In mid-May 2018, per multiple reports, John Michael “Mick” Mulvaney, the acting director of the Consumer Financial Protection Bureau, announced plans to fold the CFPB’s Office of Students and Young Consumers into its preexisting Office of Financial Education, itself a part of this agency’s Consumer Education and Engagement Division. During this reorganization, the Office of Financial Education will also subsume the Student Loan Ombudsman, a position created by the Dodd-Frank Act. Because of this rejiggering, to be effectuated concurrently with the hiring of more political appointees and the creation of an office of cost-benefit analysis set to report to Mulvaney alone, the current staff of the Office of Students and Young Consumers will be reassigned to yet unknown positions.
Critics have pounced on and decried this development. As some noted, this proposal would end the Office of Students and Young Consumers’ participation in all investigations that could potentially result in supervisory or enforcement actions against student loan lenders and servicers. The CFPB may still pursue such investigations, many promptly acknowledged. Nonetheless, many fear that Mulvaney’s change may muzzle one of the CFPB’s most aggressive units – the only one exclusively focused on purported misdeeds within the student loan field and solely dedicated to protecting student loan borrowers. Giving voice to these concerns, Senator Patty Murray (D-Wash.), the ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, thundered on May 9: “President Trump is giving student loan corporations the green light to take advantage of students without fear of repercussion and sending a clear message to students that this administration is not interested in their best interests when it gets in the way of corporate profits.”
To close observers, this latest decision was neither unusual nor surprising. Rather, it fit the general pattern of regulatory retreat characteristic of the CFPB since Mulvaney’s still-unconfirmed appointment as director, as two other recent examples aptly show:
- In February 2018, Mulvaney transferred the CFPB’s Office of Fair Lending from the Supervision, Enforcement, and Fair Lending Division (“SEFL”) to the Director’s Office, thereby making it a part of the Office of Equal Opportunity and Fairness and stripping it of its enforcement powers. “The Fair Lending Office will continue to focus on advocacy, coordination, and education, while its current supervision and enforcement functions will remain in SEFL,” Mulvaney explained in an internal memo. In response, Senator Elizabeth Warren (D-Mass.) accused Mulvaney of “putting the Office of Fair Lending under his control so that he can weaken it” and, as a result, “leaving neighborhoods and consumers across the country more vulnerable to bias.”
- In the spring of 2018, Mulvaney revealed, via a request for information published in The Federal Register on April 17, that he is mulling ending the public availability of the CFPB’s consumer complaint reporting database. In a frank baring of his position, Mulvaney mused at a banking industry conference, with a copy of the 2010 Dodd-Frank legislation that established the CFPB in hand: “I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government.” For now, the period for comment is scheduled to close on July 16, 2018.