[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
HEARING ON THE 2018 SEMI-ANNUAL
REPORT OF THE BUREAU OF CONSUMER
FINANCIAL PROTECTION
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 11, 2018
__________
Printed for the use of the Committee on Financial Services
Serial No. 115-83
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__________
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31-417 PDF WASHINGTON : 2018
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HOUSE COMMITTEE ON FINANCIAL SERVICES
JEB HENSARLING, Texas, Chairman
PATRICK T. McHENRY, North Carolina, MAXINE WATERS, California, Ranking
Vice Chairman Member
PETER T. KING, New York CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California
STEVAN PEARCE, New Mexico GREGORY W. MEEKS, New York
BILL POSEY, Florida MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin DAVID SCOTT, Georgia
STEVE STIVERS, Ohio AL GREEN, Texas
RANDY HULTGREN, Illinois EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina KEITH ELLISON, Minnesota
ANN WAGNER, Missouri ED PERLMUTTER, Colorado
ANDY BARR, Kentucky JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania BILL FOSTER, Illinois
LUKE MESSER, Indiana DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine JOYCE BEATTY, Ohio
MIA LOVE, Utah DENNY HECK, Washington
FRENCH HILL, Arkansas JUAN VARGAS, California
TOM EMMER, Minnesota JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana
Shannon McGahn, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
April 11, 2018............................................... 1
Appendix:
April 11, 2018............................................... 79
WITNESSES
Wednesday, April 11, 2018
Mulvaney, Hon. Mick, Acting Director, Bureau of Consumer
Financial Protection........................................... 5
APPENDIX
Prepared statements:
Mulvaney, Hon. Mick.......................................... 80
Additional Material Submitted for the Record
Waters, Hon. Maxine:
Article entitled, ``Consumers Union calls for nomination of
permanent CFPB director dedicated to protecting consumers
from financial abuses''.................................... 144
Written statement for the record from U.S. PIRG.............. 146
Wagner, Hon. Ann:
Supplemental production of documents and briefing book from
the Bureau of Consumer Financial Protection (CFPB)......... 153
Mulvaney, Hon. Mick:
Written responses to questions for the record submitted by
Representatives Waters, Budd, Huizenga, Hultgren,
Pittenger, and Sinema...................................... 253
HEARING ON THE 2018 SEMI-ANNUAL
REPORT OF THE BUREAU OF
CONSUMER FINANCIAL PROTECTION
----------
Wednesday, April 11, 2018
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:05 a.m. in
room 2128 Rayburn House Office Building, Hon. Jeb Hensarling
[chairman of the committee] presiding.
Present: Representatives Hensarling, Royce, Pearce, Posey,
Luetkemeyer, Huizenga, Duffy, Stivers, Hultgren, Pittenger,
Wagner, Barr, Rothfus, Tipton, Williams, Poliquin, Love, Hill,
Emmer, Zeldin, Trott, Loudermilk, Mooney, MacArthur, Davidson,
Budd, Kustoff, Tenney, Waters, Maloney, Velazquez, Sherman,
Meeks, Capuano, Clay, Lynch, Scott, Green, Cleaver, Ellison,
Foster, Kildee, Delaney, Sinema, Beatty, Heck, Vargas,
Gottheimer, Gonzalez, Crist, and Kihuen.
Chairman Hensarling. The committee will come to order.
Without objection, the Chair is authorized to declare a recess
of the committee at any time.
And all Members will have 5 legislation days within which
to submit extraneous materials to the Chair for inclusion in
the record.
This hearing is for the purpose of receiving the semi-
annual report of the Bureau of Consumer Financial Protection.
Walking in through the hallway I have never seen such a
crowded hallway. Rarely have I seen so much excitement. So just
in case you thought Mr. Zuckerberg was appearing in this
hearing room, he will be across the hallway.
Having said that, I now recognize myself for 3 minutes to
give an opening statement.
This morning we welcome home Mick Mulvaney, a highly
respected former Member of this very committee, the director of
the OMB, and the acting director of the Bureau of Consumer
Financial Protection. He is here to deliver the Bureau's latest
semi-annual report to Congress.
