Analyzing BCFP’s Enforcement Activity, Professor Says Agency is Being ‘Undermined From Within’

It is undeniable that the Bureau of Consumer Financial Protection has taken fewer enforcement actions in the year following the resignation of former director Richard Cordray, who was nominated to the post by former President Barack Obama, than it did while Cordray was in office, and a law professor from Michigan State University has dug into the numbers to offer objective proof.

In the 24 months preceding Cordray’s resignation, the BCFP averaged 2.75 enforcement actions per month, while in the 12 months under acting director Mick Mulvaney, who was appointed by President Donald Trump, the agency has averaged 1.42 enforcement actions per month, nearly a 50% decline. Of the 19 actions that the agency has taken in the 12-month period, 14 of them were “clearly started” by a non-Trump appointee, it’s not clear who initiated the actions on the other five cases, and there have been no evolved enforcement actions by Mulvaney.

That number of average monthly enforcements is expected to continue dropping, Totten argues, because there is a lot of evidence to suggest that the BCFP does not have very many enforcement actions on its plate. In public statements, Mulvaney has said that there are ongoing investigations related to enforcement actions, but has not specified how many have started under his watch at the BCFP. Mulvaney has said that the era of “regulation by enforcement,” — which was a hallmark of Cordray’s tenure at the agency — is over. In seeking to delineate how the BCFP will prioritize enforcement activities going forward, Mulvaney has said that the agency will consider the scale of the violations relative to the total number of transactions when making decisions.

Citing a report from earlier in the week that detailed how Mulvaney has “curbed” the regulatory efforts at the Bureau, Totten says to expect more of the same under new director Kathy Kraninger.

“Keeping the limitations of this study in mind, the conclusion is nonetheless striking: a precipitous drop in the rate of enforcement at the CFPB since President Trump took control, with the likelihood this rate will continue to fall,” Totten wrote. “These numbers, coupled with the well-sourced reporting in the WaPo report, show an orchestrated effort to undermine the agency from within.”