‘Like a Mosquito in a Nudist Colony’: How Mick Mulvaney Found Plenty to Target at Consumer Bureau
Boxed out of budget negotiations, Mick Mulvaney’s second job running the Consumer Financial Protection Bureau represents a second chance for him to leave his mark.
WASHINGTON — In his time in the Trump administration, Mick Mulvaney has produced two budgets that slashed federal spending and were heralded as blueprints for the deconstruction of the administrative state. Even Republicans ignored them, and Congress then added billions to the very programs he targeted in what seemed a personal rebuke.
But Mr. Mulvaney — President Trump’s exasperated, restless, but deeply determined budget director — has found an alternative path to relevance in Mr. Trump’s Washington.
A firebrand fiscal hawk as a congressman from South Carolina, Mr. Mulvaney has seized on his second job as the interim chief of the Consumer Financial Protection Bureau as an opportunity to dismantle an Obama-era watchdog agency vilified by Republicans since its inception as an example of government overreach.
He is making the most of his opportunity, unapologetically attacking the signature accomplishment of one of Mr. Trump’s most nettlesome enemies, Senator Elizabeth Warren of Massachusetts, and taking on the other Democratic legislators outraged by his efforts to gut the bureau.
“There are lots of targets of opportunity over there for Mick,” said Marc Short, Mr. Trump’s legislative affairs director. “He’s like a mosquito in a nudist colony.”
Testifying last month about the bureau before the House Financial Services Committee, Mr. Mulvaney looked forlorn as he slumped under a whirring national debt clock projected on the wall by committee Republicans, a reminder of his failure to rein in federal spending. Then Democrats started attacking him and he sprung to life like a Jack Russell terrier off leash.
Representative Keith Ellison of Minnesota struck first, chiding Mr. Mulvaney for installing frosted glass on the glass walls of his office, what he described as a literal effort to subvert “transparency.”
“I’ve been to your office,” Mr. Mulvaney shot back. “I can’t see into it.”
But Mr. Mulvaney’s intentions at the bureau are anything but opaque.
Since taking over in November, he has halted all new investigations, frozen hiring, stopped data collection and proposed cutting off public access to a database of consumer complaints. He dropped most cases against payday lenders — a primary focus of the consumer bureau — and also proposed scrapping a new rule that would have heightened scrutiny of an industry accused of trapping vulnerable customers in a cycle of debt. And he has tried hard to persuade Congress to take away funding authority for the bureau from the Federal Reserve — so that Congress can cut it.
Since taking over in November, he has halted all new investigations, frozen hiring, stopped data collection and proposed cutting off public access to a database of consumer complaints. He dropped most cases against payday lenders — a primary focus of the consumer bureau — and also proposed scrapping a new rule that would have heightened scrutiny of an industry accused of trapping vulnerable customers in a cycle of debt. And he has tried hard to persuade Congress to take away funding authority for the bureau from the Federal Reserve — so that Congress can cut it.
Polite Civil War
Mr. Mulvaney insists he has the bandwidth for both the budget and consumer jobs — and, in a sign of his seriousness, has brought over his top communications adviser from the Office of Management and Budget. But he is an intermittent presence at the bureau’s headquarters, according to current and former staff members. He works there no more than two or three days a week, a few hours at a time, and seldom on Saturdays, as he initially suggested he would do.
Some Republicans question the wisdom of Mr. Mulvaney’s working only part time as the director, whose duties include reviewing major regulations coming out of any federal agency as a federal court deliberates the legality of his running an independent agency like the Consumer Financial Protection Bureau.
“I’m sure it’s hard to wear those two pretty big and important hats,” said Senator John Kennedy, Republican of Louisiana. “I think being O.M.B. director is a full-time job; he’s probably spread pretty thin.”
At the bureau’s headquarters near the White House, Mr. Mulvaney has touched off a polite but ferocious civil war, walling himself off behind the new frosted glass walls, while career civil servants, largely excluded from decision making, battle him to preserve the original mission of the agency.
Mr. Mulvaney, a hypercompetitive golfer with an 8 handicap, is determined to prevail while maintaining he is strictly adhering to dictates of the law. In his view, that means giving equal weight to reducing “burdensome regulations” on the industries he regulates, as he described his approach to a meeting of lenders last month.
During his April congressional testimony, Mr. Mulvaney said career lawyers were proceeding with about 25 existing cases. But enforcement lawyers said they have been asked to draft extensive memos for the bureau’s new political leadership to justify their work.
Some cases have been closed or paused indefinitely, and several current bureau staff members expressed concern that Mr. Mulvaney could soon drop a major case against Navient, the student loan company accused of cheating borrowers.
Last month, in what seemed like an unexpected return to the bureau’s Obama-era enforcement, Mr. Mulvaney announced a $1 billion fine against Wells Fargo for well-documented abuses within the bank’s consumer and auto loan divisions.
But the case was in the works before Mr. Mulvaney’s tenure and had the public support of Mr. Trump, who warned in a Twitter post in December of “fines and penalties” against the bank after a news report said that Mr. Mulvaney was considering dropping the case.
“I’m glad that the really devoted public servants at the bureau were allowed to do their jobs this one time,” Richard Cordray, the Democrat who ran the bureau from its inception in 2011 to last November, when he resigned to run for governor of Ohio, said, referring to the Wells Fargo case. “I guess it would have been embarrassing to let someone get away with doing something this gross.”
Mr. Mulvaney’s move to weaken the bureau’s consumer protection efforts have prompted some state attorneys general to fill the void.
