Business

Leader of Watchdog Offers Advice to Defang It

Posted April 24, 2018 9:14 p.m. EDT

WASHINGTON — Mick Mulvaney, interim director of the Consumer Financial Protection Bureau, told banking industry executives and lobbyists on Tuesday that they should increase their campaign donations to influence lawmakers, revealing that he would meet only with lobbyists who contributed to his campaign when he served in the House.

“We had a hierarchy in my office in Congress,” Mulvaney, a former Republican lawmaker from South Carolina, told 1,300 bankers and lobbyists at an American Bankers Association conference in Washington. “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”

Mulvaney, who also runs the White House budget office, is a longtime critic of the Obama-era consumer bureau, including while serving in Congress. He was tapped by President Donald Trump in November to temporarily run the bureau, in part because of his promise to sharply curtail it.

Since then, he has frozen all new investigations and slowed down existing inquiries by requiring employees to produce detailed justifications. He also sharply restricted the bureau’s access to bank data, arguing that its investigations created online security risks. And he has scaled back efforts to go after payday lenders, auto lenders and other financial services companies accused of preying on the vulnerable.

But he wants Congress to go further and has urged it to wrest funding of the independent watchdog from the Federal Reserve, a move that would give lawmakers — and those with access to them — more influence on the bureau’s actions. On Tuesday, he implored the financial services industry to help support the legislative changes he has requested to diminish the bureau’s power by increasing campaign donations.

Mulvaney said that trying to sway legislators that way was one of the “fundamental underpinnings of our representative democracy. And you have to continue to do it.”

“If you came from back home and sat in my lobby, I talked to you without exception, regardless of the financial contributions,” said Mulvaney, who received nearly $63,000 from payday lenders for his congressional campaigns.

Asked about the comments, John Czwartacki, a spokesman for Mulvaney, said: “He was making the point that hearing from people back home is vital to our democratic process and the most important thing our representatives can do. It’s more important than lobbyists and it’s more important than money.”

In his remarks, Mulvaney also announced a series of moves intended to reduce the bureau’s power. The agency was championed by Sen. Elizabeth Warren, D-Mass., and Richard Cordray, who served as the bureau’s director from its inception until last year.

Such moves include cutting public access to the bureau’s database of consumer complaints, which the agency had used to help guide its investigations.

“I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government,” he said.

Mulvaney also said he would begin calling the Consumer Financial Protection Bureau by its official statutory name, the more obscure Bureau of Consumer Financial Protection. Administration officials said the rebranding was an attempt to diminish the agency’s public profile.