We look at the showdown at the Consumer Financial Protection Bureau after Director Richard Cordray stepped down Friday and appointed as his successor, Leandra English, the Bureau’s deputy director and his former chief of staff. Almost immediately, President Trump responded with his own announcement that he planned to go ahead with his own appointment of Budget Director Mick Mulvaney, who has voted in favor of killing the bureau. Now English is suing. We speak with Lisa Donner, Executive Director of Americans for Financial Reform, which fought for the creation of the agency.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman. You can sign up for our daily headlines and news alerts by texting the word democracynow, one word, to the number 66866. That’s democracynow, one word, to 66866.
Over the weekend, a fight erupted over who will become the acting director of the Consumer Financial Protection Bureau this morning. That’s the CFPB, the federal watchdog agency that was established after the 2008 financial crisis to regulate banks, credit card companies, payday lenders, impose fines for wrongdoing. Analysts say whoever is empowered as director has a huge role in deciding what or how much the organization decides to regulate.
After announcing his resignation earlier in the month on Friday, the director of the Bureau, Richard Cordray, sent a letter to President Trump announcing he was leaving and was appointing as his successor Leandra English, the Bureau’s deputy director and his former chief of staff. But almost immediately, President Trump responded with his own announcement that he planned to go ahead with his own appointment of budget director Mick Mulvaney. Not that he is going to step down as budget director — he will just add being head of this agency until he nominates someone to take on the job.
On Saturday, Trump tweeted, “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick. Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” Trump said. While serving in Congress, Mulvaney said he would try to do exactly the opposite. He would try to kill the Bureau, and voted against it, and has since worked with Trump to roll back many of its rules.
Trump’s nominee must be confirmed by the Senate. In a memorandum obtained by POLITICO, the CFPB’s General Counsel Mary McLeod said Trump had the legal authority to name an acting director to the Bureau under the Federal Vacancies Reform Act. But the 2010 Dodd-Frank Act that created the agency specifically calls for the deputy director to become acting director when the agency’s top spot is vacant. So Richard Cordray said that English would become the deputy director, so she automatically became the director.
Late Sunday night, English filed a complaint saying, quote, “The president’s purported or intended appointment of defendant Mulvaney as Acting Director of CFPB is unlawful.” It also argued, “The president may not, consistent with the statutory requirement of independence, install a still-serving White House staffer as the acting head of an independent agency.” English also said in a statement Sunday, quote, “The talented, dedicated, and hard-working staff of the CFPB spend every day standing up for consumers. As acting director, I am filing this suit to stand up for the CFPB.”
Well, as we speak, there is a protest underway outside the offices of the Bureau by a group calling itself the Defend CFPB Coalition, including Americans for Financial Reform, Center for Responsible Lending, National Association of Consumer Advocates, and others. For more, we go to Washington, DC, where we are joined by Lisa Donner, executive director of Americans for Financial Reform. The group’s hundreds of members helped lead the fight for the creation of this Bureau. Lisa Donner, welcome to Democracy Now! I mean, this is extremely convoluted. Can you explain what is happening and who is going to work today at the Bureau?
LISA DONNER: Thank you very much for having me. I appreciate it. And actually, I think you laid out a very complicated situation extremely well in that opening. As you say, we believe that Leandra English is the proper acting director of the CFPB. She and Mick Mulvaney I believe both showed up for work today. The fact that she has filed this lawsuit last night means that the courts will get to decide what happens. But there is a lot at stake for the Consumer Bureau, which means there’s a lot at stake for the American public, because the Consumer Bureau’s work is so important.
AMY GOODMAN: Explain the Consumer Bureau — what it was set up to do, the crisis it was trying to address, and what this all means. What these two acting heads represent.
LISA DONNER: The Consumer Bureau was set up after the crisis, I think based on the recognition that one of the sources of the crisis is that there had not been any single federal financial regulator that was dedicated to, focused on, that had the mission of consumer protection, and the full range of tools to take that on.
That is part of the reason we ended up with this explosion of abusive mortgages that cost millions and millions of people their homes and were a trigger of a financial crisis that cost millions of people their jobs, and from which most people in the country are still battling to recover.
With the creation of the CFPB, we finally do have an agency with that mission and with a range of tools to carry out that mission. And the CFPB has been living up to the promise. Living up to sort of realizing the idea that was the reason for its creation and pursuing that mission.
It has been extremely effective. It has won back through enforcement actions about many problems, including problems that festered for years unaddressed, more than $12 billion in relief for 29 million, 30 million consumers. It has written rules to take on abuses in the payday and car title lending market. It has really put a spotlight on problems in the student lending market and drawn attention and taken action to crack down on abuses by sham for-profit schools.
It has given special attention, as it was mandated by Congress to do, to the problems of students and of servicemembers and veterans and of seniors, including really making sure that the Servicemembers Civil Relief Act, which provides certain special protections for active duty service members — to make sure that financial problems are not — they are in a particularly vulnerable situation because their job situation changes, because they are overseas — and to make sure that their financial stability and their family’s financial stability is not undermined. Those rules have been on the books but not been enforced.
