CFPB's Mulvaney: Maybe Someone Else Should Regulate Payday Lenders

State legislatures and Congress may be better equipped to regulate payday lenders than the CFPB, acting agency Director Mick Mulvaney said Thursday.

“It would be a lot easier if you legislated and we enforced,” Mulvaney told the Senate Banking Committee.

The CFPB, under former Director Richard Cordray, issued strict regulations attempting to rein in payday lenders the agency believed were saddling borrowers with loans that have excessive fees and interest rates.

Upon taking over from Cordray, Mulvaney announced that he intended to revisit the rule; he emphasized Thursday that he has not completed that review.

“I have no idea what I’m going to do on payday,” he said.

He added, however, that the agency’s payday lending rule was the last major issue that Cordray tackled before he resigned to run for Ohio governor, saying that some people believed the rule was rushed.

Several state legislatures have attempted to deal with the payday lending issue, with mixed results. For instance, the Florida legislature this year expanded the services that payday lenders can offer—a bill that was opposed by the state’s credit unions.

Mulvaney was President Trump’s choice for acting director until the president nominates his replacement. The choice is being challenged by agency Deputy Director Leandra English, who has argued in federal court that under the provisions of Dodd-Frank, she should be running the agency.

Questioned about what English currently does at the agency, Mulvaney replied, “I honestly don’t know. I’ve never met her.”

Republicans praised Mulvaney for trying to rein in an agency they said was out of control in the past and endorsed his proposal to bring the CFPB into the appropriations process.

But Democratic senators Thursday sharply criticized Mulvaney’s work at the agency, as Democrats on the House Financial Services Committee did on Wednesday.

Senate Banking ranking Democrat Sherrod Brown (D-Ohio) told Mulvaney he is “completely failing” in the agency’s mission to protect consumers.

“At the CFPB, he’s handing out favors to Wall Street and shady lenders,” Brown said.

And he criticized Mulvaney for bringing political appointees into the agency for the first time.

“He’s lining the pockets of his top four political appointees with over $1 million in salaries but hasn’t taken on a single enforcement action that would continue the CFPB’s good work of putting money back in the pockets of consumers harmed by shady lenders and financial scammers,” Brown said.

Sen, Richard Shelby (R-Ala.) had a vastly different assessment of Mulvaney’s work.

“You’ll bring a ray of sunshine to a black hole of bureaucracy,” he told the acting director.

Mulvaney said he shared the concerns that Republican senators raised about the agency’s past data collection and potential security lapses. He said the agency has become “extraordinarily judicious” in collecting data.

When he took office, Mulvaney instituted a temporary halt to the collection of much of the data the agency had collected, in an effort to assess data security issues.

“You don’t have to protect what you don’t have,” he added.

However, Sen. Mark Warner (D-Va.) said data security issues should not stop the agency from collecting data.

“The information the CFPB collects is on a macro basis,” he said.

Mulvaney has been having a long-distance battle with Sen. Elizabeth Warren (D-Mass.), who as an advisor to President Obama helped design the agency. Mulvaney has said that his work at the agency probably keeps Warren up at night—a notion that does not upset him.

During Thursday’s hearings, Warren cited the number of times that Mulvaney had voted to abolish the agency during his tenure as a House member from South Carolina.

Mulvaney said that if the agency was not in existence, other financial regulators would step in to help protect consumers.

But referring to Mulvaney’s personal comments, Warren said, “This isn’t about me,” adding that “You’re hurting real people to achieve cheap political points.”