Under prior director Richard Cordray, the Consumer Financial Protection Bureau earned a reputation as an extremely aggressive regulator. However, since acting director Mick Mulvaney took office more than four months ago, the agency has not brought a single enforcement action.
Mulvaney has said that, in general, the CFPB will only go after egregious cases of consumer abuses. “Good cases are being brought. The bad cases are not,” he said at an event in Washington this month.
To that end, Reuters is reporting that the CFPB has decided not to file a lawsuit against a collection agency that collects on payday loans, despite the agency apparently getting the green light to move forward from former director Richard Cordray before he resigned. Cases against three other payday lending operations for engaging in illegal collection activities are also reportedly on the chopping block.
The CFPB’s new direction regarding enforcement actions was foreshadowed in January when Mulvaney, in a letter to Fed Chairwoman Janet Yellen, requested no funding for the CFPB’s second fiscal quarter budget. Mulvaney noted that the agency already had $177.1 million in its coffers — more than enough funds to cover the agency’s expenses. “Simply put, I have been assured that the funds currently in the bureau fund are sufficient for the bureau to carry out its statutory mandates for the next fiscal quarter while striving to be efficient, effective and accountable,” Mulvaney wrote in the letter. The excess funds were part of a “reserve fund” formerly maintained by Cordray. Mulvaney said he did not see a reason for the fund since the Federal Reserve has regularly supplied the money the agency needs.
Troutman Sanders LLP will continue to monitor developments regarding CFPB funding and enforcement activity.