Updated at 5:53 p.m. ET
The Consumer Financial Protection Bureau was created after the financial crisis to protect Americans from being ripped off by financial firms.
Now, President Trump's interim appointee to run the bureau, Mick Mulvaney, is making radical changes to deter the agency from aggressively pursuing its mission.
The CFPB on Monday unveiled
a new strategic plan to that end. In a message accompanying the plan for the years 2018 through 2022, Mulvaney wrote, "we have committed to fulfill the Bureau's statutory responsibilities, but go no further." The plan says the bureau should be "acting with humility and moderation."
This new direction is consistent with Mulvaney's other memos and statements and formalizes his plans for defanging the watchdog bureau and reshaping its mission, according to insiders and experts that NPR has talked to.
The CFPB is considered a powerful and independent watchdog. But many Republicans have wanted to shut it down since Day 1 because they think it's too powerful. Mulvaney is one of them. As a congressman, Mulvaney called the agency a "sick sad joke." He drafted legislation to abolish it. So people at the bureau were shocked when the president appointed him to run this consumer protection agency.
Within weeks of coming on board, Mulvaney has worked to make the watchdog agency less aggressive. Under his leadership, the CFPB
delayed a new payday lending regulation from going into effect and dropped an investigation into one payday lender that contributed to Mulvaney's campaign. In another move that particularly upset some staffers, the new boss also dropped a lawsuit against an alleged online loan shark called Golden Valley Lending. The suit says the lender illegally charges people up to 950 percent interest rates. It took CFPB staffers years to build the case.
"People are devastated and angry — just imagine how you would feel if years of your life had been dedicated to pursuing justice and you lose everything," says Christopher Peterson, a former Office of Enforcement attorney at the Consumer Financial Protection Bureau who worked on this particular case early on.
Peterson believes that had the lawsuit been pursued and the CFPB won, it could have clawed back money to help thousands of people who have allegedly been hurt by the lender.
People like Julie Bonenfant, 27, who does administrative work for the city of Detroit. Last year was a tough one for her — she broke up with her boyfriend, her car was stolen and she got behind on her rent. She found Golden Valley Lending online and and took out a loan, but she says she had no idea what she was getting herself into.
"I was literally facing eviction because I was so behind on my rent and I had no idea where I was going to come up with the money and it was just really rough," Bonenfant says. "It was just misleading. ... The way it was presented was ... I was going to make four large payments and then be done."
But after those four payments, the lender continued to take money directly out of her checking account. When she asked why, the lender told her she had agreed online to a lot more payments.
Bonenfant sent NPR a screenshot from the Golden Valley website. It says on her $900 loan, her scheduled payments in less than 12 months will total $3,735, or more than four times what she borrowed.
Bonenfant has so far paid more than $3,000 to Golden Valley and rung up more than $1,000 in overdraft fees at her bank.
When she showed it to her boss, he called the loan's terms "illegal."
Lawyers at the CFPB came to a similar conclusion. That's why back in April, the bureau sued Golden Valley Lending for unfair, deceptive and abusive business practices.
The lawsuit was moving forward until Mulvaney came on board, when it was suddenly dropped.
"Dismissal of this lawsuit shows an outrageous disregard for the rule of law," says Peterson, who calls the lender "one of the worst of the worst" for swindling many people around the nation out of tens of millions of dollars.
A key backer of Golden Valley was recently convicted of racketeering charges in a case involving another online lender, according to court documents. Given this history, Peterson wonders why Mulvaney dropped the lawsuit against Golden Valley.
"The Trump administration is just going to turn them loose and let them off the hook despite the fact they were making 950 percent interest rate loans to struggling families in ways that were illegal and unauthorized under both state and federal law," Peterson says.
Mulvaney declined requests for an interview. In an email, his press representative first said the decision to drop the Golden Valley lawsuit was made by "professional career staff" and not Mulvaney.
But several CFPB staffers that NPR spoke to say that's not true. The staffers, who spoke on condition of anonymity for fear of losing their jobs, say Mulvaney decided to drop the lawsuit even though the entire career enforcement staff wanted to press ahead with it.
After repeated questioning from NPR, Mulvaney's press person acknowledged that Mulvaney was indeed involved in the decision to drop the lawsuit.
In his new strategic plan and in memos to staff, Mulvaney has made it clear that he wants to rein in the bureau.
He says the previous director "pushed the envelope" and has said he wants the agency to have more "humility." He has also suggested that going after payday lenders that charge extremely high interest rates won't be a priority.
Some see this as Mulvaney's way of paying back supporters of his campaign.