“As it became clear that they were not going to be pursuing these cases and working with us, we picked up the slack,” said Josh Shapiro, Pennsylvania’s Democratic attorney general.
Wooing the President
But Mr. Mulvaney’s approach is finding favor with the person who may matter the most: the president. Mr. Trump, several administration aides said, is delighted at the idea of Ms. Warren watching an institution she spent years building being undermined from within — and eager to see Mr. Mulvaney continue waging a battle to reduce federal regulations through the Office of Management and Budget.
Mr. Trump was so intent on changing the consumer bureau’s direction that he planned to fire Mr. Cordray as soon as he became president, but he was talked out of it by advisers. They pointed out that under the statute creating the agency, the president can remove the bureau’s director only for “inefficiency, neglect of duty or malfeasance,” and advised that he wait to make a recess appointment.
Mr. Trump did not like waiting. At one point last summer, he instructed the White House operator to call Mr. Cordray so he could fire him but was talked down by John F. Kelly, according to two former administration officials. In late November, Mr. Cordray resigned and installed his deputy, Leandra English, as acting director. That set off a scramble within the White House to shove Ms. English aside.
The White House, seeking to avoid a new confirmation battle, considered sliding the Treasury secretary, Steven Mnuchin, into an interim leadership role. Gary D. Cohn, then the chairman of Mr. Trump’s National Economic Council, lobbied for Mr. Mulvaney, his sometimes golf partner. Mr. Mulvaney leapt at the chance, arguing that he would be aggressive in dismantling the bureau, according to an administration official.
Democrats have questioned Mr. Mulvaney’s relationships with the industry he is supposed to be policing. At a Senate Banking Committee hearing, Senator Sherrod Brown, Democrat of Ohio, asked Mr. Mulvaney if he had ever “rubbed elbows with payday C.E.O.s or their lobbyists and lawyers in exotic locations.”
Mr. Mulvaney, who took about $63,000 from the payday industry while in Congress, said “the only contact” he had “was in the ordinary course of business,” a response that turned out to be untrue.
In February, Mr. Cohn had invited Mr. Mulvaney to a tournament at an exclusive club in the Bahamas. Eating lunch, they were approached by J. Paul Reddam, the founder of CashCall, who told Mr. Mulvaney he wanted to discuss the bureau’s case against the California-based lender over high-cost loans. Mr. Mulvaney responded that he thought all of the payday cases had already been dismissed, but would refer the request to a deputy, according to two people with knowledge of the encounter.
The intervention had no apparent effect. Career lawyers at the bureau recently appealed a judge’s order that reduced CashCall’s fine to $10 million from the proposed $287 million.
Mr. Mulvaney’s position was that Mr. Reddam was the head of a mortgage company, not a payday lender.
“I think this administration has a lot of trouble with the truth,” Mr. Brown said.
Limited Reach
Sometimes it is telling too much truth that has gotten Mr. Mulvaney into trouble. Last month, he breezily informed a conference of 1,300 bankers and their lobbyists that he had a standing rule in his congressional office: “If you’re a lobbyist who never gave us money, I didn’t talk to you.”
His comments annoyed White House officials and prompted calls among Democrats, including Mr. Brown, to investigate whether he had committed a violation of federal Hatch Act pay-to-play rules.
Mr. Mulvaney does not lack confidence — he listed a membership to MENSA on his personal biography during his 2017 confirmation hearings. (An aide said he quit the high I.Q. society in 2004, after four years, to save on the dues.) And he is fond of making a stir. When reporters posted pictures on Twitter of his aides sipping beers on the balcony of the budget office near the White House last summer, he shrugged off a suggestion to scrap or relocate his Friday office happy hours.
“Hey, we already took the hit in the media, so let’s keep doing it,” he told a colleague at the time.
During a pre-inauguration tour of the offices, Mr. Mulvaney skipped policy questions and instead asked about the gym and whether there was a place to sleep in his office. When they got to the White House mess hall, he was unimpressed with the tacos, telling his predecessor, Shaun Donovan, the meal did not measure up to the Mexican restaurants he once owned in Charlotte, N.C., according to a person to whom Mr. Donovan related the encounter.
Mr. Mulvaney has not wielded much power over the budget and played a back-seat role in budget negotiations. Senator Mitch McConnell, Republican of Kentucky and the majority leader, did not consider him a central player, Republican aides who do not work for the majority leader said.
Senator Susan Collins, Republican of Maine, who leads a powerful appropriations subcommittee, recently told a friend that Mr. Mulvaney’s proposed cuts were “absurd” and proved he was not a “serious” negotiator, according to a Republican official with knowledge of the exchange.
Still, he has not given up — he has been prodding Mr. Trump to demand a symbolic $20 billion to $30 billion in cuts to social programs and the State Department’s foreign aid budget, according to an administration official with knowledge of his plans. Mr. Trump plans to send a letter to Congress this week asking to cut a fraction of that amount — about $15 billion. The savings would come partly from unused Obama-era funds that were already appropriated but never spent.
Mr. Mulvaney seems happiest when describing new ways to undermine the consumer bureau by, say, removing its online complaint system from public view — or using the agency’s obscure statutory name, the “Bureau of Consumer Financial Protection,” to undo years of branding.
“The reading of the statute actually revealed some very fun things,” an excited Mr. Mulvaney told his friendly audience of bankers last week. “C.F.P.B. doesn’t exist! C.F.P.B. has never existed!”
A version of this article appears in print on , on Page A15 of the New York edition with the headline: Budget Hawk Hones Claws At Top of Consumer Bureau.
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