When Richard Cordray was director of CFPB I maintained it
was perhaps the single most powerful and unaccountable agency
in the history of the republic. Now that Mick Mulvaney is
acting director, I still maintain that the CFPB is the most
powerful and unaccountable agency in the history of the
republic.
Democrats chose to insulate it from Congress, the
President, courts, voters, and the democratic process. The CFPB
is unaccountable to the President, because the director can
only be removed for cause. The CFPB is unaccountable to
Congress because it determines its own funding stream. The CFPB
is unaccountable to the courts because it benefits from the
Chevron doctrine. The CFPB is unaccountable to, well, the CFPB,
because there is really not even a ``them.'' In this case,
there just happens to be a ``him.'' No commission, no board, no
effective oversight.
So powerful is the CFPB director that he alone has been
granted the unprecedented power to declare any mortgage, credit
card, or bank account unfair or abusive, at which point
Americans can't have them if they need them, want them, and can
afford them. The fact that the CFPB director has such power is
itself unfair and abusive, and is an affront to the personal
freedom of every American citizen.
While the Bureau retains all of these unbridled powers and
remains unaccountable under Acting Director Mulvaney, there is
one distinction: Director Cordray often acted unlawfully;
Acting Director Mulvaney acts lawfully. What a welcome change.
For example, in the PHH case, the facts show that Mr.
Cordray unilaterally reversed decades of accepted law with
regards to RESPA (Real Estate Settlement Procedures Act), and
did so without formal rulemaking. No comment, no due process,
no notice.
Then, to make matters worse, Mr. Cordray attempted to apply
these new--this new rogue standard retroactively. Fortunately,
these actions were held unlawful by the D.C. Court of Appeals.
And that is just one example.
We also know that, in many respects, consumers have been
harmed by the CFPB. One example, according to researchers at
the University of Maryland, the CFPB's Qualified Mortgage (QM)
rule harmed middle-income borrowers who not only--quote--didn't
obtain cheaper mortgages, but were cut out of the mortgage
market altogether.
But I must admit it is sheer irony and great comic relief
to see the wailing and gnashing of teeth of many of my
Democratic colleagues who now denounce the unaccountable nature
of the CFPB, but only because now a Republican is in control. I
ask: Where have you been?
The good news is we have an acting director before us today
who is actually asking our assistance in reforming the CFPB.
And if our Democrat colleagues wish for the Bureau to be
accountable and responsive, please work with us to ensure we do
just that.
Chairman Hensarling. I now yield to the Ranking Member for
her opening statement.
Ms. Waters. Thank you very much, Mr. Chairman. If I may, I
would like to say at the outset that Mr. Mulvaney is not the
acting director of the Consumer Financial Protection Bureau. He
was illegally appointed by President Trump in a move that
blatantly contradicts the Dodd-Frank statute, which is very
clear that the deputy director of the agency shall serve as
acting director in the case of absence or unavailability of the
director.
So I want to be very clear that Democrats' participation in
this hearing is not in any way an acknowledgment of Mr.
Mulvaney's legitimacy at the Consumer Bureau. Nevertheless,
given the many impactful and, indeed, harmful decisions Mr.
Mulvaney is making with regard to the Consumer Bureau, it is
necessary for us to engage with him in an oversight capacity
here today, while the courts decide who should actually be in
charge. I am very concerned about Mr. Mulvaney's actions, and
have serious questions that he must address in his testimony.
Mr. Mulvaney's very presence at the Consumer Bureau
compromises the critical independence of the agency, which was
specifically designed by Congress to be an independent watchdog
for America's consumers. As director of the White House Office
of Management and Budget, Mr. Mulvaney serves at the pleasure
of and reports to the President, which means that this
President holds an inappropriate level of influence over the
operations and activities of the Consumer Bureau and our system
of banking regulations.
It is very clear that Mr. Mulvaney is indeed carrying out
this President's agenda at the Consumer Bureau. He has taken a
series of actions that weaken the agency's ability to carry out
its important mission and benefit the predatory actors that the
agency is designed to police.
For example, he has stripped the Consumer Bureau's Office
of Fair Lending of its enforcement and supervisory powers,
which has the effect of undermining the Consumer Bureau's
ability to enforce fair lending laws.
