Enforcement of the Law, Quantitative Impact Analysis & Other Gems
Last week CFPB Acting Director Mick Mulvaney had a busy speaking calendar in Washington, D.C. and we all should be listening. He addressed the Credit Union National Association (CUNA)’s Government Affairs Conference on Tuesday, February 27th and the National Association of Attorneys General (NAAG) Winter Meeting on Wednesday, February 28th. While there were differences in the two presentations because of the respective audiences, Mulvaney’s strategic themes were clear. You can watch the CUNA speech here and the NAAG speech here.
1. CFPB will reflect the current administration. Not surprisingly, the CFPB will be run differently under the Trump administration than it had been under the Obama administration. Whatever one’s politics, the Acting Director made abundantly clear that a new sheriff is in town. Mulvaney highlighted the time he has been spending with CFPB staff to share his priorities and to re-align departments and to focus activities under the new strategic constructs. He assured both CFPB staff and the two audiences that despite the strategy shift, he is not anticipating employee layoffs.
2. CFPB enforcement activity will enforce the law. A bit circular? Maybe. Nonsensical in light of past CFPB activity? No. Mulvaney emphasized that institutions should “know what the rules are” before being sued for allegedly failing to comply. In other words, the CFPB should not be challenging company activities which leaders did not reasonably understand violated applicable law. And related, CFPB should not push the envelope. Mulvaney rejected the notion that enforcement suits should be “creative” or that the CFPB should regulate by enforcement. Mulvaney will leave legislative tasks to the Congress. Waxing literary at CUNA, Mulvaney quoted Alexis de Tocqueville’s Democracy in America: “When justice is more certain and more mild, is at the same time more efficacious.” Mulvaney acknowledged the great power the CFPB has and opined that power should be wielded humbly and judiciously.
3. CFPB will quantitatively assess regulatory impacts. Mulvaney spoke to leveraging cost-benefit analysis at the Bureau. He will require quantitative benefits and burdens to be assessed before changes are made to regulatory requirements. He intends rule making with substantial accountability and transparency, including input from consumer groups, Attorneys General, and industry. Mulvaney hopes the CFPB will “hear” (not just listen) when engaging in these analyses, acknowledging previous criticism that the Bureau may have been “checking in the box” in that regard.