"As a congressman he took $62,000 plus from the payday lenders. And now at the CFPB he's doing their bidding," says Karl Frisch, executive director of the consumer group Allied Progress.
Of course, Mulvaney's moves could be just conservative ideology for less regulation. But in either case, there appear to be plenty of unhappy customers who have gotten loans from Golden Valley.
Robert Rogers, who builds customized motorcycles and guns, says he was trying to help his retired mother in California after she got into one of these Golden Valley loans. The cost of the loan seemed really high, so he called the company.
Rogers says the person who answered the call from Golden Valley wouldn't answer his questions about what the interest rate on the loan was and just kept telling him he had to pay and even threatened him — saying he'd come to his house and get the money "by any means necessary."
"Pretty much every other word out of his mouth was F'in this or F'in that. ... It became like some kind of just really bad gangster movie," Rogers says.
Golden Valley declined an interview. The company is officially headquartered on an Indian reservation. In a court document, the company argues its loans are governed by tribal law.
The CFPB lawsuit disagreed, saying Golden Valley makes illegal loans across the country.
For her part, Bonenfant still hasn't paid off her debt to Golden Valley. And she feels betrayed by the president, whose appointee dropped the lawsuit.
"To be honest I'm really mad, really pissed, because I actually voted for Trump," Bonenfant says. "So knowing that his guy threw out this case that affects people like me, I feel kind of like stupid — just kind of like betrayed."
Mulvaney hasn't officially offered details about why the case was dropped. Meanwhile, staffers at the bureau say they are worried Mulvaney will block more of their efforts to go after shady financial firms. He is reviewing numerous ongoing lawsuits and investigations.
It’s no wonder that, when rumors began to swirl that White House chief of staff John F. Kelly might be on his way out, speculation about possible replacements quickly turned to Mick Mulvaney, currently the director of both the Office of Management and Budget and the Consumer Financial Protection Bureau. Whether or not Mulvaney ascends to Kelly’s position, he showed Sunday how adept he has become at selling President Trump’s big con.
Mulvaney’s appearances on
“Fox News Sunday” and
“Face the Nation” were a tour de force of confidently delivering outlandish statements. First, Mulvaney dealt with the resignations of two White House staffers over domestic abuse allegations, and the president’s complaints that now-departed staff secretary Rob Porter’s life was being ruined by “a mere allegation.” (In truth, besides multiple allegations from his ex-wives, Porter was denied a full security clearance because of a protective order against him in 2010.) Asked by CBS News’s Major Garrett whether the White House had “a lax attitude when it comes to the question of domestic abuse,” Mulvaney replied, “I think what you saw happened this week, Major, was completely reasonable and normal.”
Yes, “reasonable and normal.” Even the buttoned-up Garrett interrupted to double-check that he’d heard Mulvaney correctly. Mulvaney repeated the sentiment on Fox News, saying the president had “a very normal reaction” to Porter’s resignation, totally in keeping with a “zero tolerance” policy. When Chris Wallace pointed out that the president hadn’t shown any concern for the victims, Mulvaney innocently suggested that the president may have been tweeting not about Porter but about
mogul Steve Wynn.
Policy was not spared from Mulvaney’s speciousness. The OMB director told Wallace that the president’s new budget “does move us back towards balance. It does get us away from trillion-dollar deficits.” The latter is technically true, but Mulvaney said those words knowing what
The Post reported Sunday night: The budget “falls far short of eliminating the government’s deficit over 10 years,” with yearly deficits still in the hundreds of billions. So much for “balance.”
What makes Mulvaney such a perfect fit for Trump is not the ridiculous claims themselves, but the confidence with which he delivers them. Other Trump lackeys were less “sure” in their defenses. Legislative director Marc Short admitted that he literally did not know what Kelly knew and when he knew it, which led NBC News’s Chuck Todd to reply, “Why come on here and not know?” Kellyanne Conway opted for ridiculous defenses, including the idea that women should just be happy that he
created jobs for them. But where Mulvaney was earnest, Conway was resigned, like a beleaguered mother who just wants you to lay off her ill-behaved child.
Trump has made a career out of making false statements with absolute conviction: The GOP tax cut is the
“biggest” ever (it’s not); the Nunes memo totally “vindicates Trump” (it
doesn’t); “our economy is perhaps the best it’s ever been” (
not even close). More broadly, he’s still pledging to “drain the swamp” while Cabinet members
fleece taxpayers and corporations and donors receive big giveaways. This two-facedness is best enacted by those who remain committed to the con — which makes Mulvaney the perfect scoundrel for Trump.
James Downie is The Washington Post’s Digital Opinions Editor. He previously wrote for The New Republic and Foreign Policy magazine.
Follow @jamescdownie
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