Mr. Mulvaney has also demonstrated a pattern of working to
help out payday lenders. He has stopped the implementation of
the Consumer Bureau's Sensible Payday Rule. He withdrew a
lawsuit that the Consumer Bureau had initiated against a group
of payday lenders who had allegedly deceived consumers about
the cost of loans which had interest rates as high as 950
percent a year. And he has also ceased an investigation into a
high-cost installment lender called World Acceptance
Corporation, which reportedly has--was engaging in abusive
practices.
His actions have signaled that the Consumer Bureau is a
safe haven for payday lenders, so much so that the former CEO
of World Acceptance Corporation actually sent him her resume,
asking if she could be the next director of the Consumer
Bureau.
Enforcement actions have also ground to a halt, with zero
actions between the time when Mulvaney first walked through the
doors of the Consumer Bureau and today.
Mr. Chairman, Democrats will not allow the Consumer
Bureau's statutorily mandated mission to be undermined. It is a
critically important agency that must be allowed to continue
its work protecting American consumers from unfair, deceptive,
or abusive practices.
Ms. Waters. I thank you and I yield back the balance of my
time.
Chairman Hensarling. The Chair now recognizes the gentleman
from Missouri, Mr. Luetkemeyer, the Chairman of the Financial
Institutions and Consumer Credit Subcommittee for 2 minutes.
Mr. Luetkemeyer. Thank you, Mr. Chairman. Mr. Mulvaney,
welcome back to the committee. We appreciate your willingness
to be with us this morning.
While the Bureau of Consumer Financial Protection has a
well-intended mission, in practice it has been an
unaccountable, unconstitutional, politically driven agency. For
many years you have heard our concerns surrounding the Bureau.
Now that you have had the opportunity to observe this agency
from multiple vantage points, I have no doubt that the insights
you will offer today will be both valuable and compelling.
The mountain of rules coming out of the Bureau under your
predecessor crippled financial institutions seeking to serve
their communities. The uncertainty surrounding these--those
rules, paired with the apparent desire to regulate through
enforcement, has had a chilling effect on financial services
companies across the Nation.
As you know, Mr. Mulvaney, the chilling effects don't stop
at banks and credit unions, because ultimately they punish the
consumers who are charged--who you are charged with protecting.
Under your leadership the BCF has taken steps to not just
talk the talk, but to walk the walk, and to ensure consumer
protection without assaulting financial independence. In your
brief tenure you have underscored the need for increased
transparency and oversight of the Bureau. You have called for
an end to the absolute power you possess as acting BCF
Director, which, in your words, would frighten most of us. You
have allowed for greater public input into rules, and you
called for an end to what I believe is essentially unlawful
legislating by Bureau staff.
Mr. Mulvaney, you are, thankfully, both a terrible
bureaucrat, but a great leader: A most welcome change.
American consumers deserve strong protections, while also
being afforded the opportunity to control their own financial
decisions and futures. Under your leadership, I believe the
Bureau of Consumer Financial Protection is well on its way to
finally living up to its name.
We all thank you for your steps that the--all the steps
that you have taken thus far, and we look forward to your
testimony.
Mr. Luetkemeyer. With that, Mr. Chairman, I yield back.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentleman from Michigan, Mr. Kildee, the
Vice Ranking Member, for 1 minute.
Mr. Kildee. Thank you, Mr. Chairman, and thank you, Madam
Ranking Member. And Mr. Mulvaney, welcome back. I am sure you
have missed the committee desperately.
You and I had differences when we were here. We maintained
a good relationship. We still have differences, and that is
part of what we will explore at this committee.
A concern that I have is that the Bureau's original mission
was to protect the American consumer. Previously, under
Director Cordray, $12 billion was returned to consumers; 30
million Americans recovered damages for deceptive, predatory,
or abusive practices by banks, student loan providers, payday
lenders. But, as was pointed out, since the director, Director
Cordray, left, the Bureau has not taken any significant
enforcement actions.
The Bureau has instead delayed implementation of important
protections like the payday rule and, even more concerning, has
taken steps to remove the independence of the Bureau. And that
is the point that I think is most important.
The Bureau's independence makes it an important entity.
That independence actually means that it stands up for the
American consumer. An administration that believes that a
person who is--already has a full-time job--and I imagine the
director of OMB is one that takes a lot of your time--can also
be the principal defender of American consumers does not take
that job or that role seriously enough.
