Federal Agency Action
January 30, 2018
On January 30, 2018, Acting Director Mick Mulvaney of the Consumer Financial Protection Bureau (CFPB) announced to staff that he would transfer the Office of Fair Lending and Equal Opportunity (OFLEO) from the Division of Supervision, Enforcement and Fair Lending (SEFL) to the Office of Equal Opportunity and Fairness (OEOF) which is under the direct control of the Director’s Office in the CFPB. The CFPB was created in 2010 with the passage of the Dodd-Frank Act with specific instructions as to the structure and duties of each office within the bureau. Mr. Mulvaney, a former Republican Congressman from South Carolina, had previously opposed the creation of the agency and has been critical of it ever since. President Donald J. Trump later appointed him Acting Director of the CFPB in November 2017. LEARN MORE, LEARN MORE, LEARN MORE, LEARN MORE
This decision by Acting Director Mick Mulvaney is a curious one. The Office of Fair Lending and Equal Opportunity (OFLEO) – the office that the Director is transferring – was a highly successful unit. The agency was established in the wake of the financial crisis of 2007 – 2008 and is tasked with consumer protection in the financial sector with mortgages, credit cards, student loans, debt collection and payday loans given priority for investigation and enforcement. In 2014, CFPB ordered GE Capital to pay $225 million to consumers because of racially discriminatory credit card practices. There were also other incidents of racial discrimination in mortgage pricing and lending practices. The move of this active unit raises eyebrows because it is being placed in an office of the director that handles personnel initiatives for people who work at the CFPB. The Office of Equal Opportunity and Fairness (OEOF) does no enforcement work at all and is focused only on initiatives that arise inside the bureau. It does not make sense to move a unit that aggressively pursued third-party banks, credit unions, lenders and other financial firms and reorganize the unit into the agency’s personnel section. The obvious answer is that Mr. Mulvaney is moving to minimize the importance of fair lending for the benefit of these financial institutions. That leaves an obvious hole and raises the question as to who will continue to investigate and correct racial discrimination abuses that the OFLEO had discovered in the past. The Dodd-Frank Act that created the CFPB mandated the creation of the OFLEO and that it “provide oversight and enforcement of Federal laws…to ensure fair, equitable, and non-discriminatory access to credit.” It will be difficult to see how this will occur when the unit charged with that task is unable to continue because of Mr. Mulvaney’s questionable actions. LEARN MORE, LEARN MORE, LEARN MORE
- Consumer Federation of America – info page supporting the work of the Consumer Financial Protection Bureau.
- American Civil Liberties Union (ACLU) – info page on race and economic justice (issuance of predatory loans and abusive mortgage practices).
This brief was compiled by Rod Maggay. If you have comments or want to add the name of your organization to this brief, please contact firstname.lastname@example.org.