Sec. 2. Findings; sense of Congress

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The Congress finds the following: The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 ) ( Dodd-Frank ), was signed into law on July 21, 2010, in order to, among other things, advance the goals of protecting consumers from predatory financial services practices and products that led to the 2007–2009 financial crisis. Title X of Dodd-Frank established a new Federal independent watchdog, known as the Consumer Financial Protection Bureau ( Consumer Bureau ), with broad authority to ensure that all hardworking consumers are given clear, accurate information that they need to shop for mortgages, credit cards, and other consumer financial products or services and to protect consumers from hidden fees, abusive terms, and other unfair, deceptive, or abusive acts or practices through strong implementation and enforcement of Federal consumer financial laws.

Before the Consumer Bureau was established, Federal financial regulators were tasked with the dual responsibilities of supervising institutions for safety and soundness and compliance with consumer protections under Federal consumer financial laws. These agencies often prioritized the profitability of their regulated entities over the protection of consumers, even when institutions were found to have engaged in practices detrimental to their own customers’ financial well-being.

Congress purposefully created the independent Consumer Bureau within the Federal Reserve System to address past regulatory gaps in our country’s financial regulatory regime—gaps that resulted in the most severe global financial crisis since the Great Depression. Among other things, Federal financial regulators were too reluctant to exercise their rulemaking, supervisory, and enforcement authorities to protect consumers from the misdeeds of the Consumer Bureau’s regulated entities.

In creating the Consumer Bureau, Congress explicitly laid out in statute the Consumer Bureau’s purpose, five objectives, and six primary functions. Specifically: Section 1021(a) of Dodd-Frank states that the Consumer Bureau, shall seek to implement and, where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive .

Section 1021(b) of Dodd-Frank authorizes the Consumer Bureau, to exercise its authorities under Federal consumer financial law for the purposes of ensuring that, with respect to consumer financial products and services—(1) consumers are provided with timely and understandable information to make responsible decisions about financial transactions;

(2)consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination;

(3)outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens;

(4)Federal consumer financial law is enforced consistently, without regard to the status of a person as a depository institution, in order to promote fair competition; and

(5)markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation. . Section 1021(c) of Dodd-Frank establishes the primary functions of the Consumer Bureau to be,

(1)conducting financial education programs;

(2)collecting, investigating, and responding to consumer complaints;

(3)collecting, researching, monitoring, and publishing information relevant to the functioning of markets for consumer financial products and services to identify risks to consumers and the proper functioning of such markets;

(4)subject to sections 1024 through 1026, supervising covered persons for compliance with Federal consumer financial law, and taking appropriate enforcement action to address violations of Federal consumer financial law;

(5)issuing rules, orders, and guidance implementing Federal consumer financial law; and