With that, I echo Member Waters' concern about whether or
not you actually hold this position. And while the--
Chairman Hensarling. The time of the gentleman has expired.
The Chair has been very generous on your--
Mr. Kildee. You have been.
Chairman Hensarling. --60-second opening statement.
Mr. Kildee. All right. I think you get my point.
Chairman Hensarling. Today we welcome the testimony of the
Honorable Mick Mulvaney to present the semi-annual report of
the Bureau of Consumer Financial Protection, as required by
Title X of the Dodd-Frank Act.
Director Mulvaney is, obviously, no stranger to us, as he
was our colleague before President Trump nominated him to serve
as director of the Office of Management and Budget. He is also
the current acting director of the Bureau of Consumer Financial
Protection, a post he was appointed to on November 24th of
2017. Prior to his time in the Administration, he served the
people of the 5th District of South Carolina as their Member of
Congress from 2010, and was the first Republican Member to hold
that seat in 128 years.
A lifelong Carolinas resident, he received his bachelor's
degree from Georgetown University and his juris doctor from the
University of North Carolina at Chapel Hill.
Without objection, the witness's written statement will be
made part of the record.
Director Mulvaney, welcome home. You are now recognized to
give an oral presentation of your testimony.
STATEMENT OF HON. MICK MULVANEY
Mr. Mulvaney. Thank you, Mr. Chairman. Thank you for having
me. Ranking Member Waters, it is good to see everybody. For the
new faces, it is a pleasure to be here before you to talk about
our semi-annual report of the Bureau of Consumer Financial
Protection. I hope y'all have it. You should have access to
that.
I also have a written statement. My experience being on the
committee, though, that having people sit here and read their
written statements is a complete waste of time, so I am not
going to do it.
I will talk a little bit about why I am here today. I want
to be here today to answer questions. I am excited to be here
today to answer questions. I think it is important that we
bring some transparency and accountability to this Bureau, to
the Bureau of Consumer Financial Protection.
The Bureau is not designed structurally to be accountable.
By its very DNA, by its very nature, it is not accountable to
you, it is not accountable to the public, it is not accountable
to anybody, other than itself. And I hope today we get a chance
to explore how to fix those things, and why those things are
not beneficial, that independence--to Mr. Kildee's point--does
not necessarily or not have to, mean unaccountable to everyone.
I will give you just one example, and I hope we get a
chance to talk about more during the course of the day. I have
to be here. The statute requires me to be here, and I am happy
to be here. I do not have to answer a single one of your
questions. I will, and I look forward to doing that. But I
don't have to.
The statute says that I shall appear before Congress, and I
am doing that today and doing it tomorrow in the Senate. Again,
happy to do it. Doesn't say a word about answering your
questions, doesn't say a word about testifying, which is
interesting, because elsewhere in Dodd-Frank other people do
have to appear and testify, or appear and answer questions. For
some reason, the director of the Bureau does not. The director
of the Bureau only has to appear.
So I believe it would be my statutory right to simply sit
here and twiddle my thumbs for the next 4 hours, while y'all
ask questions. I think that is wrong. And again, I am not going
to do it. But I use that as just one of many examples of what
is broken in the way this statute is written.
And I hope that, as a result of the opportunity we have
here today to answer questions--and I want to answer as many as
I possibly can, recognizing that some of them maybe I don't
know, and I will have to get back to you--and that goes to
folks on both sides of the aisle--but I want to answer as many
as I can. But I hope that it is all aimed toward one end goal
of trying to figure out a way to work together to make this
more accountable.
I got a letter from Elizabeth Warren. She was not really
happy. Senator Warren was not happy with some of the answers
she got back from me and some inquiries she made to the Bureau.
I reminded her that sounded a lot like some of the frustrations
that this side of the aisle had when Mr. Cordray sat here for
the last 4 or 5 years.
And I suggested to her that maybe it wasn't the nature of
the person sitting in the chair that was causing that
frustration, it was the nature of the underlying statute that
was causing that frustration, and that both sides might be well
served by fixing the statute and bringing some transparency in
here so that we do have to answer your questions, and that
while you may disagree with a policy, as Mr. Kildee and I have
done in the past, and will continue to do, we won't disagree
about the fact that if I am going to sit here and spend $700
million of y'all's money and the taxpayers' money every single
year, at least maybe I should have to answer some questions
about how and why I am doing that.