So CFPB has really taken up the charge that it was given, to start to make financial markets fairer and safer. And I think that is exactly why it is so hated in some quarters. It is not because it has failed, but because it has succeeded, and is an example of the difference it makes if a regulatory agency is willing to follow the facts, pay attention to what the public is saying, and be aggressive in enforcement and in supervision and in rule writing when that is warranted by the harm being caused to consumers.
AMY GOODMAN: I wanted to turn to Massachusetts Senator Elizabeth Warren who helped establish the Consumer Financial Protection Bureau while she was a Harvard Law School bankruptcy professor. She tweeted a response to Trump, saying, “The only thing that will turn the @CFPB into a disaster is for @realDonaldTrump to ignore Dodd-Frank & name an acting director determined to destroy the agency.” So what does it mean for Mick Mulvaney, who has promised he would, well, try to kill this Bureau, to be named the head and also be the budget director for President Trump?
LISA DONNER: As you suggested in your opening, there are at least three fundamental problems with Mick Mulvaney as acting director. One is that the CFPB statute clearly says that the deputy director becomes the acting director. And as a number of legal commenters have pointed out, the legislative history of the CFPB really underlines that that was the intent of the drafters. There was one set of language in early versions, and in the final version, there is clarification that there is this plan and process for what happens. So that is one problem.
A second problem, as you suggested, is that the CFPB, like the other financial regulators, was established to be independent. And that is to free it some, or to at least create some space from the influence of the very powerful industry that it is charged with regulating, and to free it to focus on the facts. And it is profoundly contradictory to that independence to have somebody who is an official of the White House, and who is charged with carrying out executive branch policy, to be in charge of the Bureau.
And then finally, Mick Mulvaney has said that he — and wants to — that the CFPB shouldn’t exist. He said it is a sad, sick joke. He has supported and promoted legislation to both get rid of it altogether and to get rid of specific powers and authorities of the Bureau or to weaken it or make it unable to do its job again and again and again. And this is industry that — these are proposals, rather, that some of the worst actors in the financial services industry support and promote and argue for.
And those were some of his largest campaign donors when he was a congressman. He took $1.2 million from the financial services industry, including the payday lenders, for example, who are among the most fierce opponents of the Bureau. And they are opponents of the Bureau — they hate it because they want to continue to be able to rip people off, and they want to continue to be unaccountable. The same is true, for example, of the auto dealers, who have been violently opposed to the CFPB’s efforts to end discrimination in the way that auto loans, especially subprime auto loans, are priced.
AMY GOODMAN: So, Lisa Donner, you also weigh in on the whole issue of taxes. And this, well, as President Trump said, is a very big week for taxes. He tweeted, “…big week for Tax Cuts and many other things of great importance to our Country. Senate Republicans will hopefully come through for all of us. The Tax Cut Bill is getting better and better. The end result will be great for ALL!” So fit this into — what is happening now with the Bureau with what is happening now with President Trump’s push for tax reform.
LISA DONNER: It is actually kind of remarkable. The tweets that Senator Warren was responding to in those excellent tweets of hers, with President Trump saying the banks had been destroyed by CFPB — the truth is big banks are doing extremely well, and small banks are doing well, too. There’s just no foundation for that claim. It is sort of detached from reality. And at the same time that these kind of unneeded gifts, like, “Here, rip people off more” — kind of gift in the form of trying to destroy the work of the Consumer Bureau — they are also showering giant gifts on the financial industry through the tax bill.
It hasn’t been that widely reported on, but Wells Fargo, the same Wells Fargo who just opened millions of fake accounts, and has been avoiding accountability to the public for opening those millions of fake accounts by making it impossible for people to take them to court around those millions of fake accounts — Wells Fargo is actually perhaps the single largest beneficiary of the tax cuts being proposed.
And the other large banks are giant beneficiaries as well, both of the cut in the corporate rate and in the “bring your overseas profits home at a discount” pieces of the proposal. I will add that the private funds industry also a giant beneficiary of the tax proposals in the form of the pass-through cuts that are being made, although they probably want even more.
So this is kind of piling — putting Mick Mulvaney in charge of, or trying to put him in charge of the Consumer Bureau, is having a fox guard a hen house, which is not even a powerful enough analogy, even as you are also giving the fox presents of additional hen houses.
AMY GOODMAN: Well, I want to thank you very much, Lisa Donner, executive director of Americans for Financial Reform. Its hundreds of members fought for the creation of the Consumer Financial Protection Bureau. Thank you so much for being with us. A number of people are outside the CFPB right now protesting. We will see who will head up this agency in the meantime. This is Democracy Now! When we come back, two nontraditional Democrats win seats in Virginia and North Carolina. We will speak with both of them. Stay with us.