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Mulvaney Strips Consumer Watchdog Office of Enforcement Powers in Lending Discrimination Cases
Monday, February 5, 2018 6:40 AM

The battle for control of the Consumer Financial Protection Bureau continues. Acting Consumer Financial Protection Bureau Director Mick Mulvaney has stripped the agency's fair-lending office of enforcement powers in a sign that many consumer advocates see as trying to reduce oversight and penalties for firms that discriminate against borrowers.

The move to sharply restrict the responsibilities of the Office of Fair Lending and Equal Opportunity comes about two months after President Trump installed his budget chief, Mulvaney, at the head of the bureau. The office previously used its powers to force payouts in several prominent cases, including settlements from lenders it alleged had systematically charged minorities higher interest rates than they had for whites.

That unit now will move inside the office of the director, where staffers will be focused on "advocacy, coordination, and education," according to an email Mulvaney sent them this week. They will no longer have responsibility for enforcement and day-to-day oversight of companies, he wrote.

The reorganization comes as Mulvaney looks to remake the agency into one that shows far more restraint than it did under his Democratic predecessor, Richard Cordray.

Beyond moving the fair-lending office, Mulvaney has also dropped a lawsuit against payday lenders and said the agency will reconsider rules the financial industry complained would be particularly onerous. He also updated the bureau's mission statement to include addressing "outdated, unnecessary, or unduly burdensome regulations."

In his recent memo to staffers, Mulvaney said the CFPB would still look to protect consumers but would not try to "push the envelope."

"Bringing the full weight of the federal government down on the necks of the people we serve should be something that we do only reluctantly, and only when all other attempts at resolution have failed. It should be the most final of last resorts," he wrote.

Civil rights and consumer groups said separating the fair-lending office from its enforcement power weakens its power to pursue cases.

"These changes... threaten effective enforcement of civil rights laws, and increase the likelihood that people will continue to face discriminatory access and pricing as they navigate their economic lives," Lisa Donner, executive director of Americans for Financial Reform, said in a statement.

Mulvaney's spokesman dismissed the criticism, saying the agency would continue to pursue fair-lending cases.

Read more at Washington Post.