If it’s Wednesday, another request for information is probably coming from the Consumer Financial Protection Bureau.
These innocuous sounding requests — issued nearly every week this year — could prove to be acting Director Mick Mulvaney’s most effective tool in reshaping the CFPB long after his term expires.
“Mick Mulvaney has used the RFIs and other actions and pronouncements effectively for dramatic messaging, in addition to gathering support for future changes and enabling quicker action by a new leader,” Quyen Truong, a partner with Stroock & Stroock & Lavan LLP and former high-level CFPB attorney, told Bloomberg Law in an email.
Mulvaney said in a January announcement that the bureau would release a series of requests for information, or RFIs, aimed at reviewing how the CFPB did business under its former director, Richard Cordray.
The goal, Mulvaney said, was to review all of the CFPB’s “policies and practices” in order to make sure that they “align with the bureau’s statutory mandate.”
“Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process,” Mulvaney said in the January statement.
Since then, the bureau has issued eight information requests. Along with reviewing how the CFPB gets information from companies through its civil investigative demand process, Mulvaney has asked for information regarding the CFPB’s enforcement and supervision processes as well as its consumer complaint database, among other internal bureau functions.
The latest information request, released March 14, seeks comments on all of the rules that the bureau has adopted since its doors opened in 2011, excluding its payday lending rules and mortgage rules. Those regulations are already under review.
The CFPB is expected to release a similar request this week for information regarding all of the rules it inherited from other financial regulators, but did not alter.
Consumer advocates say that many of the questions the CFPB asks in its requests for information appear to be heavily influenced by the industries the bureau oversees, which may not be a surprise given Mulvaney’s longtime hostility to the bureau and its former leadership from his time as a member of Congress from South Carolina.
One example that consumer advocates point to is in the CFPB’s request for information on its administrative adjudication process.
Among the questions that the CFPB asks is whether it should make “documents available for copying or inspection, including whether the Bureau should produce those documents in electronic form to respondents in the first instance, at the bureau’s expense.”
“I think that Acting Director Mulvaney is trying to gather a grand gripe list of every nick, bruise or ruffled feather that the entire financial services industry has had over the life of the CFPB and grant all its wishes,” Christopher Peterson, a professor at the University of Utah law school and a former adviser to Cordray at the CFPB, told Bloomberg Law.
In response to a request for comment, a CFPB spokesman cited three speeches in which Mulvaney discussed the information requests.
“We want information from you,” Mulvaney said in remarks prepared for delivery at a March 1 appearance before the U.S. Chamber of Commerce. “It’s one of the reasons we’ve made all these requests for information, the reasons we’ve extended some of the dates. We want to hear from everybody.”
Mulvaney’s term as acting director is limited, capped at 210 days under the Federal Vacancies Reform Act, the law President Donald Trump used in November to appoint Mulvaney. Because of that, Mulvaney’s term is expected to end at some point in the summer, and he will likely not be in place to see the results of his information requests.
However, they will create an extensive record that either the next Senate-confirmed director, or acting director if that process stalls or Trump fails to nominate a successor, will be able to use to change the CFPB.
That could mean reopening rules for further notice and comment, or moving forward with changes to the bureau’s enforcement and other practices.
Reviewing the way an agency, particularly a relatively young agency, operates makes sense and should not be cause for alarm, said Kyle Burgess, the executive director of Consumers’ Research.
“With any young agency, it’s really important to make sure that what it’s doing aligns with its mandate,” she said in an interview with Bloomberg Law.
The sheer number of requests and their tight deadlines, plus the reviews of the payday lending and mortgage rules, will make it difficult for consumer activists and other supporters of the previous leadership of the CFPB to respond effectively to the information requests, said Joe Valenti, the director of consumer finance at the Center for American Progress.
Industry groups, with their internal resources and outside law firms and lobbyists, will have more of an opportunity to provide meaningful comments, he said in an interview with Bloomberg Law.
The sheer volume and scope of the requests also presents a challenge to industry groups, Wayne Abernathy told Bloomberg Law in a telephone interview.
Abernathy’s team at the ABA has divvied up the work and will limit responses to 10 to 20 pages so as not to overload CFPB officials, he said.
Consumer groups have smaller staffs than industry groups and do not have the luxury of dividing up the work, so as a result the comments could be heavily tilted toward industry and allow the CFPB to take its rules in a more business-friendly direction, Peterson, who also serves as a fellow with the Consumer Federation of America, said.
“The process is not a fair process, but of course it may not have been intended to be a fair process,” Peterson said.
Truong said that those concerns may be overblown.
Just because there are a lot of comments about particular rules or other CFPB processes does not mean the next CFPB director will ultimately take on a wholesale rewrite of those regulations, she said.
“The agency’s leader decides what rules it will adopt, so there’s no need to use subterfuge to achieve that,” Truong said.
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