Mick Mulvaney, director of the Office of Management and Budget, has disbanded three advisory boards at the scandal-ridden Consumer Financial Protection Bureau (CFPB), where Mulvaney also serves as interim director.
His decision was communicated to members of the boards via an email and conference call on Wednesday, the members said.
The bureau told members it was disbanding the Consumer Advisory Board (CAB), which is required by law to meet twice a year, as well as the Community Bank Advisory Council and the Credit Union Advisory Council, in order to save costs.
The CFPB plans to reconvene the boards with fewer members in the fall, and instead increase outreach to the public via events in Washington and elsewhere, former board members said.
CFPB was set up in 2010, after the financial crisis, by the Dodd–Frank act as the most independent and also the most unaccountable federal agency. Its director was practically impossible to remove and Congress couldn’t even defund it, because it was financed by Federal Reserve profits.
It was supposed to protect customers of the financial industry, but it was hit with one scandal after another until a federal court trimmed its power in 2016 by allowing the President to appoint and fire its director.
“[T]he Director of the CFPB possesses enormous power over American business, American consumers, and the overall U.S. economy. The Director unilaterally enforces 19 federal consumer protection statutes, covering everything from home finance to student loans to credit cards to banking practices. The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law; and what sanctions and penalties to impose on violators of the law,” explained the three-judge panel in its ruling.
Since its beginning, the bureau has been accused of extreme partisanship.
According to former CFPB enforcement attorney Ronald Rubin, since its inception, the bureau has been managed with the intent to only hire left-leaning staff and quickly developed an informal scheme to vet new applicants for ideological purity.
All of the more than 300 donations its employees made toward 2016 presidential campaigns went to Democrats, The Washington Free Beacon reported.
Instead of going after the worst offenders within the financial industry, the bureau instead focused on the ones who could afford to pay the highest fines that looked good in press releases.
“Targets were almost certain to write a check, especially if they were accused of subjective ‘unfair, deceptive, or abusive acts or practices,’” Rubin wrote in a National Review op-ed. “Even the size of the checks didn’t depend on actual wrongdoing—during investigations, Enforcement demanded targets’ financial statements to calculate the maximum fines they could afford to pay.”
While the bureau used controversial statistical arguments to accuse companies of discrimination in lending practices, its own former senior equal employment specialist criticized “the culture of discrimination and intimidation at the bureau” in her congressional testimony.
Meanwhile, the bureau spent $124 million to renovate its headquarters across the street from the White House—costing more per square foot than the construction of Trump World Tower, The Daily Caller reported.
In his former role as Congressman (R-S.C.), Mulvaney called the structure of the bureau, before it was amended by the court, “a joke . . . in a sad, sick way.”
Since Trump appointed him in November, Mulvaney has vowed to completely overhaul the bureau.
Reuters contributed to this report.
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