NPR Highlights Davidson on New Leadership at CFPB

Interview

In case you missed it, Congressman Warren Davidson sat down with NPR today to discuss his viewpoints on the Consumer Financial Protection Bureau (CFPB) under former Director Richard Cordray's leadership and how he thinks Mick Mulvaney, President Trump's pick for acting director, is a great choice for consumers.

Rep. Davidson sits on the House Financial Services Committee which has oversight of the CFPB. Committee oversight of the Bureau is limited as the CFPB was initially structured to be the most powerful, least accountable agency in U.S. history.

Consequently, the D.C. Circuit declared the Bureau's structure unconstitutional because under the Dodd-Frank Act, the President can only remove the Director for cause, essentially insulating the Director from being answerable to the President on any level, save for inefficiency, neglect of duty, or malfeasance.

According to the D.C. Circuit, the unelected CFPB director "possesses more unilateral authority -- that is, authority to take action on one's own, subject to no check -- than any single commissioner or board member in any other independent agency in the U.S. Government."

Director Mick Mulvaney will restore constitutional governance to CFPB.

"I think he'll restore a constitutional form of governance to the CFPB, which is a court opinion, not a Republican opinion. [Federal courts] found the CFPB is not constitutionally structured correctly and you're now seeing the crisis of that. The House tried to deal with this in May when it passed the CHOICE Act and the Senate hasn't yet worked through it. And of course, Elizabeth Warren is on the committee of relevance and within the hour of former Director Cordray's resignation [the DNC and Warren] was already sending fundraising emails for [former Director Cordray's] next political move. So the whole Agency has been fraught with politicized conduct and is not there for the good cause of protecting consumers."

Director Mulvaney's move to freeze hiring and new regulations signals leadership.

"…Frankly that's a very standard move for a cabinet secretary; now that I'm in charge, let's make sure that you run things through me. We'll establish a reasonable review process and get everyone used to working together. I think that's his [Mulvaney's] role as the leader and for however long that may be I think he'll do a great job at it."

The goal of the CFPB is to protect consumers, the economy.

"I think the goal of the Consumer Financial Protection Bureau means the consumer is being protected. The reality is that when our Democrat friends initially structured the CFPB they did it with zero support from Republicans. They did it not to protect consumers and instead did it in a way that has this nice sounding name but is in fact very pernicious in its effect on the economy. And it's [the CFPB] been led by a complete political opportunist who has been criticized by people in the hiring process for having a very politicized hiring process."

The CHOICE Act, which passed the House of Representatives May 4, 2017, establishes a clear line of leadership succession and a standard regulatory framework to prosecute fraud. Instead of fully and adequately investigating Wells Fargo the CFPB rushed to settle for a fine that was less than 1 percent of the Bureau's own estimate of the bank's statutory civil monetary penalty.

"The CFPB didn't discover the [Wells Fargo] problem despite all the regulatory overlay of Dodd-Frank, which we tried to fix in the House with passage of the CHOICE Act in May, but Wells Fargo went on under the noses of the regulators. The CFPB only pointed it out after the LA Times ran stories about it. So what will happen is, the standard regulatory framework that prosecutes fraud, will prosecute fraud. The SEC will be involved, as they are, and you wouldn't have a politicized statement by a political guy like Richard Cordray."

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