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Elizabeth Warren and Mick Mulvaney face off over consumer protection bureau

President Trump and Acting Director Mick Mulvaney have charted a dramatically different course for the Consumer Financial Protection Bureau, the brainchild of Sen. Elizabeth Warren that was created in 2010 to curb predatory practices and lending problems. Today those two visions collided in a showdown on Capitol Hill. William Brangham talks with Ken Sweet from The Associated Press.

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  • Judy Woodruff:

    The federal Consumer Financial Protection Bureau was created by Congress and President Obama in 2010 to focus on curbing predatory practices and other problems with lenders.

    But there has always been division over its mission. It's been applauded by most Democrats, vilified by many Republicans and by the industry.

    President Trump and its acting director have charted a dramatically different course for the bureau.

    Today, as William Brangham tells us, those two visions collided in a showdown on Capitol Hill.

  • William Brangham:

    The acting director of the CFPB, as it's often called, is Mick Mulvaney. He's also the president's budget director.

    The day he took or the agency four months ago, he said the agency was an awful example of a bureaucracy gone wrong. Since then, he's proposed changing its independence from Congress, how it's funded, and easing its overall approach toward lenders.

    Today, when he testified before the Senate Banking Committee, he delivered very different kind of hello and took a swipe at the agency's charter.

  • Mick Mulvaney:

    I evidently made a little news yesterday when I reminded everybody -or at least pointed out the fact that, while I have to be here by statute, I don't think I have to answer your questions.

    If you take a look at the actual statute that requires me to be here, it says that I shall appear before the committee on Banking, Housing and Urban Affairs of the Senate. And I'm here. I'm happy to do it.

    I want to make it clear, I'm going to answer every question that I can today. I'm not using this as an excuse to not answer your questions, but the statute says I have to appear.

  • William Brangham:

    One of the senators on that committee is Democrat Elizabeth Warren from Massachusetts.

    The CFPB is considered her brainchild, from when she was a Harvard professor, and at one point early on, her name was bandied about as its possible first director. That didn't happen, but she remains a big defender of the bureau's original mission.

    And, today, she had some choice words for Mulvaney.

  • Sen. Elizabeth Warren, D-Mass.:

    You have taken obvious joy in talking about how the agency will help banks a lot more than it will help consumers and how upset this must make me.

    But here's what you don't get, Mr. Mulvaney – this isn't about me. This is about active-duty military. It's about first-responders and students and seniors and families, and millions of other people who need someone on their side when consumers get cheated. You are hurting real people to score cheap political points.

  • William Brangham:

    For a look at what's at stake here, we turn to Ken Sweet. He covers banks and the Consumer Bureau for the Associated Press. He joins me now from New York City.

    So, Ken, today's hearing was really quite brief, but there's probably not two more diametrically opposed individuals in Washington, D.C. What did you make of today's hearing?

  • Ken Sweet:

    If there's two people who loathe each other more in D.C. than Mick Mulvaney and Elizabeth Warren, I haven't met them.

    Elizabeth Warren, the CFPB was her brainchild, as you mentioned. She has a lot of allies inside of it, and she really believes in the bureau's mission, while Mick Mulvaney, when he was a congressman, basically said that the bureau was a sick, sad joke — and that's a quote from him.

    And one of the things that he has had to say repeatedly — and he said in the committee hearings — is that he's not in that position to — quote — "burn the place down," which seems like quite a baseline to work from, if you get where he's coming from.

  • William Brangham:

    The CFPB was originally created to go after predatory lending, banks, car loans, payday lenders and things like that.

    You did a very big investigation recently that looked at what type of enforcement actions the CFPB is doing since Mulvaney took over. Can you tell us what you found?

  • Ken Sweet:

    Well, the answer about how much enforcement the CFPB has been doing is zero.

    Since Mulvaney took over — or actually a little bit before he took over, the CFPB has done zero enforcement actions under his control. Now, what's an enforcement action? An enforcement action is kind of one of the main tools the CFPB has to return money to consumers.

    So, like, they would take an enforcement action against, for example, Bank of America, which they did in 2015, and returned $727 million to credit card customers who had been duped by dubious fees. This is their primary way of returning money, and they have done a lot of it. There was about, I think, $4 billion in direct cash back to consumers, and another, like, $7 billion, $8 billion in what they call indirect relief.

    So doing no enforcement actions means that no money is going back to those consumers, at least right now, under Mulvaney.

  • William Brangham:

    I mean, how much of this is just him getting his feet under him as the new head of the bureau? And how much of this is — in some ways, this was his philosophy all along. He always argued that the bureau was guilty of overreach, too many fines, too many new rules, and he vowed to roll it back. So how much of a surprise is this?

  • Ken Sweet:

    Well, Mulvaney's defense on this issue is kind of twofold.

    He said at the committee hearing today and yesterday that Cordray, Richard Cordray, who ran the bureau before Mulvaney, didn't do any enforcement actions in the first six months that he was in that position. Now, when Cordray started, it was when the bureau was really just getting started. So, you know, they really weren't — didn't have anything in the pipeline to, like, put enforcement actions in place.

    The other part was that, you know, he says that the bureau has about 100 investigations going on right now, and about 25 lawsuits that are currently pending. Now, none of those have turned into an enforcement action, but I think what we have learned from reporting is that the bureau has slowed its enforcement down to a trickle, as opposed to that steady flow we would see under Cordray, which was, like, basically an enforcement action once a week.

  • William Brangham:

    Mick Mulvaney has also said he wants to change how the CFPB is funded and how Congress exerts oversight. Can you explain what he wants to do there?

  • Ken Sweet:


    So, the CFPB Was created as an independent, strong bureau that was supposed to be sort of exempt from the political goings-on of Washington. So it gets its budget from the Federal Reserve. So when the director, in this case, Mulvaney, needs money, he just goes to the Fed and says, I need such and such amount of money.

    And so the CFPB is not subjected to the traditional congressional budget process, which is a thing that Republicans have been hounding on for months and years, basically going back to the creation of the bureau. The other thing is that the director position is a very strong, independent position, where it can — Mulvaney could only be removed or a permanent director could only be removed in cases of an extreme wrongdoing.

    Basically, you're in that job, and there's nothing anybody can do about it. So he wants that job to be more subject to — you know, if the president wants to get rid of that person, he can get rid of that person.

  • William Brangham:

    All right, Ken Sweet of the Associated Press, thanks very much.

  • Ken Sweet:

    Thank you so much.

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