White House Gave A Big ‘Discount’ To Banks That Abused Consumers
Reprinted with permission from Shareblue.
The Senate approved Kathy Kraninger as the new head for the Consumer Finance Protection Bureau (CFPB), but not before previous chief Mick Mulvaney could make a mockery of the agency.
Mulvaney took over the consumer protection agency in November 2017, even though he hated the agency and once said, “I don’t like the fact that CFPB exists.”
When the Washington Post delved into Mulvaney’s tenure at the CFPB, it found a disturbing pattern of Mulvaney using his position to go soft on companies that were harming consumers.
The shady behavior was so prevalent that career CFPB staffers gave it a nickname: “The Mulvaney Discount.”
In one case, career staffers recommended an $11 million fine for a South Carolina lender, Security Finance, for allegations that it improperly pressured consumers to buy insurance and approached borrowers at their homes and jobs to collect on debts, according to two people familiar with the discussions.
The recommendation went to a political appointee named Eric Blankenstein, the former private-sector lawyer who once described the bureau as “unconstitutional” in legal papers. Blankenstein ordered the staff to abandon some of their initial complaints and pushed to slash the fine, which was eventually lowered to $5 million. The company agreed to pay the penalty.
And it got worse from there.
In another case, career government lawyers tried to force a settlement with National Credit Adjusters that would have refunded $60 million to consumers. But one of Mulvaney’s political lackeys got involved, nixed the whole plan to refund consumers, and brought the total fines against the company down to a mere $800,000.
One of his final actions as director was one of his most egregious. After State Farm Bank was accused of giving credit agencies the wrong information about consumers and thereby hurting their credit scores, Mulvaney settled the case for zero fines and a promise the bank would not do it again.
The CFPB was created in the wake of the 2008 financial crisis to protect consumers against being taken advantage of by financial institutions.
President Obama’s administration embraced the agency, which the Post notes “aggressively pursued lenders and other financial firms, returning more than $12 billion to more than 29 million consumers and imposing nearly $600 million in civil penalties.”
Republicans, always willing to do the bidding of their corporate donor overlords, tried and failed to weaken or defund the agency using legislation. So Trump did the next best thing by appointing a leader willing to sabotage the agency’s work from within.
Former Rep. Barney Frank (D-MA), never one to mince words, is in no way pleased with the actions of Mulvaney and the Trump administration.
“It’s a blatant dishonesty,” Frank told the Post. “He’s accomplishing administratively what he couldn’t do legislatively.”
Mulvaney’s shady practices led one of the agency’s top student loan officers to resign in protest, accusing Mulvaney of using the bureau “to serve the wishes of the most powerful financial companies in America” instead of helping American families.
And it’s very possible that Kraninger, who previously worked in the Trump White House, will try to continue Mulvaney’s legacy of kowtowing to big business interests.
But this time, a new Democratic majority in the House will be able to hold her accountable.
Published with permission of The American Independent.