- Mick Mulvaney fired back at Sen. Elizabeth Warren on Friday after the senator asked about recent decisions by the Consumer Financial Protection Bureau (CFPB), which Mulvaney leads.
- Mulvaney said he “rejected” the Democratic senator’s insinuation that he loosened rules on payday lenders due to campaign donations.
- The CFPB acting director then suggested that Warren was in favour of a rule that ended forced arbitration clauses in customer contracts because of donations from trial lawyers.
The war of words between Sen. Elizabeth Warren and the Trump administration’s budget director reached a fever pitch on Friday as the two sides clash over rules on payday lenders.
In a letter to Warren on Friday, Office of Management and Budget Director Mick Mulvaney pushed back against the Massachusetts Democrat after she questioned some of his decisions as head of the Consumer Financial Protection Bureau.
Warren was instrumental in the creation of the CFPB, which was set up to protect consumers against financial fraud by large institutions. Mulvaney- who has been critical of the CFPB in the past – was named by President Donald Trump to lead the agency after its former director, Richard Cordray, stepped down. Warren was not a fan of the selection.
The senator took particular issue when the CFPB, reportedly at the direction of Mulvaney, dropped investigations into payday lenders that were charging interest of up to 900% on loans, and put a new rule to regulate these lenders on hold.
Of particular interest was the CFPB’s decision to drop an investigation into World Acceptance Corp., a Greenville, South Carolina-based lender that gave $US4,500 to Mulvaney during his time as a lawmaker. Additionally, during the 2016 campaign cycle, Mulvaney received $US31,700 in total from payday lenders.
“Payday lenders spent $US63,000 helping Mick Mulvaney get elected to Congress and now their investment is paying off many times over,” Warren said when the move was being considered in January. “By scrapping this rule, Mulvaney will allow his campaign donors to continue to generate massive fees peddling some of the most abusive financial products in existence.”
In a letter on January 31, Warren and five other Democratic lawmakers asked the CFPB for details on why it reversed the decision on the payday rule and the extent of Mulvaney’s involvement in that decision. As part of the letter, the lawmakers also noted the donations to Mulvaney
Mulvaney, in a letter addressed only to Warren and not the other five members, pushed back at the insinuation that the donations had anything to do with the recent actions in a letter.
“I reject your insinuation – repeated three times in as many pages – that my actions as Acting Director are based on considerations other than the careful examination of the law and the facts particular to many matter,” Mulvaney said.
The OMB and CFPB director then added a shot at Warren. Mulvaney’s letter said the suggestion about payday lenders was akin to him suggesting that the senator supported a rule to end forced arbitration clauses in customer contracts because she took donations from lawyers. From the letter:
“Prior to your letter, I would have never thought to consider, for instance, whether your vote against repealing the Bureau’s arbitration rule was influenced by campaign donations you may have received from trial lawyers or other parties who stood to financially gain from the rule. Perhaps I should reconsider. Instead, shall we agree that such accusations are baseless and discuss policy matters as responsible holding a public trust?”
In a reply later Friday, Warren and Sens. Richard Blumenthal and Jeff Merkley took Mulvaney to task for what they deemed was an inadequate reply to their original letter.
“You have failed to provide any clarity on the rationale for your actions to harm consumers,” the lawmakers wrote. “Our January 31, 2018 letter asked a series of simple questions about the reasons for your decisions on payday lenders. But you failed to answer a single one of our questions.”
Warren, Blumenthal, and Merkley then defended their position on the arbitration rule, noting that it was developed over multiple years and had the support of organisation including AARP.
“Our letter explained in detail why we thought your payday loan actions were unjustified and harmful to consumers,” the new letter said. “We are disappointed by your response, which, instead of explaining your recent actions, raised questions about our motivations for standing up for consumers.”