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Blog Post | July 11, 2023

Trump’s CFPB Saboteurs Tell The Supreme Court To Finish The Job

Consumer ProtectionFinancial RegulationIndependent AgenciesJudiciaryRevolving DoorSupreme Court
Trump’s CFPB Saboteurs Tell The Supreme Court To Finish The Job

Just days after insurrection mastermind John Eastman endorsed the payday lender lawsuit to gut the Consumer Financial Protection Bureau (CFPB), another top Trump enabler has joined the business lobby’s attack on the Bureau. 

Longtime CFPB opponent Mick Mulvaney, who was appointed by Trump to destroy the agency from the inside, has authored a new amicus brief with his disgraced former subordinate Eric Blankenstein urging the Supreme Court to strike down the CFPB’s funding structure in the upcoming CFSA v. CFPB case. The Community Financial Services Association (CFSA), a plaintiff in the case, is a former Mulvaney campaign donor. Mulvaney selling out in this manner is thoroughly unsurprising: he was a top recipient of payday lending cash while in Congress and once told a conference of banking industry executives that he would only meet with lobbyists if they had given to his campaign. 

To many, Mulvaney is best known for his corrupt actions as White House Chief of Staff during Trump’s first impeachment. In late 2019, Mulvaney put a temporary hold on aid to Ukraine at Trump’s request and accidentally admitted that Trump engaged in a quid pro quo to link Ukraine aid to a politically-motivated investigation of the Biden family. For muddling Trump’s impeachment defense, Mulvaney was ousted from his job in March 2020 and named Special Envoy for Northern Ireland. He abruptly resigned from that post to save face on January 7th, 2021 – 24 hours after the deadly storming of the Capitol by Trump’s followers.

What is more worth remembering in light of Mulvaney’s new amicus is his long history of doing the bidding of corporate lobbyists and payday lenders – including the ones currently trying to gut the CFPB – at the expense of everyday Americans. Though he was unable to permanently gut the extremely popular CFPB through the democratic legislative process, Mulvaney is now seeking to achieve his dream of killing the Bureau via an out of touch and corrupt judiciary.

As a Congressman from 2011 to 2017, Mulvaney established himself as a proud shill for corporate predators and outspoken enemy of consumers and working families: 

  • Mulvaney received tens of thousands in campaign contributions from Wall Street Banks, payday lenders, and anti-consumer corporate lobbying groups with business before the CFPB, including the American Bankers Association, Credit Union National Association, National Auto Dealers Association, National Association of Realtors, Truist Bank, Bank of America, and the Community Financial Services Association.
  • Congressman Mulvaney once called the CFPB a “sick, sad joke” and co-sponsored legislation to eliminate it entirely. Mulvaney also voted for Republican budgets in 2012, 2013, 2014, and 2015 that would have scrapped the CFPB. 
  • A founding member of the far-right House Freedom Caucus, Mulvaney was one of the first Republicans to embrace the strategy of threatening debt default and government shutdowns in exchange for painful cuts to the social safety net. 

Mulvaney resigned from Congress in 2017 to run Trump’s Office of Management and Budget (OMB), where he proudly described himself as a “right-wing nutjob” and pushed for large cuts to Medicaid and Social Security disability insurance. Trump appointed Mulvaney to serve as acting CFPB Director in November 2017 – a move widely viewed by constitutional law experts as a violation of the Dodd-Frank law. Then-Deputy CFPB Director Leandra English sued over Mulvaney’s legally-dubious claim to the agency, only to have a Trump-appointed judge dismiss her lawsuit and install Mulvaney as Director.

As watchdog Accountable.US put it, Mulvaney ran the CFPB as a “champion of financial predators and enemy of consumers”. Notable moments from his tenure included:

  • Pulling back on a CFPB probe into Equifax’s (another Mulvaney donor) massive consumer data breach. 
  • Slashing penalties for lenders, debt collectors, and banks who violated federal consumer protection laws. 
  • Delaying implementation of the CFPB’s prepaid card and payday lending rules. 
  • Asking the Federal Reserve to defund the CFPB by giving it a $0 budget.
  • Suspending examination of lenders for predatory behavior towards military servicemembers and their families. 
  • Shutting down data collection efforts meant to root out financial industry discrimination and misconduct. 

Since departing the Trump administration, Mulvaney has leveraged his government experience into a lucrative revolving-door career by co-chairing lobbying firm Actum’s D.C. office. Actum’s current clients include influencer Bitboy Crypto (who is currently entangled in a class-action fraud lawsuit related to the collapse of FTX), Chargebacks911 (a purported “chargeback mitigation” company that the FTC has alleged “helped scammers stay in business and defeated chargeback attempts by consumers hit with fraudulent charges”), and Jeff Bezos’ space exploration company Blue Origin. 

Mulvaney’s CFSA v. CFPB amicus brief was filed by right-wing lawyer Eric Blankenstein, the Trump-era head of CFPB’s Supervision, Enforcement, and Fair Lending Division. Blankenstein – who previously defended big banks facing CFPB scrutiny as a corporate lawyer – was one of Mulvaney’s earliest hires at CFPB and earned a hefty $259,500 annual salary in his role. According to the New York Times, Blankenstein played a pivotal role helping Mulvaney grind the CFPB’s litigation against payday lenders to a halt, creating unnecessary new bureaucratic hurdles for the Bureau’s career litigators to jump through. 

In 2018, Blankenstein resigned in disgrace after his old blog posts – in which he claimed that most hate crimes were actually hoaxes – were uncovered by the Washington Post. The CFPB’s inspector general later reported that Blankenstein may have violated agency ethics rules by ordering a subordinate to write a press statement defending him. In typical fashion, the Trump Administration simply shuffled Blankenstein around after his resignation, giving him various roles at HUD. Now a co-author of the Mulvaney amicus brief, Blankenstein has returned to doing what he does best: helping corporate criminals avoid accountability. 

Like the John Eastman brief, the Mulvaney-Blankenstein brief reveals a lot about the plaintiffs’ true motives in the CFSA v. CFPB case. It’s time to stop pretending that the payday lender lawsuit against the CFPB has anything to do with the Constitutional separation of powers. It’s a brazen corporate power-grab by financial predators and their loyal bagmen.

Consumer ProtectionFinancial RegulationIndependent AgenciesJudiciaryRevolving DoorSupreme Court

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