Mulvaney: Congress must enact four changes in law for CFPB to curb power, provide accountability

Calling the agency he oversees “too powerful with precious little oversight,” the acting director of the federal consumer financial protection agency on Monday recommended four changes to the law that created the agency, with the first being to change the agency’s funding mechanism to congressional appropriations.

In the semiannual report of the Consumer Financial Protection Bureau (CFPB), Acting Director Mick Mulvaney said the power wielded by the office he holds “could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets.”

In a release, Mulvaney said he is requesting that Congress make four changes to the law establishing the bureau “to establish meaningful accountability” for the agency.

The changes Mulvaney outlined include:

  • fund the agency through the congressional appropriations process (rather than from the Federal Reserve);
  • require legislative/congressional approval of major rules;
  • ensure that the agency director answers to the president “in the exercise of executive authority”;
  • create an independent inspector general for the agency.

Mulvaney provided insights to his recommendations in an introduction letter to the report (which typically outlines the agency’s activities over the previous six months).

“Per the statute, in the normal course the Bureau’s Director simultaneously serves in three roles: as a one-man legislature empowered to write rules to bind parties in new ways; as an executive officer subject to limited control by the President; and as an appellate judge presiding over the Bureau’s in-house court-like adjudications,” Mulvaney wrote.

“By structuring the Bureau the way it has, Congress established an agency primed to ignore due process and abandon the rule of law in favor of bureaucratic fiat and administrative absolutism,” he stated.

Mulvaney acknowledged that many members of Congress may disapprove of the actions he has taken as acting director, “just as many Members disagreed with the actions of my predecessor,” he wrote.

“Such continued frustration with the Bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred. This cycle will repeat ad infinitum unless Congress acts to make it accountable to the American people,” Mulvaney wrote.

Semi-annual report of the Bureau of Consumer Financial Protection