Embattled acting CFPB director faces massive internal divisions

Inside Subprime: December 6, 2017

By Caroline Thompson

No matter how you look at it, it’s clear that the Consumer Financial Protection Bureau is in trouble. Whether you believe that trouble comes from a controversial new interim leader who seems bent on destroying the Bureau from the inside, or from a rogue faction of employees working secretly to undermine his every move, depends on which side of the aisle you’re sitting on. Either way, the future of the CFPB has never been so uncertain, and as more and more major financial scandals come to light, the average American consumer may soon be left to fend for themselves.

As we reported last month, the unrest in the CFPB started in November, when then-director Richard Cordray announced he would be stepping down from his post – likely to enable him to run for governor in his home state of Ohio. Before he left, Cordray appointed his former chief of staff, Leandra English, as acting director. But President Trump, who has long been a critic of the CFPB’s crackdown on unethical business practices, decided to overrule Cordray’s decision, and appointed former congressman Mick Mulvaney – who has said in the past that the CFPB shouldn’t exist – as acting director instead.

After a few weeks of legal battles and donut wars, a federal judge ruled that Mulvaney could stay on as acting director, denying English’s emergency request to displace him. While English plans to continue her fight for the role, for now, Mulvaney is settling into the position, and veering sharply away from the Bureau’s normal course of action.

According to the New York Times “Mulvaney briefly stopped approval of payments to some victims of financial crime, halted hiring, froze all new rule-making and ordered a review of active investigations and lawsuits. Some, he has indicated, will be abandoned.”

He has also prevented the Bureau from collecting damages from banks and insurance companies its won lawsuits against, and shelved ongoing investigations into misconduct from other major financial entities. In short, he is doing everything in his power to prevent the CFPB from doing what it was created to do: hold major financial institutions liable for taking advantage of consumers.

This has created a culture of tension and paranoia within Bureau, so much so that a group of CFPB employees staunchly opposed to Mulvaney’s leadership have dubbed themselves “Dumbledore’s Army.” Named after the secret society from the “Harry Potter” series (formed after corrupt Ministry of Magic bureaucrat Dolores Umbridge deposed Professor Dumbledore and installed herself as headmistress of Hogwarts School).  The fictional group was dedicated to the resistance, and became key players in the war against the evil Lord Voldemort.

While the CFPB version of Dumbledore’s Army may not have to deal with any killing curses or magical snakes, their choice of name is telling – apparently CFPB employees believe they are up against the same kind of unchecked corruption faced by the heroes of J.K. Rowling’s books.

Whatever happens next for the CFPB, it will likely be a fascinating – if not somewhat depressing – story to watch unfold.

To read more about the CFPB, check out these recent articles from OppLoans:


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