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Mick Mulvaney Defends Enforcement Record, or Lack Thereof, at CFPB

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Mick Mulvaney, interim CFPB director, testified in February about the Trump administration’s budget. Credit: Diego M. Radzinschi/ ALM

In the nearly six months since White House budget director Mick Mulvaney took over the Consumer Financial Protection Bureau, the agency has abandoned more enforcement cases than it has brought in federal court.

That fact, made apparent by the lack of any new enforcement actions under his tenure, has fed the perception that Mulvaney is slamming the brakes at an agency widely known for its aggressive policing of the financial sector.

On Wednesday, appearing before Congress for the first time in his capacity as the Trump-appointed CFPB chief, Mulvaney fought the notion—as one Democratic lawmaker put it—that he has “essentially taken the cop off the beat.”

“Nothing could be further from the truth,” Mulvaney said, addressing several of his former colleagues on the House Financial Services Committee. “Let me be very clear to everyone: We are still going after bad actors,” he added.

While he conceded that the CFPB dismissed one lawsuit, a case against Golden Valley Lending and three other payday lenders affiliated with Native American tribes, Mulvaney said the CFPB is actively litigating 25 separate cases. Mulvaney said he had taken the “extraordinary step” of ratifying enforcement actions initiated by his predecessor, Richard Cordray, in moves meant to prevent the agency’s targets from continuing to challenge the agency’s independent, single-director design.

Mulvaney has so far taken that step in at least three cases, including the agency’s effort to force Future Income Payments to respond to a subpoena and its high-profile enforcement action against Ocwen Financial Corp., a leading servicer of mortgage loans.

In a separate case against All American Check Cashing, a company offering check cashing and payday lending services, defense lawyers have argued that Mulvaney’s ratification of the enforcement action has not rendered their constitutional challenge moot.

That defense team—headlined by Gibson, Dunn & Crutcher partner Theodore Olson, who unsuccessfully challenged the CFPB’s structure in the U.S. Court of Appeals for the D.C. Circuit—has since brought a similar constitutional challenge to the U.S. Court of Appeals for the Fifth Circuit.

Wednesday’s congressional hearing came a day before scheduled arguments in the D.C. Circuit over Mulvaney’s claim to the CFPB directorship.

Shortly before resigning in November, Cordray elevated his chief of staff, Leandra English, to the deputy director’s role. Cordray said upon his resignation that, under the Dodd-Frank Act, English was in line to step in as the agency’s director. But citing a separate law, the Federal Vacancies Reform Act, the Trump administration appointed Mulvaney as the interim leader. A federal judge in Washington twice refused to block Mulvaney’s appointment.

With the D.C. Circuit arguments 24 hours away, House Democrats on Wednesday made clear that their questioning of Mulvaney should not be taken as a concession that he is the CFPB’s lawfully appointed leader.

“Mr Chairman, if I may, I would like to say at the outset that Mr. Mulvaney is not the acting director of the Consumer Financial Protection Bureau,” said U.S. Rep. Maxine Waters, the ranking member of the House Financial Services Committee. “He was illegally appointed by the president in a move that blatantly contradicts the Dodd-Frank statute.”

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