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Mulvaney’s CFPB a Tamed, Humbled Agency

The opinions expressed by columnists are their own and do not necessarily represent the views of

When President Trump made Mick Mulvaney head of the Consumer Financial Protection Bureau (CFPB) in 2017, it was meant to be a temporary appointment only. Thus the title that you’ve no doubt read in many news stories: “acting director.”

Mulvaney was appointed for two reasons.

First, Mulvaney is thoroughly trusted by the president. Trump made him head of the prestigious Office of Management and Budget (OMB) first and has reportedly considered him to be the next White House Chief of Staff, though it was announced that retired general John Kelly will remain in that post through 2020.

Second, the president needed someone in that CFPB position pronto to force out Obama bitter-ender Richard Cordray. Cordray insisted that the president had no authority to appoint his successor and tried to appoint his own personal chief of staff instead, which led to a pointless court battle.

What that fight meant is that Mulvaney has had to wear two hats, as both head of OMB and head of CFPB. That’s a lot to ask of one man, but it gets worse for Mulvaney.

There is a full-on confirmation battle brewing in the Senate Banking Committee over the woman Trump appointed to be his successor, Kathy Kraninger. In fact, the Committee has postponed their vote on Kraninger’s nomination, ensuring that Mulvaney will likely keep wearing both hats at least through the end of this year.

That’s bad news for Mulvaney’s sleep cycles but great news for both businesses and American consumers. As acting head of the CFPB, Mulvaney has turned the agency from a forum for activist agitprop into an agency that is actually interested in doing its job – protecting consumers and behaving even-handedly to the financial institutions it regulates.

Mulvaney has done a particularly good job with pushing the CFPB to clean out its backlog of ongoing investigations. It’s hard to explain what a very good thing that is, but I’ll try.

One of the things that the Obama era CFPB was infamous for was leaving companies in investigative limbo for years – not throwing the book at them but leaving them under a cloud of suspicion. Investigations lingered and lingered.

This had a knock on financial effects, as companies had to spend millions of dollars in document compliance costs, and, absent a ruling, they often had to delay new initiatives that sometimes cost tens of millions of dollars since the cloud of investigation could depress the company’s value by scaring off investors.

Mulvaney has resolved that under him, the agency will do no such thing. It has moved aggressively to close investigations by either finding no fault or finding fault and reaching a settlement with the institution in question that prioritizes the customers who were wronged.

Progressive critics such as Senator Elizabeth Warren hate this and want to hold up Mulvaney’s successor over the new direction. They preferred the old regime that often played with companies the way a cat will play with its catches.

This regulatory cruelty works in the general economy about as effectively as you might expect. It sows uncertainty and paranoia and destroys the trust necessary for enterprise to thrive.

Fortunately, while some senators try to give Mulvaney’s successor the cruel cat treatment, the CFPB remains in competent, conservative hands as he leads not one but two agencies. All fair-minded Americans can rest a little easier.

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