Mulvaney Says the CFPB Will Depend Heavily on State Attorneys General for Enforcement of Consumer Protection Laws

2 minute read | March.01.2018

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, in a February 28 speech, outlined the Bureau’s overall direction and strategic priorities, and described plans to coordinate with state Attorneys General in enforcing federal consumer financial protection law. Mulvaney made the remarks in Washington, D.C., at the winter meeting of the National Association of Attorneys General (NAAG).

Mulvaney’s Remarks

Acting Director Mulvaney opened his remarks by cautioning NAAG that the press coverage regarding his intentions with the CFPB was inaccurate, as he has no plans to dismantle the agency from within. Instead, Mulvaney focused his remarks on the CFPB’s new direction and priorities under the current administration. For example, the acting director noted that the agency will devote greater resources to consumer education, instead of relying heavily on enforcement actions to ensure consumers make the correct choices, reaffirming previous remarks in a Wall Street Journal opinion piece (previously covered by InfoBytes here). Instead, he said the Bureau will pursue only clear violations of law, as opposed to what he called “creative” legal theories.

The acting director said the CFPB will depend heavily on state Attorneys General when it comes to enforcement, and particularly expressed deference to state Attorneys General and state banking regulatory agencies determining whether an institution in its jurisdiction has violated the law. He said the Bureau is less likely to initiate an enforcement action when a state Attorney General opposes the action or disagrees with the Bureau’s legal claims. However, Mulvaney noted that the CFPB will continue to review actions states take under Title X of the Dodd-Frank Act, to determine whether the CFPB should oppose or support the state.

Mulvaney said the Bureau will rely on complaint data in setting priorities, highlighting the high volume of debt collection complaints relative to other areas with lower complaint volume, such as payday lending. He also mentioned elder abuse as a priority—a common cause with many state Attorneys General. In response to a question, Mulvaney stated that he does not anticipate devoting any further resources to mandatory arbitration clauses, citing Congress overturning its arbitration rule through the Congressional Review Act as evidence the Bureau does not have the authority to do so.

He concluded his remarks by saying the CFPB will be a different agency under the current administration, but that it would continue to “enforce the law.”

Of note, Deepak Gupta—the attorney for CFPB’s Deputy Director, Leandra English—was in attendance at the NAAG meeting. English’s litigation against the appointment of Mulvaney as acting director continues with the U.S. Court of Appeals for the D.C. Circuit. On February 23, the government filed its Appellee Brief. Oral arguments are set for April 12. 

If you have questions about the remarks or other related issues, please contact an Orrick attorney with whom you have worked in the past.