(6)performing such support activities as may be necessary or useful to facilitate the other functions of the Bureau. . In doing so, Congress explicitly laid out these consumer-focused purpose, objectives, and primary functions for the Consumer Bureau to ensure that all consumers and all communities are protected. This is of extreme importance to communities of color who have been disproportionately impacted by the inequities of the financial system, resulting in an extreme racial wealth divide. Decades of segregation and discrimination have prevented consumers of colors from amassing wealth equal to their white counterparts, while predatory financial practices of have stripped consumers of color of their nominal existing wealth. For example, over the past 30 years, the average wealth of White families has grown by 84 percent—1.2 times the rate of growth for the Latino population and three times the rate of growth for the Black population. In light of historical practices and current-day disparities in banking and lending practices, the Consumer Bureau plays a key role in protecting communities of color from wealth-stripping financial products and ensuring their right to wealth building opportunities. The agency’s enforcement actions in auto lending, mortgages, and credit cards, and its rulemaking efforts have sought to address the predatory financial products such as payday loans and prepaid cards that are prolific in communities of color. The Consumer Bureau is essential in protecting vulnerable communities from discriminatory financial practices that has both perpetuated and exacerbated the racial wealth gap. Under Dodd-Frank, the Deputy Director of the Consumer Bureau shall serve as the Acting Director in the absence or unavailability of the Director, until the President appoints and the Senate confirms a new Director. Despite the plain letter of the law establishing a succession order to fill a vacancy in the Director’s position and the clear legislative history underscoring the importance of having an independent Federal consumer-focused agency, when the Consumer Bureau Director Richard Cordray resigned in November 2017, President Trump refused to recognize the Deputy Director as the rightful head of the agency and instead installed Mr. Mick Mulvaney, the Director of the White House Office of Management and Budget, to serve as the Consumer Bureau’s Acting Director. This appointment of a White House cabinet official to run the Consumer Bureau raises profound conflict of interest questions and undermines the vital independent nature of the agency. Additionally, the position of Acting Director is, by its nature, intended to be a temporary assignment to maintain the status quo at an agency and to ensure the agency is fulfilling its statutory purpose and mandates, until the President appoints, and the Senate confirms a permanent Director. Nevertheless, during his tenure, Mr. Mulvaney instituted drastic and severe changes to the Consumer Bureau’s daily operations and priorities contrary to the agency’s statutory purpose and mandates. The daily operations of a Federal agency are guided by its official mission contained in its long-term strategic plan. The Consumer Bureau’s mission should embrace both the spirit and plain letter of the law by fully recognizing the agency’s statutory purpose, objectives, and functions. It is troubling that the Consumer Bureau, under Mr. Mulvaney, issued a Strategic Plan for Fiscal Year ( FY ) 2018–FY 2022 that appears to deemphasize the Consumer Bureau’s core mandate under section 1021(a) of Dodd-Frank to, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services , by not referencing the importance of enforcement in its mission. Instead, it emphasizes financial education by stating that the agency’s new mission is, [t]o regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws and to educate and empower consumers to make better informed financial decisions . This is in stark contrast from the Consumer Bureau’s Strategic Plan for FY 2013–FY 2017, which stated that the agency’s mission is helping, consumer finance markets work by making rules more effective, (emphasis added). by consistently and fairly enforcing those rules , and by empowering consumers to take more control over their economic lives Mr. Mulvaney has been praised by the White House for his efforts to undermine the Consumer Bureau, with one anonymous advisor acknowledging in a July 24, 2018, Politico article that, His mission was to blow that up, which he has. He is very well-suited to the chaos. . Mr. Mulvaney’s misguided actions have included, among other things— stopping payments from the Civil Penalty Fund to harmed consumers; trying to reduce the Consumer Bureau’s funding and staffing by initially requesting $0 be transferred from the Federal Reserve Board of Governors to carry out the agency’s work, imposing a freeze on hiring professional career staff, and by arbitrarily directing staff to cut the agency’s budget by 1/5 ; politicizing the work of the Consumer Bureau by making unusual efforts to fill the independent agency with political appointees; reducing the Consumer Bureau’s enforcement work, including taking only six enforcement actions in the first three quarters of 2018 (compared with 54 enforcement actions taken by the agency in 2015, 42 enforcement actions in 2016 and 36 enforcement actions in 2017), and dropping existing lawsuits and investigations into predatory payday lenders; taking steps that would undermine efforts to promote fair lending and combat discriminatory practices, including by hiring, and later refusing to remove, a political appointee with a history of racist written commentary to oversee the Office