Gloves off in CFPB tug of war between Mulvaney, Warren

The war of words between acting Consumer Financial Protection Bureau Director Mick Mulvaney and Sen. Elizabeth Warren, D-Mass., the agency’s architect, is escalating.

In a terse letter to Warren last week, released by the agency on Friday, Mulvaney rejected accusations that the bureau’s retreat on payday lending curbs under his watch has to do with campaign donations received from the industry.

"I reject your insinuation — repeated three times in as many pages — that my actions as acting Director are based on considerations other than a careful examination of the law and facts particular to any matter," Mulvaney wrote, referring to an earlier letter from Warren to the agency’s interim chief.

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“I reject your insinuation — repeated three times in as many pages — that my actions as Acting Director are based on considerations other than a careful examination of the law and facts particular to any matter,” Mulvaney wrote in his letter to Sen. Elizabeth Warren.

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Warren wrote her letter along with Rep. Maxine Waters of California, ranking member on the House Financial Services Committee, and four other Democrats questioning Mulvaney’s decision in January to delay the agency’s payday lending rule.

“The agency barely explained its payday rule reversal,” the Democrats wrote in their letter, which was also addressed to Leandra English, who was former CPFB Director Richard Cordray’s chief of staff and is now deputy director.

In his response, Mulvaney attempted to throw the criticism over campaign funds he received from small-dollar lenders back at Warren, suggesting that her support for the CFPB’s arbitration rule, which Congress repealed, was influenced by a similar motivation.

"Prior to receiving your letter, I never would have thought to consider, for instance, whether your vote against repealing the Bureau’s arbitration rule was influenced by campaign donations you may have received from trial lawyers or other parties who stood to gain financially from the rule," Mulvaney wrote in the one-page response.

Mulvaney had said last year that Congress was in the best position to reverse the payday lending rule using the Congressional Review Act. On Jan. 16, the agency said it was reconsidering the payday rule. Two days later, Mulvaney dismissed a case against four online installment lenders, and on Jan. 22 the CFPB dropped an investigation into World Acceptance Corp.

Mulvaney said that, in the interest of "civil discourse," lawmakers should trust that he is working in the public’s interest and not make "baseless" claims.

"Shall we agree that such accusations are baseless and discuss policy matters as responsible officers holding a public trust? I await your response," he wrote.

Warren had asked Mulvaney for a list of people who provided legal advice on the payday rule and details of meetings that newly appointed CFPB staff had attended in which the rule was discussed.

Mulvaney did not respond in his letter to any of those questions, nor did he offer an explanation for why cases against installment lenders had been dismissed.

Mulvaney drew immediate criticism from consumer advocates for dropping the probe into World Acceptance because he had received at least $4,500 in campaign contributions from the company’s political action committee when he was a lawmaker from South Carolina.

Payday lenders gave $31,700 in contributions to Mulvaney in the 2015-16 campaign cycle, according to data from the Center for Responsive Politics.

On Friday, Warren and Sen. Richard Blumenthal, D-Conn., responded to Mulvaney, saying he had failed to answer their questions; they extended the deadline to March 9 for him to respond.

"We are disappointed by your response, which, instead of explaining your recent actions, raised questions about our motivations for standing up for consumers," the letter stated.

"Our January 31, 2018 letter asked a series of simple questions about the reasons for your decisions on payday lenders. But you failed to answer a single one of our questions. We have therefore reattached a copy of our letter. We ask that you provide us with answers to all of our questions by no later than March 9, 2018."



Kate Berry

Kate Berry covers the Consumer Financial Protection Bureau for American Banker.

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