The government's lending watchdog "is far too powerful" and operates with "precious little oversight" — and must be drastically restructured by Congress, its current interim head, Budget Director Mick Mulvaney, is recommending.
Mulvaney, who was named acting director of the Consumer Financial Protection Bureau last November by President Donald Trump, wrote in the agency's semi-annual report that "the structure and powers of this agency are not something the Founders and Framers would recognize."
"As has been evident since the enactment of the Dodd-Frank Act, the bureau is far too powerful, and with precious little oversight of its activities," Mulvaney wrote in the report.
Mulvaney is making four recommendations to Congress: to take control of the bureau's funding, to make CFPB directors fireable, at will, by the president, to install an inspector general, and to give itself the sole power to finalize the bureau's rules.
All four new demands were part of a bill on which Mulvaney, when he was a GOP lawmaker, voted, and which passed the House but has not seen any action in the Senate, The Hill reported.
Established in 2013 under the Dodd-Frank Act, the bureau was created to be an independent watchdog to weed out predatory lending and other fraudulent activity, and is funded through the Federal Reserve system. Currently, the CFPB has the authority to create its own rules to protect consumers, including one that would force high-interest-rate lenders to make sure that customers taking out more than one loan are able to pay them off.
Democrats and financial sector critics lauded its former director, Richard Cordray — who resigned last November to run for Ohio governor — but Republicans and subjects of CFPB oversight complained the agency abused its authority and hindered businesses, The Hill noted.
Since Mulvaney's appointment, he has delayed the first deadline of a rule on short-term, high-interest or "payday" loans set to go into effect this year; ended several lawsuits initiated by Cordray; and has asked for critiques on close to every aspect of the CFPB's regulatory and enforcement practices, The Hill reported.
"I have no doubt that many Members of Congress disagree with my actions as the Acting Director of the Bureau, just as many Members disagreed with the actions of my predecessor," Mulvaney wrote.
"Such continued frustration with the Bureau's lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred. This cycle will repeat ad infinitum unless Congress acts to make it accountable to the American people."
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