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It’s hard to imagine, but America is approaching the ten-year anniversary of the financial crisis that led to the Great Recession. One unfortunate government response to that crisis was the formation of the Consumer Financial Protection Bureau. This new agency, the dreamchild of Sen. Elizabeth Warren (D-Ma.) and headed by Richard Cordray, had regulatory overreach virtually born into its DNA. Cordray promised to “push the envelope” and that’s what he did; turning the agency into his personal fiefdom and rewriting laws as he went along.
Cordray even tried to handpick his own successor despite a transfer of power resulting from the 2016 election. Instead, President Donald J. Trump appointed Mick Mulvaney as the new acting director of the CFPB. Mulvaney pledged balance and fairness as the Bureau’s new head. “We don’t just work for the government, we work for the people, “Mulvaney wrote in a memo to his staff, “And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cars and this who sell them. All of those people are part of what makes this country great. And all of them deserve to be treated fairly by their government. There is a reason that lady justice wears a blindfold and carries a balance, along with her sword.“
Mulvaney has delivered on his promise of fairness. Under his leadership, the CFPB has been reconstructed into a fair, even-keeled government organization designed to protect consumers without deliberately trying to damage private companies.
Now begins yet another new chapter for the CFPB. President Trump has said he will nominate Kathy Kraninger to replace Mulvaney as the Bureau’s permanent director. As Mulvaney winds down his leadership of the CFPB, he ought to hand off to Kraninger a clean slate by closing the books on lingering or outstanding investigations, complaints, or lawsuits. For example, in his memo, Mulvaney specifically warned against the negative economic impacts of multi-year Civil Investigative Demands.
Many investigations have gone on for years. The companies being investigated have invested tens of millions of dollars, sometimes hundreds of millions, in compliance and risk infrastructure. They have invested in innovative technologies to help more consumers. These companies should not sit endlessly in the CFPB penalty box after having improved standards since the financial crisis. These were never intended to be open-ended investigations. Mulvaney should conclude these cases, assess fines or other penalties where appropriate, and let them move on.
Mulvaney will no doubt have sufficient time to give these cases their due diligence. Democrats in the Senate have already pledged to obstruct Kraninger’s nomination.
The financial crisis of 2008 was a jarring wake-up call that an economy without appropriate policing is often in danger of imploding on itself, with regular Americans playing the role of innocent victims. It’s good that consumers now have an advocate. But the “Push the Envelope” era needs to come to an official end. With new, permanent leadership coming into the CFPB, now seems like as appropriate a time as any.
Matt Cordio is co-founder and president of Skills Pipeline, a technology talent solutions company.