of Supervision, Enforcement, and Fair Lending, stripping away the enforcement powers of the Office of Fair Lending and Equal Opportunity, seeking to curb the Consumer Bureau’s data collection under the Home Mortgage Disclosure Act, and indicating the Consumer Bureau would reconsider its approach toward enforcing the Equal Credit Opportunity Act; changing the role of the Office of Students and Young Consumers and, according to an August 27, 2018, resignation letter from Seth Frotman, the Consumer Bureau’s former Assistant Director and Student Loan Ombudsman, when new evidence came to light showing that the nation's largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, Bureau leadership suppressed the publication of a report prepared by Bureau staff ; abandoning the accepted and efficient practice of having its examiners review, as part of their routine examinations, creditors’ compliance with the Military Lending Act in order to ensure the detection and assessment of risky activities that could jeopardize vital protections provided to active-duty servicemembers and their families; creating an Office of Cost Benefit Analysis that prioritizes businesses’ expenses over harm caused to consumers, and unduly constrains oversight of the Consumer Bureau’s regulated entities; freezing data collection to the detriment of supervision and enforcement; seeking to block the publication of the nature of consumers’ complaints and how entities resolved them in the publicly available and transparent Consumer Complaint Database; restricting key input and feedback from a wide range of external stakeholders by effectively terminating members’ positions on three advisory boards, including the statutorily mandated Consumer Advisory Board; proposing policies, including those regarding no-action letters, model disclosure pilot projects, and product sandboxes, that could put many kinds of financial institutions in an enforcement-free zone, letting bad actors that harm consumers off the hook entirely from enforcement, and allowing them to ignore the law; and neglecting to impose promptly any civil money penalty on a bank when it was found to be, among other things, improperly obtaining consumer reports and furnishing to consumer reporting agencies inaccurate information about consumers’ credit. The repeated efforts under Mr. Mulvaney’s leadership to hamstring the good work, passion, commitment, and the capacity of dedicated professional, career Consumer Bureau staff to fulfill the agency’s statutory mission has likely contributed to low employee morale. According to a government-wide annual survey published in December 2018 that was conducted by the nonprofit, nonpartisan Partnership for Public Service, the Consumer Bureau experienced the largest decline in employee morale for a government agency of its size. A workplace with low morale undermines, among other things, the agency’s ability to hold bad actors accountable when they harm consumers, and if unaddressed, will distort the functioning of fair and competitive consumer marketplaces. Despite the fact that the agency has been referred to as the Consumer Financial Protection Bureau since it was created in 2010, Mr. Mulvaney opted to change the agency’s well-known name. Although this decision is supposedly intended to ensure that the agency is in compliance with Dodd-Frank, when this change is viewed in conjunction with the other detrimental actions to undermine the effectiveness of the agency, it can only be interpreted as an attempt to reduce the public’s awareness of, and significant support for, the agency’s role as the top Federal consumer cop as well as to obscure the public’s ability to easily identify the appropriate Federal agency to contact when faced with predatory behavior by financial actors. As such, while some may view this particular decision as minor, the action served as an important symbolic and literal maneuver by the Trump Administration, through its appointment of Mr. Mulvaney, to diminish and undermine the consumer-focused mission of the Consumer Bureau. Director Kathy Kraninger, who was duly nominated by the President and confirmed by the Senate, announced plans in an email to staff on December 19, 2018, to reverse course and return to utilizing the agency’s well-known name. However, questions remain regarding how this change will be implemented and to what extent the agency may continue to utilize Mr. Mulvaney’s preferred name in certain circumstances. During Mr. Mulvaney’s more than 12-month tenure running the agency, he only appeared once before the House Financial Services Committee to discuss his activities at the Consumer Bureau. This is despite the fact that the law requires, at a minimum, the Director’s testimony before the Committee semi-annually. This weak congressional oversight under the direction of the previous Republican Majority pales in comparison to their oversight of the Consumer Bureau during former Director Richard Cordray’s tenure. During Director Cordray’s tenure, he and other senior Consumer Bureau officials testified before Congress more than 60 times; the agency was compelled to produce more than 200,000 pages of documents in response to over 90 letters of inquiry; more than 20 subpoenas were sent to the Consumer Bureau; and several of the Consumer Bureau’s former and current employees were compelled to sit for depositions over 21 days, that lasted 136 hours, and produced 3,194 pages of transcripts. Dodd-Frank gives the Director of the Consumer Bureau broad administrative and executive powers to, among other things: fix the number of, and appoint and direct, all employees of the agency; direct the establishment and maintenance of divisions or other