D-Calif.), expected chairwoman of the Financial Services Committee, introduced a bill in September to do just that — but it would be unlikely to pass the Republican-held Senate.

Most of the battle will take place in Financial Services Committee hearings, where Waters has called for resuming CFPB’s critical regulatory role. An investigation into student loan supervision will be near the top of the docket, as will reinstating the Consumer Advisory Board that Mulvaney dismissed. Last month Waters called for the Republican-controlled committee to investigate the CFPB’s “failure to protect student lenders,” as alleged in Frotman’s departure letter. Investigations are also likely in fair lending, a division overseen by Eric Blankenstein, whom The Washington Post identified in September as the anonymous author of a blog post years ago that questioned whether using the n-word was inherently racist and claimed the majority of hate crimes were hoaxes.

Whether CFPB changes course may depend on how much congressional oversight the agency can stomach. “For the most part, the administration doesn’t want to have to be hauled to Congress,” Clay says. That’s what House Democrats are banking on.

Data on CFPB funds and staff is from the agency’s annual financial reports. Enforcement actions are from the agency website, as are publications. 2013 is used as a starting year because it was the agency’s first full year of enforcement.