- Democratic Sen. Elizabeth Warren is seeking an inspector general investigation into Consumer Financial Protection Bureau (CFPB) acting director Mick Mulvaney’s first moves at the helm of the agency.
- In a letter provided to Business Insider, Warren wrote that those moves represent “a waste of taxpayer dollars and raises questions about whether Mr. Mulvaney has prevented the CFPB from fulfilling its congressional mandate.”
Democratic Sen. Elizabeth Warren is opening up a new front in her battle with the Trump administration over the future of the Consumer Financial Protection Bureau – the agency she championed in the aftermath of the financial crisis.
Warren is now seeking an inspector general investigation into CFPB acting director Mick Mulvaney’s decision to put a moratorium on all enforcement actions that were imminent or in progress at the agency before he took the top job on Monday, according to a letter provided to Business Insider. On his first day at the helm of the bureau, Mulvaney announced a 30-day freeze on hiring and any “new rules, regulations, or guidance.”
“Anything that’s in the pipeline stops,” he said.
In a letter addressed to Mark Bialek, the inspector general of the Board of Governors of the Federal Reserve System and CFPB, Warren wrote that Mulvaney’s early moves to temporarily halt action at the bureau amount to “a 30-day shutdown of the CFPB.”
“This represents a waste of taxpayer dollars and raises questions about whether Mr. Mulvaney has prevented the CFPB from fulfilling its congressional mandate,” Warren wrote. “I am therefore asking that your office conduct a review of these orders by Mr. Mulvaney, consistent with your authority to ‘examine the economy, efficiency, and effectiveness of … the CFPB’s programs and operation.'”
Warren asked Bialek to review the authority under which Mulvaney imposed the moratorium; a full list of actions frozen by Mulvaney and whether those actions had any effect in ongoing CFPB cases, investigations, or settlements; the rationale for the freezes; whether Mulvaney or other CFPB officials communicated with lobbyists about the moratorium in the days prior to its announcement; and the impact of that moratorium on consumers.
The Massachusetts Democrat highlighted one specific case as questionable when considering Mulvaney’s moratorium. On Friday,Reuters reported that the CFPB was preparing to sue the Spanish bank Santander for overcharging borrowers on loans “as early as Monday.” A subsequent story in the International Business Times reported that Mulvaney’s former chief of staff was hired by the bank as a top lobbyist.
Warren said that “would present, at minimum, a troubling appearance of influence-peddling.”
The latest episode of a week-long battle
The senator’s letter represents the latest salvo in this nearly weeklong battle over the independent agency’s future. The skirmish began on Friday when outgoing director Richard Cordray named his deputy, Leandra English, as acting director. President Donald Trump then announced Mulvaney, who is also serving as Office of Budget and Management director, as the CFPB’s acting director.
Both sides then battled over who had the legal authority to name the successor. Warren and her allies cited language in the 2010 Dodd-Frank Act as proof that Cordray, nominated by President Barack Obama, was in the right, while the Trump administration and its allies said the 1998 Federal Vacancies Reform Act usurps Dodd-Frank.
Dodd-Frank says the bureau’s deputy director shall “serve as acting director in the absence or unavailability of the director.” The heart of the legal dispute is whether “absence” or “unavailability” in Dodd-Frank means a vacancy, as is the case here.
The general counsel for the CFPB sided with the Trump administration on the matter. And as a source inside the CFPB told Business Insider, the general counsel had made Cordray aware of that view prior to his naming English as his successor.
English filed a lawsuit in federal court on Sunday in which she called herself the “rightful acting director” and sought a temporary restraining order to prevent Mulvaney from fulfilling Trump’s appointment.
On Tuesday, a judge ruled in favour of the Trump administration. There are still other lawsuits pending in this matter, however.
Read Warren’s full letter:
Elizabeth Warren Letter to CFPBIG Re Moratorium 113017 by Brett LoGiurato onScribd
Business Insider Emails & Alerts
Site highlights each day to your inbox.