Op-Ed: It’s ‘High Noon’ at the CFPB

White House budget director Mick Mulvaney, right, attends a meeting with President Trump in Washington on Nov. 28.
(Susan Walsh / Associated Press)

The bizarre standoff at the Consumer Finance Protection Bureau, where two people both claim to be the agency’s rightful leader, is mostly guerrilla theater. Almost everyone involved knows how the story will turn out in the end. Eventually, President Trump will nominate a new director who will obey his desire to be more accommodating to banks and other lenders.

But it’s a useful bit of guerrilla theater, especially for Democrats — and most especially for Sen. Elizabeth Warren of Massachusetts, who came up with the idea for the CFPB more than a decade ago and helped midwife the agency into existence during the Obama administration.

If not for the succession drama launched by Richard Cordray, a Warren ally who was the CFPB’s director, the Trump administration might have succeeded in strangling the agency quietly, in the bureaucratic equivalent of a dark alley. Until this week, few Americans even knew what “CFPB” stood for.


The noisy struggle over the bureau has become a Washington morality play. (Which character stands for vice and which for virtue depends, naturally, on which side you’re on.)

Sometimes in politics, even a losing battle can advance a cause.

Warren and other Democrats hope to use the battle to teach voters a lesson: Donald Trump, who ran for president as a champion of the little guy, is instead governing as a plutocrat, protecting Wall Street, not Main Street.

Republicans, meanwhile, hope to turn the spectacle of the defiant deputy director, a Democratic holdover, into a story about the evils of bureaucracy run amok.

Here’s what happened.

Just before quitting his post to run for governor of Ohio, Cordray announced that he was naming an aide, Leandra English, as deputy director, and said she would become acting director in his absence. Both Cordray and English were appointed by Obama.

Not so fast, said Trump’s budget director, Mick Mulvaney, a longtime critic of the agency. (He’s more than a critic, actually; Mulvaney has said he’d like to abolish the CFPB entirely.) Within hours, Trump named Mulvaney acting director instead.


On Monday morning, two would-be acting directors both said they were in charge. Mulvaney showed up at the office with a bag of doughnuts. English on Sunday filed a lawsuit to try to claim her seat and headed to Capitol Hill on Monday to meet with Warren and Senate Minority Leader Charles E. Schumer.

The legal battle, which hinges on which of two conflicting laws should apply, may take months to sort out. But the real debate over the agency’s future will be in public, in Congress and even in the streets.

Inside the CFPB building, near the White House, Mulvaney appeared firmly in charge. He imposed a 30-day freeze on new actions. “Anything that’s in the pipeline stops,” he said.

But in the street outside, Warren was speaking to demonstrators. “This agency is out there working hard for American families,” she said. “Donald Trump is hoping that the press and everyone else will talk about something other than his efforts to kick the legs out from under it.”

In fact, the CFPB has been doing a good job of fulfilling its mandate — and that’s the problem.

The agency has tormented banks and mortgage lenders that defrauded consumers, forcing them to return almost $12 billion to borrowers. The bureau has blocked abusive debt collection practices, reformed mortgage lending and investigated hundreds of thousands of complaints. It helped force Wells Fargo to agree to a $100-million settlement for saddling customers with accounts they never signed up for and charging them fees. In recent months, it opened new investigations of Wells Fargo, Zillow and other firms and drafted new regulations for the multibillion-dollar payday lending industry.

This record has had banks, their lobbyists and their representatives in Congress howling. The CFPB, they complained, was too aggressive and too independent. The agency was “trampling on capitalism,” Mulvaney said Monday, “an awful example of a bureaucracy that has gone wrong.”


And Trump agreed.

“The Consumer Financial Protection Bureau, or CFPB, has been a total disaster,” he tweeted last week. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”

There’s no evidence that the agency’s work has “devastated” lenders. American banks made record profits last year, and they’re on track to do even better this year. “You should all thank me for your bank stocks doing better,” Treasury Secretary Steven T. Mnuchin bragged at an investors’ conference last spring.

In the short run, Trump is winning this fight. Mulvaney is effectively running the CFPB. His freeze on new actions has the agency at a standstill, which is pretty much what the GOP wanted. And a federal judge on Tuesday denied English’s request for a temporary restraining order to keep Mulvaney from serving as acting director.

But the budget director can’t do two jobs forever. If Trump wants to change the CFPB for the long run, he’ll need to nominate a new director — but he hasn’t.

If Republicans in Congress want to abolish the agency or limit its powers, they can pass a law — but they haven’t. (The House has passed a bill to curb the CFPB’s enforcement powers, but it has stalled in the Senate.)


Warren, who sounds increasingly like a potential candidate for president, says she wants to have those fights, especially over the nomination of a new director. “It will be up to Senate Republicans to decide whether they want to put someone in the job who is firmly on the side of big banks,” she said.

Her goal is to make sure the battle happens in the light of day, where voters can see it. On that count, at least, she’s doing pretty well. Sometimes in politics, even a losing battle can advance a cause.

Twitter: @DoyleMcManus

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