In a leaked email to staff on Tuesday, Consumer Financial Protection Bureau (CFPB) Acting Director Mick Mulvaney declared that the old days of “pushing the envelope” are no more and the Bureau will realign its mission to act with “humility and prudence.” Since the Bureau’s creation, financial service providers, members of Congress, and other political leaders have repeatedly critiqued its practice of regulating by enforcement whereby businesses were expected to glean the CFPB’s expectations from enforcement actions against others. Few companies ever challenged the Bureau in court and those who did expended immense resources. For others, the mere specter of a CFPB Civil Investigative Demand (CID) was enough to destroy relationships with business partners or cause a company to close without any allegations of wrongdoing having been proven.
Mulvaney recognized this power imbalance and implored staff to consider it as well: “If a company closes its doors under the weight of a multiyear Civil Investigative Demand, you and I will still have jobs at C.F.P.B. But what about the workers who are laid off as a result?” Going forward, the Bureau will focus its efforts on harms backed by quantitative evidence, issue more regulations so businesses know what is expected, and prioritize areas that drive consumer complaints. Companies that engage in debt collection, both first and third party, should take heed of the last goal because over a third of consumer complaints filed with the CFPB in 2016 related to debt collection practices.
Following on the heels of Mulvaney’s email, the Bureau released its first Request for Information seeking public comment on improving the CID process to make it more effective and less burdensome. Comments will be accepted for 60 days after the RFI is published in the Federal Register (expected to be January 26th). M&S urges all participants in the financial services marketplace to submit comments and engage with the Bureau as it redefines its mission.