Changes at the Consumer Financial Protection Bureau (CFPB) are well underway.
The CFPB released their new strategic plan for 2018-2022. This replaces their last four-year plan, in place from 2013-2017.
The old plan was mostly focused on forging a path for what, at the time, was a new bureau, primed with optimism to change the financial landscape. The new plan is much less ambitious:
|Old goals||New goals|
|Prevent financial harm to consumers while promoting good practices that benefit them.||Ensure that all consumers have access to markets for consumer financial products and services.|
|Empower consumers to live better financial lives.||Implement and enforce the law consistently to ensure that markets for consumer financial products and services are fair, transparent, and competitive.|
|Inform the public, policy makers, and the CFPB’s own policy-making with data-driven analysis of consumer finance markets and consumer behavior.||Foster operational excellence through efficient and effective processes, governance and security of resources and information.|
|Advance the CFPB’s performance by maximizing resource productivity.|
CFPB acting director Mick Mulvaney put it this way in the press release announcing the new plan: “we have committed to fulfill the Bureau’s statutory responsibilities, but go no further.” Ambitious, indeed.
What happens when anti-regulators are in charge of the CFPB
These changes are the perfect realization of the current administration’s outlook on financial market regulation.
The former director the CFPB, Richard Cordray, was put in place by President Obama to lead the agency in its infancy. Cordray stepped down late in 2017 following several setbacks which had the CFPB butting its head against a regulation-resistant administration.
President Trump appointed Mick Mulvaney to head the CFPB in November 2017. Since then, Mulvaney has taken the initial steps to rollback and soften the significant strides the CFPB has taken in consumer protection. Some of these strides have included:
- making mortgage and other financial forms more accessible by abridging them and translating them into plain English;
- receiving and addressing consumer complaints;
- filing dozens of lawsuits against financial companies for harming consumers; and
- making and enforcing new consumer financial laws.
Now, the CFPB is turning its sights from protecting consumers to protecting Big Banks.
Or, as stated in the CFPB’s press release announcing their new strategic plan:
“… the Bureau will now focus on equally protecting the legal rights of all, including those regulated by the Bureau, and will engage in rulemaking where appropriate to address unwarranted regulatory burdens and to implement federal consumer financial law and will operate more efficiently, effectively, and transparently.” [Italics added for emphasis]
In all likelihood, all of this points to fewer regulations over lenders, appraisers, banks and creditors. And we all know how well that turned out last time — the Millennium Boom was great for everyone — until it burst and plunged the nation into the worst financial crisis and recession since the Great Depression.
Want to weigh in? The CFPB is currently accepting comments on their future regulatory actions. Comments need to be submitted by April 13, 2018. Submit your comments at the Federal Register.