In a memorandum to Consumer Financial Protection Bureau ("CFPB") employees, Acting Director Mick Mulvaney outlined his approach to governing the agency.
After disputing reports that he intends to shut down the CFPB, Director Mulvaney made it clear that the agency will adopt a different approach from that of his predecessor, former Director Richard Cordray. Director Mulvaney said that the agency will pull back on aggressive actions and no longer seek to "push the envelope." Instead, he pledged that the CFPB will focus on protecting consumers without immediately looking to pursue aggressive enforcement actions. Director Mulvaney asserted that vigorous action will be pursued when necessary, but "only reluctantly, and when all other attempts at resolution have failed."
Director Mulvaney shared that the CFPB will undertake a comprehensive review of its policies, procedures, and strategies. Specifically, he promised that the agency will be less focused on filing lawsuits, and will engage in more formal rulemaking to provide clarity to market participants. He explained that the CFPB will reorganize its priorities, and employ quantitative analysis to determine whether agency efforts are appropriately taking into account costs and benefits of a particular action.
Director Mulvaney expressed a commitment to a "new mission" focused on "faithfully enforc[ing] the law" in accordance with the CFPB's Congressional mandate, but without expanding authority or seeking to push its boundaries.
Commentary
While Mr. Mulvaney's statement will undoubtedly attract some negative reaction, he is describing the right approach to managing the CFPB. The notion that government regulators should "push the envelope" in seeking to expand the scope of their legal mandate is offensive. It is the job of Congress or the legislators to write laws that are both good and clear, and the job of the regulators to write rules that are good and clear. Once those good and clear laws and rules are established, regulators and enforcement actions should seek to enforce those laws, by judicial action where necessary, within their bounds. If those bounds are not broad enough, it is not appropriate for regulators to expand them through creative enforcement actions; they must go back to Congress for authority. Those defending against the government are entitled to be creative; those serving the government need to be restrained by due process.
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