The hijacking of the Consumer Financial Protection Bureau

There’s so much I want to talk about right now… the failed attempt on the part of Project Veritas to trick the Washington Post into running a fake story about Roy Moore’s fondness for child rape; the fact that our President couldn’t help but make a racist joke today while honoring Navajo ‘code talkers’ for their service during World War II; the campaign on the part of industry to gut net neutrality; this Republican tax bill which seems to be moving quickly through the Senate in spite of the fact that it would add $1.5 Trillion to the national debt, raise taxes on the middle class, take health care from 13 million Americans, and decimate higher education… but what I’m really drawn to right now is this story about the fight over the future of the Consumer Financial Protection Bureau (CFPB), which, apparently, as of today, has two directors, each claiming legitimacy.

I mean, how can you see something like this, and not want to know more?

The above comes from a suit filed yesterday in U.S. District Court for the District of Columbia by CFPB Acting Director Leandra English, in an attempt to prevent former Republican Congressman Mick Mulvaney, who currently serves as director of the White House Office of Management and Budget, from taking her position. [He showed up at the CFPB office this morning, with a bag of donuts, telling people that Trump had made him their new boss, in violation, it would seem, of standard protocol.]

Before getting into all of that, though, I should start by saying that the Republicans have always hated the CFPB, since Elizabeth Warren first proposed the formation of the agency a decade ago, as we were looking for ways to rein in financial institutions and keep them honest in the wake of the collapse that nearly tanked our economy. As you might recall, members of the banking industry fought viciously to keep the agency, which is charged with protecting consumers in the financial sector, from ever seeing the light of day, first attempting to keep it from launching, and then delaying the confirmation of Richard Cordray, who President Obama had chosen to run the organization, for over two years… Cordray was finally confirmed by the Senate in July of 2013, “cementing,” in the words of the New York Times, “a new era of expansive federal oversight of companies that lend money to consumers.” And, it would seem, at least from the perspective of consumers, that Cordary and the agency have been successful. According to California Congresswoman Barbara Lee, the CFPB has, since its launch, “returned $12 billion to veterans, seniors, and families who have been cheated by banks and corporations.” But, apparently, not everyone sees this as a good thing. Mick Mulvaney, who Trump wants to install as the head of the agency now that Cordray has stepped down, has called the CFPB a “sad, sick joke” in the past. What’s more, just today, Mulvaney told reporters that, under his direction, the agency will “protect people without trampling on capitalism.” [I guess, from Mulvaney’s perspective, the CFPB was “trampling on capitalism” when it recently got Citibank to return $700 million to customers for misleading them into purchasing “add-ons,” like identity-theft protection.]

OK, so here, with a little more background as to what just happened, is a clip from today’s New York Times.

…The bureaucratic standoff began Friday afternoon when Richard Cordray, the Obama-appointed leader of the bureau, abruptly announced he would leave the job at the close of business, a week earlier than anticipated. He followed up with a letter naming his chief of staff, Leandra English, as the agency’s deputy director.

The announcement came with a twist. Under the law, he said, that appointment would make the new deputy director the agency’s acting director. The move was seen as an effort to delay Mr. Trump from appointing his own director, whose confirmation could take months.

The White House retaliated, saying that the budget director, Mick Mulvaney, who once characterized the consumer protection bureau as a “sad, sick joke,” would be running the agency. He would also keep his current job as head of the Office of Management and Budget.

Mr. Mulvaney said he would assume the additional role until a permanent successor was found.

“I believe Americans deserve a C.F.P.B. that seeks to protect them while ensuring free and fair markets for all consumers,” he said in a statement. “Financial services are the engine of American democratic capitalism, and we need to let it work.”

In a letter to the consumer protection agency’s staff, Mr. Cordray named Ms. English as deputy director. Under the 2010 Dodd-Frank Act, which established the regulatory agency, the deputy director is to serve as acting director in the absence of a permanent leader, Mr. Cordray said.

The conflicting appointments were a fitting development for an agency under constant attack from Republican leaders, and it leaves supporters wondering about the agency’s future with Mr. Trump in the White House and Republicans in control of both houses of Congress…

Interestingly, this is all happening at a time when, according to Newsweek’s David Sirota, the CFPB is preparing a huge lawsuit against the megabuck Santander. As Sirota pointed out on Twitter yesterday, not only did Trump appoint Mulvaney the same day that Reuters broke the story about the case against Santander, but “Mulvaney’s former top aide is right now lobbying for Santander”.

What’s more, according to Think Progress’s Ian Millhiser, the lawsuit seeking to stop Mulvaney’s appointment has been assigned to Judge Timothy Kelly, a Trump appointee and former Republican Senate staffer‏, which means that the decision, at least at the district court level, will likely favor Trump and Mulvaney. The question, as Millhiser says, is how fast the case makes it to the DC Circuit Court, and who will be on the panel that hears the case.

For what it’s worth, according to Harvard Law Professor Laurence Tribe, the law is pretty clear on this matter, and “the law says that the agency’s deputy director takes over when the director resigns.” Not that the law really matters anymore.

I know I don’t need to tell you this, but what we’re seeing here fits a pattern we’ve seen before. This is what the administration does. They find the person most likely to destroy a particular organization within government, and they install that person at the head of the organization. Just like Trump appointed an anti-public education activist (Betsy DeVos) to run the Department of Education, a friend of Putin’s (Rex Tillerson) to run the State Department, or a governor who once called for the destruction of the Energy Department (Rick Perry) to head that entity, this is all about the purposeful destruction of what Steve Bannon called the “administrative state.” This is about destroying the very foundation of our American government. And we should all be very concerned.