A great man once said, “you either die a hero, or live long enough to see yourself become the villain.” That man’s name? Harvey Dent, AKA Two-Face (as portrayed by Aaron Eckhart in The Dark Knight).
No, Dent wasn’t imagining his own eventual, facial disfiguration-induced turn to villainy. He was actually talking about Julius Caesar, who wound up becoming all-powerful emperor of Rome—despite originally championing the society’s compulsory model of democracy, in which every citizen was expected to play a role in government.
Why am I writing about Rome, Julius Caesar, and Two-Face? Because they’re interesting analogs for the Consumer Financial Protection Bureau and its current Director, Mick Mulvaney.
Mulvaney was once a stalwart opponent of the CFPB, fulminating against the Bureau’s lack of accountability, criticizing its former Director Richard Cordray’s pattern of “pushing the envelope” through enforcement, and even co-sponsoring legislation aimed at dismantling the agency. But now, several months into the job, Mulvaney seems to have accepted his largely unchecked authority—and his Bureau is more or less continuing in its predecessor’s footsteps.
These days, the chief difference between Mulvaney and Cordray comes to press release quotes. Really. American Banker reports:
“Earlier this month, the CFPB permanently barred a payday loan debt collector from working in the industry, and fined an Alabama small-dollar lender over excess interest charges. In June, Citibank agreed to give $335 million in refunds to consumers for miscalculating credit card rates and Security Finance, a South Carolina installment lender, was fined $5 million for illegal debt collection practices.
Lawyers say the mix of consent orders is similar to the pattern of cases filed under Cordray, with some large and small companies, including banks and nonbanks. A major difference is that the CFPB’s press releases under Mulvaney tend to be short and do not have the often inflammatory language that companies complained about under Cordray.
‘I think there’s been a lot of rhetoric around [Mulvaney’s] … leadership, but the actual content of the enforcement actions has not changed that much,’ said Allen Denson, a partner at Hudson Cook.”
But wait, wasn’t the CFPB declared unconstitutional? Didn’t Mulvaney himself make that argument at one point? Why would he suddenly start defending the Bureau’s constitutionality by going after lenders?
Here’s where things get very Batman-esque. Some believe that, in true anti-hero fashion, Mulvaney is using his authority to set the CFPB up for a Supreme Court battle. He knows he’s becoming the villain—and is hoping that President Trump’s SCOTUS pick, Brett Kavanaugh, might be the man to take him down:
“In January, the U.S. Court of Appeals for the D.C. Circuit, ruling in [PHH Corp. v CFPB], said having a single-director structure, as opposed to a commission, does not violate the constitution.
The appeals court had overturned an earlier ruling by Judge Brett Kavanaugh, President Trump’s nominee to the Supreme Court, who had ruled that the CFPB is unconstitutional and that the so-called ‘for cause’ provision should be struck down, allowing the president to fire the director at will.
Last month, Chief District Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York ruled that the CFPB is unconstitutional, setting up a potential split; the appeals court in the Fifth Circuit is still deciding on the constitutionality issue.”
If this all strikes you as bizarrely dramatic for regulatory news, you probably haven’t been following the CFPB over the last year or so. To catch up on what you may have missed in the saga thus far, and for more twists and feats of consumer finance heroism, make sure to keep up with our blog.