Mulvaney Taps Ex-FTC Consumer Chief to Oversee CFPB Rulemaking

By Evan Weinberger

Thomas B. Pahl, who had been leading consumer protection issues at the Federal Trade Commission, has joined the Consumer Financial Protection Bureau as a political appointee to oversee the bureau’s regulatory efforts.

Pahl, a former CFPB official, had been serving as the acting director of the FTC’s Bureau of Consumer Protection until April 13. In his new role at the CFPB, Pahl will oversee the CFPB’s Division of Research, Markets & Regulation, including the work of Associate Director David Silberman and Assistant Director Kelly Cochran, who ran the bureau’s regulatory efforts under former Director Richard Cordray.

David Mayorga, a CFPB spokesman, confirmed Pahl’s appointment.

The FTC confirmed that Pahl’s last day at the commission was April 13.

Acting FTC Chair Maureen Ohlhausen appointed Pahl to lead the FTC’s consumer protection efforts in February 2017. Pahl has served in several positions at the FTC and the CFPB, including working on previous CFPB efforts to update rules for debt collection under the Fair Debt Collection Practices Act.

Pahl spent time as a partner with Arnall Golden Gregory LLP beginning in September 2016, between his stints at the CFPB and the FTC.

Debt Collection Rules Coming?

Debt collection is one area where the CFPB could move forward with rulemaking, Mick Mulvaney, President Donald Trump’s choice to lead the CFPB as acting director, has indicated. However, most observers believe the bureau will take a different approach under Mulvaney than under Cordray.

“Pahl’s return and new management at the top may help the debt collection industry and consumers, because now there’s the potential for a renewed focus on moving forward with sensible and balanced rules that stakeholders can support,” Jonathan Pompan, a partner at Venable LLP who focuses on debt collection issues, said in an email to Bloomberg Law.

One area that has drawn significant interest is whether lawyers should be covered under the FDCPA. The CFPB has targeted several law firms for improper debt collection practices.

But Pahl said in a December op-ed in Inside ARM that the FDCPA should not cover attorneys. Instead, state legislation and bar rules should be sufficient to protect consumers from abuses by attorneys.

“In conclusion, state courts and state bars should continue to be the main actors protecting consumers from the conduct of attorneys in debt collection litigation,” Pahl wrote in the op-ed with Matthew Wilshire, a senior attorney in the FTC’s Division of Financial Practices. “FTC enforcement of the FTC Act, not the application of the FDCPA, should be the backstop for the states.”

Familiar Figure

The new overseer of CFPB regulatory activities has developed at least some trust with consumer advocates from his past work at the bureau and the FTC.

Ira Rheingold, the executive director of the National Association of Consumer Advocates, said in a telephone interview that Pahl is a “good attorney, a smart guy and a decent fellow.”

But the CFPB under Mulvaney has not earned trust, Rheingold said.

“Do I trust this agency to do a good job on debt collection rules? God no,” Rheingold said.

Pahl’s appointment is the latest in a string of political hires by Mulvaney to oversee bureau efforts. J. Reilly Dolan, who had been serving as acting CFPB deputy director, was named the head of the Bureau of Consumer Protection, replacing Pahl, according to Peter Kaplan, an FTC spokesman.

Most of Mulvaney’s appointees have come from the House Financial Services Committee’s majority staff and other Republican bastions, and for the most part, they have received significant pay bumps, according to documents reviewed by Bloomberg Law.

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