offices within the agency; determine the character of, and the necessity for, the obligations and expenditure of funds; and the use and expenditure of funds. These powers, however, are required to be exercised in a manner consistent with carrying out the responsibilities under Title X of Dodd-Frank, which includes complying with the enumerated Federal consumer financial laws under the Title, and satisfying the obligations in other applicable laws. Mr. Mulvaney’s destructive actions have demonstrated the need for legislation to reorient the Director’s discretionary authority to ensure the maintenance of all statutorily mandated policies, functions, and offices of the Consumer Bureau regardless of who is leading the agency. The following is the sense of Congress: The Consumer Financial Protection Bureau should meet its statutory purpose in a transparent and accountable manner by operating in a way that is consistent with both the spirit and plain letter of the law. This includes the agency fully carrying out the agency’s statutory purpose, objectives, and functions, and the agency being transparent, timely, and responsive to all requests from Congress. Dodd-Frank underscores that the agency is designed to serve as an independent Federal agency that is primarily focused on the protection of all consumers, without any undue influence of partisan whims and special industry interests, in carrying out its responsibilities and duties. The official name of the agency should be consistent with this mandate, and the agency should, figuratively and literally, put Consumers first by using its better-known name as the Consumer Financial Protection Bureau . Thus, any remaining utilization by the agency of the name, Bureau of Consumer Financial Protection , or the acronym BCFP , should cease in all forms. The statute establishing the Consumer Bureau has been grossly misinterpreted under Mr. Mulvaney’s leadership, in a manner that is inconsistent with the agency’s statutory purpose, objectives, and functions. One example of this was Mr. Mulvaney’s inane suggestion that the statutory requirement for the Director to appear before relevant Congressional Committees to discuss its semi-annual reports could be interpreted as requiring the Director merely to attend a hearing and not answer questions, despite the well-established interpretation of a similar statutory requirement for the Chair of the Federal Reserve Board of Governors to appear before the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee on a semi-annual basis about the monetary policy report, as required by the Humphrey-Hawkins Full Employment Act. In the face of such blatant and disrespectful attempts to warp the authorizing and oversight role of the first branch of the Federal Government—the United States Congress—by the Trump Administration, Congress must, in this instance, now refine the Consumer Bureau’s authority to ensure that the vital role that the Consumer Bureau should be playing within the country’s financial regulatory regime is not effectively destroyed by the agency’s current leadership. The Consumer Bureau, now under a new Director, should promptly reverse all anti-consumer actions taken during Mr. Mulvaney’s tenure, including the actions identified by this legislation, to ensure that the agency is fully complying with its statutory purpose, objectives, and functions to protect all consumers, including communities of color and vulnerable populations. One important action is for the Consumer Bureau to resume robust fair lending enforcement to ensure that every consumer has fair and equal access to affordable financial products and services. Another demonstration of this would be for the Consumer Bureau to immediately resume supervision of its regulated entities for compliance with the Military Lending Act to ensure for the most robust and efficient protection of active-duty servicemembers and their families. Other examples include the Consumer Bureau significantly revising its strategic plan to align it with its statutory purpose, objectives and functions, and for the agency to immediately resume coordinating closely with other Federal agencies, such as the Department of Education and the Department of Defense, and State regulators, as is required by section 1015 of Dodd-Frank to, promote consistent regulatory treatment of consumer financial and investment products and services. While the legislation is a direct response to address many of the misguided decisions that have been orchestrated under Mr. Mulvaney’s leadership at the Consumer Bureau that have been exposed to the public, as of the date of the bill’s introduction, and sharply criticized by numerous Federal and State officials, including law enforcement, as well as organizations representing servicemembers, senior citizens, and other vulnerable consumer populations, this legislation should not be viewed as an exhaustive list to fix all the damaging actions that may have occurred at this agency since the departure of former Director Cordray in November 2017, particularly since detailed information revealing the full scope, nature, and extent of the current flawed operation of the agency, and the adverse impact resulting from these actions, may not yet be publicly available. Rather, this legislation should be interpreted as an attempt to highlight and resolve a small sample of the publicly known egregious statements, decisions, and actions that have occurred since November 2017.

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Pub. L. 111-203

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Sec. 2

Findings; sense of Congress

Pub. L.Pub. L. 111-203

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