WASHINGTON–With uncertainty now surrounding who is leading the Consumer Financial Protection Bureau, CUNA and NAFCU are making no secret of who they believe is in charge: Mick Mulvaney.
Mulvaney was named acting director of the CFPB over the weekend by President Trump. But, as CUToday.info reported here, Leandra English, who was named deputy CFPB director by Richard Cordray prior to his resignation as director of the Bureau, has filed suit to block Mulvaney. Both Mulvaney and English showed up for work on Monday and both claimed to be the Acting Director.
The issue the courts will need to decide is which law(s) is applicable. The Dodd Frank Act, which created the CFPB, has explicit language outlining how leadership is to be handled at the agency, which is the basis for English’s lawsuit.
In a conference call with the media, CUNA’s Ryan Donovan made clear the trade group believes Mulvaney is rightly the acting director and suggested the current dispute illustrates why the leadership structure of the CFPB needs to change.
“A lot of times when folks talk about the CFPB and its current structure they talk about how important it is for the Bureau to be independent and how its structure removes the Bureau from political structure,” said Donovan, CUNA’s chief political officer. “But Cordray’s actions expose the flaws of the structure but also how politicized the position has become.”
What the turmoil has demonstrated, stated Donovan, is the need for Congress to change the law and create a multi-person board to oversee the CFPB, something CUNA has long advocated for.
Demonstrating its position that Mulvaney is legally the new leader of the CFPB, CUNA has addressed a letter to him in the role, the full copy of which can be found in CUToday.info’s The Gov here.
In that letter CUNA reiterates several positions it has outlined in previous letters, including that the CFPB not finalize any new regulatory requirements affecting credit unions unless designed to provide regulatory relief or to ensure “Wall Street banks and others pay a huge price harm to consumers”; that a freeze be placed to any new regulatory requirements to give credit unions time to “adjust” to all the new rules of the past six years”; that the CFPB allow NCUA to monitor credit unions for compliance with consumer regulations, including CUs of more than $10 billion in assets, and that the CFPB should continue to encourage feedback from consumers through its Credit Union Advisory Council.
In one of his first actions, Mulvaney did issue an order freezing any new rules, but the applicability of that order remains to be determined.
Finally, as it has done for some time, the CUNA letter urges Mulvaney to have the CFPB use its exemption authority to exempt credit unions from its rules and to stop over-burdening small, less complex financial institutions such as credit unions. To date, said Donovan, “the CFPB has filed to fully use this authority to the detriment of credit unions.”
“Acting Director Mulvaney has in the past repeatedly demonstrated his belief in the exemption authority, including while he was in Congress,” said Donovan.
NAFCU, as well, sent a letter addressed to Mulvaney at the CFPB that outlines several areas in which the Bureau can provide CUs with relief.
"NAFCU continues its work with the CFPB to reduce unnecessary burdens on credit unions to bring them much-needed relief,” said NAFCU President and CEO Dan Berger.
“NAFCU was disappointed that under previous leadership, credit unions were pulled into a regulatory net designed to prevent bad actors from harming consumers. We support Acting Director Mick Mulvaney as he assesses the regulatory burden placed on credit unions. Long term, we hope Congress will consider the benefits of changing the structure of the Bureau to a bipartisan commission, which would provide stability to the bureau.”
In NAFCU’s letter to Mulvaney, the trade association pointed to three key areas in which the Bureau can provide relief to credit unions:
- Increased use of the Bureau’s statutory exemption authority
- A freeze on rulemakings that would add to credit unions’ compliance burden, including any debt collection proposal
- An immediate one-year delay of the Bureau’s looming Home Mortgage Disclosure Act implementation date
In the brief letter, signed by Berger, NAFCU informed Mulvaney that more details on each of the three areas and others can be found in NAFCU’s response letter to the CFPB’s strategic plan, which was sent Nov. 17.
Meanwhile, New York Credit Union Association President/CEO William J. Mellin issued a statement that, “The decision by the leadership at the CFPB to try to extend its control over the Bureau, even after the director has resigned, is of questionable legality and undermines much of what the Bureau claims to stand for. A prolonged fight over who is actually in charge of the Bureau could mean that American consumers and businesses will be subject to months of uncertainty about which regulations apply to whom and how they should be interpreted. And if the holdover leadership continues in this fight, they would simply be confirming what the CFPB’s harshest critics have claimed for years: that the Bureau has too much power, is accountable to no one and—as presently constituted—may violate the Constitution.”