27 November 2017
A battle for the soul of the Consumer Financial Protection Bureau (CFPB) played out Monday inside a federal building in Washington. The real estate industry watched with fascination as White House budget chief Mick Mulvaney sought to wrest power from the agency’s acting director.
As a Republican congressman, Mick Mulvaney called the Consumer Financial Protection Bureau a “joke” and said he wished it didn’t exist. On Monday, Mulvaney showed up at the agency’s D.C. offices with a bag of doughnuts and a new title: boss.
Reporting for duty at 1700 G Street with a bag of donuts Monday morning, Mulvaney reportedly sent a missive introducing himself to the banking industry regulator’s 1,600 employees after its acting director Leandra English sent her own office-wide email. Citing separate, conflicting federal statutes over the weekend, Mulvaney and English both claim to be the rightful director of the agency, and English has filed a lawsuit to block the appointment.
“It has come to my attention that Ms. English has reached out to many of you this morning via email in an attempt to exercise certain duties of the Acting Director,” Mulvaney wrote in an email, according to The Washington Post. “This is unfortunate but, in the atmosphere of the day, probably not unexpected. Please disregard any instructions you receive from Ms. English in her presumed capacity as acting director. I apologize for this being the very first thing you hear from me. However, under the circumstances I suppose it is necessary. If you’re at 1700 G Street today, please stop by the fourth floor to say hello and grab a doughnut.”
The power struggle revved up following the Nov. 16 resignation of Richard Cordray, the polarizing Obama administration appointee who drew ire from bankers and real estate professionals alike for his aggressive pursuit of fraud perpetrated by banks, credit unions, securities firms, mortgage servicing operations and foreclosure relief services. In his resignation letter, he named English as his heir apparent, but President Donald Trump countered later with his own nominee, Mulvaney, currently the director of the Office of Management and Budget.
A budget hawk and supporter of financial deregulation, Mulvaney, a Republican, once called the CFPB a “sick, sad joke,” fueling concern that the Trump Administration intends to dismantle the agency, which launched in 2011 as a response to the financial crisis two years earlier. Last week, Trump himself called it a “total disaster” and vowed to “bring it back to life.”
Government watchdogs and real estate industry professionals on Monday chimed in on both sides, describing Mulvaney’s disputed appointment as alternately a boon for the mortgage industry and its real estate industry brethren and a threat to homebuyers and the economy.
“It’s going to be a big win for mortgage services and, in the short-term, for originators, but I think it will be a huge loss for consumers over the long run and probably a loss for investors in the long run,” said Paul Bland, executive director of Public Justice, a nonprofit organization that advocates for economic justice. “If the mortgage originating industry generates a whole bunch of weak mortgages that are going to go down they will have set those up in the stock market by securitizing them, by and large, and so you’re going to see a bunch of short-term risky behavior that generates profits for one segment of the economy and then should there be another downturn down the road there’s going to be a lot of harm to borrowers and investors.”
Elsewhere, those who watched the English and Mulvaney feud with morbid fascination offered their own commentary on Twitter and Facebook. Dan Lavoie, a speechwriter for New York attorney General Eric Schneiderman, and himself no fan of the Trump administration himself no fan of the Trump administration, chimed in with this tweet:
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