President Trump is widely expected to name Mick Mulvaney, who currently serves as head of the White House Office of Management and Budget, as interim director of the Consumer Financial Protection Bureau.
If so, Trump would be picking someone with no background whatsoever in consumer protection, unless running a franchised Mexican restaurant in North Carolina is your idea of sticking up for the little guy.
“You’re going to see a lower level of protection, I don’t think there’s any doubt about that,” Mike Calhoun, president of the Center for Responsible Lending, told me.
Trump could still change his mind. Other names that have been floated as potential CFPB director include Mark Calabria, Vice President Mike Pence’s chief economist, and Todd Zywicki, a law professor at George Mason University who has criticized the bureau in the past.
But Mulvaney looks like the front-runner.
Before joining the Trump White House, Mulvaney, a tea party Republican, represented South Carolina in Congress and was a founding member of the far-right House Freedom Caucus. Before that he was a state politician.
His private-sector experience is limited. After law school at the University of North Carolina in Chapel Hill, Mulvaney worked a few years for a Charlotte, N.C., law firm with a reputation for playing rough in divorce cases. Then he worked for his dad’s home-building company, also in Charlotte.
The closest he came to anything involving consumer affairs was owning and operating a Salsarita’s Fresh Cantina restaurant — strip-mall Mexican food. The chain launched in Charlotte in 2000 and now operates in 18 mostly southeastern states
Mulvaney planned to open a half-dozen other franchised outlets in and around Charlotte, but then his political career got in the way.
Trump seems to have concluded that knowing how to whip up guacamole is sufficient experience for running an agency that defends consumers from rapacious banks, credit card issuers and debt collectors.
It probably also didn’t hurt that Mulvaney has called the CFPB a “sick, sad joke,” with lending rules that are “absolutely absurd.”
In other words, he’s poised to become yet another Trump appointee overseeing an agency he has publicly spit on. The president’s Energy and Education secretaries, and his Environmental Protection Agency administrator, are similarly dismissive of the bureaucracies they lead.
The CFPB’s present director, Richard Cordray, an appointee of former President Obama, announced last week that he’ll step down at the end of the month. He is expected to run for governor of Ohio, where he previously served at attorney general.
Mulvaney, 50, is expected to take the CFPB gig on an “interim” basis, which will allow him to skip a Senate confirmation hearing because he has already been approved for the OMB job. But that doesn’t mean he’ll be a mere placeholder.
Bureau insiders tell me they expect Mulvaney to stay on at the CFPB for an indefinite period. He’ll probably keep his day job at the OMB and name a deputy to manage the consumer bureau on a day-to-day basis, they say.
They expect Mulvaney to hit the brakes on enforcement actions, take a more methodical approach to financial regulation and possibly reassign staffers to positions they’ve never done before.
Rachel Weintraub, legislative director of the Consumer Federation of America, said advocates will be watching closely to make sure the CFPB continues fulfilling its watchdog role.
“The rules can’t just be nullified by a new director,” she said.
No, but they can be selectively enforced. Or the pace of enforcement can slow to a crawl.
“It’s safe to say there will be a slowdown at the CFPB,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest research Group.
Every consumer advocate I spoke with said they’re hoping for the best. But it seems a near-certainty that Mulvaney’s marching orders from Trump would include creating an agency that’s much friendlier to business interests.
Republican lawmakers already are cheerleading for a new-and-improved consumer protection agency — by which they mean that it shouldn’t do much to protect consumers.
“We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them,” said Rep. Jeb Hensarling, a Texas Republican who chairs the House Financial Services Committee and has been one of the bureau’s harshest critics.
“The CFPB tramples on the fundamental economic rights of American citizens, taking away their choices and opportunities,” he said in a statement, which included grievances about “extreme overregulation,” “higher costs” and “less access to financial products and services.”
The reality is that the CFPB has returned about $12 billion to consumers since it began operating six years ago. It has made banks straighten up and fly right, brought much-needed regulation to the payday-lending industry and — until Republican lawmakers overturned the rule — defended consumers’ right to class-action lawsuits.
Hensarling called Cordray’s departure “an excellent opportunity to enact desperately needed reforms.” He’s already made clear what he means by that.
Hensarling is the author of the Financial Choice Act, which would, among other things, strip the bureau of its authority to monitor the day-to-day activities of financial firms and prohibit it from cracking down on practices deemed unfair, deceptive or abusive.
The bill also would shut down the bureau's database of consumer complaints, which contains more than 700,000 searchable listings, and make it much easier for the president to sack the director.
“Republicans have been saying for years that Cordray is a disaster, and that his agency is a catastrophe,” said Lisa Donner, executive director of the advocacy group Americans for Financial Reform.
“People who don’t understand what the bureau does might believe that,” she said. “But if you describe the bureau’s work to people, they overwhelmingly support it.”
I sat down with Cordray when he visited Los Angeles a few months ago. I asked if it bothered him that his critics so blatantly misrepresent his and his bureau’s accomplishments.
He replied, as he always does, that his critics are free to say what they like. His job is to watch consumers’ backs.
"People are entitled to, and they deserve, someone to make sure these markets are fair and transparent," Cordray told me. "There's a need for this agency. And there's more work to do."
He said in an email to CFPB staffers last week that “we have made a real and lasting difference that has improved people’s lives.”
“I trust that new leadership will see that value also and work to preserve it — perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country.”