President Trump's consumer chief, Mick Mulvaney, has delayed rules to rein in payday loans, dropped lawsuits against payday lenders, and stripped enforcement of fair-lending protections.
Now the White House wants to weaken his office even further. And many Democrats are asking: Can the Consumer Financial Protection Bureau still protect consumers?
The bureau was created by the 2010 financial reform law known as Dodd-Frank. Its mission was to protect American consumers from predatory lenders and bullying debt collectors. But it has reversed course under Mulvaney, the interim director appointed by Trump last November.
The White House on Monday proposed to cut the consumer bureau's budget and limit its enforcement power.
Under the proposal, the bureau would be funded by Congress, not the Federal Reserve. And its budget for next year would be capped at $485 million - the level from three years ago, and down from a projected $630 million this year.
Congress will ultimately decide whether those changes go through. But the administration's blueprint served as yet another example of the agency's U-turn.
The White House said in its proposal that the agency is an "unaccountable bureaucracy with unchecked regulatory authority."
Consumer advocates and Democrats were left fretting over its future.
"Now is not the time to let Wall Street and payday lenders call the shots on the budget," said Senator Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee.
Senator Jeff Merkley, a Democrat from Oregon, sharply criticized Mulvaney during a hearing Tuesday on the president's budget.
"How about accountability?" he said. "How about that concept in the work of what used to be our consumer watchdog that now is the consumer-rollover-and-let-the-big-companies-scratch-their-bellies organization?"
A five-year plan released by Mulvaney would have the bureau "go no further" than its powers under the 2010 law. He called it a "bulwark against the misuse of our unparalleled powers."
Since his appointment, Mulvaney has pressed ahead in restructuring an agency he believes has too much power and has often acted too aggressively.
Already, the bureau has delayed rules to rein in payday lenders that cash-strapped Americans often use to obtain small amounts of cash - typically between $200 and $1,000. Usually the money needs to be paid back in full when a borrower receives his or her next paycheck, and such loans often come with exorbitantly high interest rates.
At the hearing, Mulvaney disputed that he killed a rule protecting consumers.
"I think it's inaccurate to say that we've wiped out the payday rule," Mulvaney said in an exchange with Merkley. "We've simply given notice that we're going to take additional comments on additional rule making."
Merkley argued that those steps prevented the rule from going into effect.
"You delayed it," Merkley said. "I'm not sure why you're dancing around about it because you seem pretty happy about having done so to help out these payday loan companies charging 500 to 1,000%."
Under Mulvaney, the agency has also dropped lawsuits against four payday lenders.
The agency had accused the lenders of deceiving consumers and unlawfully withdrawing from their bank accounts to pay debts they didn't legally owe. Two of the firms, Golden Valley and Silver Cloud Financial, have offered online loans of $300 and $1,200 with interest rates up to 950%.
Mulvaney told lawmakers he ended the lawsuit.
"Yes, sir," Mulvaney said when asked by Senator Chris Van Hollen, a Maryland Democrat. He declined to comment further given the agency's pending investigation into the matter.
Earlier this month, Mulvaney launched a review of the agency's operations and removed enforcement powers of a division that overseas financial companies that discriminate against Americans.
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