Entire operation of federal consumer regulator under review

The Trump-appointed acting director of the Consumer Financial Protection Bureau said Wednesday that he is launching a review of all the federal consumer watchdog agency's policies and priorities.

It's the second major step taken this week by Mick Mulvaney, who took over as acting director in late November, to reshape the bureau. On Tuesday, the bureau announced a review of its recently enacted rules for payday lending.

The review is the clearest sign yet that the future direction and role of the CFPB, which has existed for less than a decade, will be dramatically different than it was under the Obama administration.

In a statement Wednesday, Mulvaney said he is publishing formal requests for information for all "enforcement, supervision, rulemaking, market monitoring, and education activities" of the bureau, effectively the entire bureau's operations. Requests for information are a beginning step by federal agencies such as the CFPB to make changes to any rules they may have already put into place.

"In this New Year, and under new leadership, it is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau's statutory mandate," Mulvaney said.

The CFPB was created in the aftermath of the housing market bubble, 2008 financial crisis and the subsequent Great Recession. It was the brainchild of Elizabeth Warren, who at the time was a Harvard University law professor, and now is a U.S. senator from Massachusetts. It was designed as a consumer-centric federal regulator with a mandate to go after banks, credit card companies, debt collectors and other financial companies for bad behavior.

Under its first permanent director Richard Cordray, the CFPB exercised its mandate aggressively, putting into place new regulations impacting huge swaths of the banking industry from mortgages to prepaid debit cards.

Cordray and the CFPB got high praise from Democrats, the Obama White House and consumer advocacy groups, but at the same time made enemies with Republicans in Congress, who would call the CFPB a rogue agency. One of those Congressional Republicans was Mulvaney, who as a Republican representative from South Carolina, once called the CFPB a "sick joke" of an agency.

What rules Mulvaney wants to review, tweak, or repeal is unknown. His announcement Wednesday was broad, aimed at the entire operations of the bureau. The first request for information seeks comment on the bureau's use of what are known as civil investigative demands, which act like warrants by giving the bureau the authority to look through a company's records when wrongdoing is suspected.

Mulvaney has already announced the bureau will take a second look at its payday lending rules, which were finalized late last year under Cordray. He has also called for a limit to how much personal information on consumers the bureau collects as part of its operations, which critics have said has stymied the bureau's ability do its job.

The CFPB did not immediately respond to a request for comment on what areas of the CFPB are now under review. Mulvaney's staff in the White House also did not respond to a request for comment.

Warren, in an email statement, said it's clear Mulvaney wants to dismantle the CFPB. She said 29 million Americans have recovered $12 billion thanks to the bureau's efforts, and she hopes "every single one of them writes to tell Mulvaney they want an agency that keeps fighting for them."

While the CFPB's director has broad powers on what he or she chooses to enforce or prioritize, it could take years for a Trump-controlled CFPB to undo the regulations put in place under the Obama administration. For example the CFPB started work on the payday lending rules back in 2012.

This would not be the first federal agency that has seen a dramatic change in its direction under the Trump administration. The Environmental Protection Agency, under Scott Pruitt, has reshuffled its priorities away from issues such as climate change. The Federal Communications Commission late last year voted to repeal its net neutrality rules put into place under the Obama administration.


Ken Sweet covers banks and financial issues for The Associated Press. Follow him on Twitter at @kensweet.