So I hope that is--that is the reason I am here, I hope it
is the reason that y'all are here, and I look forward to
answering as many questions as I can. I am here until y'all get
tired of asking me questions.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Mulvaney can be found on
page 80 of the Appendix.]
Chairman Hensarling. The Chair now yields himself 5 minutes
for questions.
Before I get to the questions, Mr. Mulvaney, I do wish to
compliment you because, contrary to your predecessor, you
turned in your testimony oon time. So you are the first CFPB
director--
Mr. Mulvaney. I hired some really good staffers.
Chairman Hensarling. --to do that.
Mr. Mulvaney. They have a good background in this. But
anyway, that is--
Chairman Hensarling. I want to explore a little bit more--
as you know, since we have worked together for many years, I
have a number of concerns about CFPB. I am concerned about to
what extent they do indeed protect consumers, because part of
consumer protections is to protect their rights to a
competitive, transparent market.
But I am also concerned about, have we simply eviscerated
traditional foundational principles of checks and balances and
due process.
So you just told us that, under the Dodd-Frank Act, if you
so chose, you could sit here, put your feet up on the desk,
and, I suppose, take out your iPhone and play Candy Crush for
the next 4 hours, and there would be nothing we could do about
it.
I also understand, I believe--and I mentioned it in my
opening statement--that depending upon what side of the bed you
wake up on, you could determine--you alone, in your solitary
capacity, could declare any credit card in the Nation abusive
and functionally outlaw it. Is that correct?
Mr. Mulvaney. I believe that to be the case. Yes, sir.
Chairman Hensarling. OK. I believe also, particularly--let
me see if I can get the citation in front of me--under section
1022(b)(3) of Dodd-Frank, you have the power to--quote--
unconditionally exempt any class of covered persons from any
provision of this title, or from any rule issued under this
title, as the Bureau deems necessary or appropriate.
My reading of this part of Dodd-Frank, then, tells me, if
you so chose, could you exempt all community banks--scratch
that. Could you exempt all banks located in, say, Dallas, Texas
from the jurisdiction of CFPB enforcement?
Mr. Mulvaney. If we wrote the rules such that that was a
class, a properly identified class, absolutely.
Chairman Hensarling. Well, what is a class?
Mr. Mulvaney. That is a great question.
Chairman Hensarling. So you, on your own recognizance,
could essentially--you could, I suppose, exempt all banks that
started with a C?
Mr. Mulvaney. Yes, sir.
Chairman Hensarling. This doesn't seem to be wise. Again,
it seems to be totally devoid of checks and balances.
Let's talk a little bit about the budget. So there is a
ceiling, I suppose, on how much you can ask for. But you--who
determines the budget of the CFPB?
Mr. Mulvaney. I do.
Chairman Hensarling. You do? So how do you get your money,
Mr. Mulvaney? How do you get your appropriation?
Mr. Mulvaney. I send a letter to the Federal Reserve Board
and they send me a check.
Chairman Hensarling. Do they review your request?
Mr. Mulvaney. No, I have--I don't think so. They have never
asked the CFPB to justify any spending. We send over a letter
that says, ``Please send us''--I think the letter I just sent
last week was $98.5 million--
Chairman Hensarling. So the Fed is your personal ATM.
Mr. Mulvaney. Up to the limits prescribed by the statute,
which is about $700 million.
Chairman Hensarling. So I assume that you have to pay
payroll. But after--and payroll is roughly half of your current
budget?
Mr. Mulvaney. About 60 percent. Yes, sir.
Chairman Hensarling. Sixty percent. So the other 40
percent, which is still--what is that, a few hundred million
dollars?
Mr. Mulvaney. Oh, about $280 million-ish.
Chairman Hensarling. OK, so there is $280 million that you
alone get to decide how it is spent. Is that correct?
Mr. Mulvaney. Yes, sir.
Chairman Hensarling. The naming rights at Texas Stadium for
the Dallas Cowboys, AT&T pays roughly--I think it was close to
$20 million a year for those naming rights. If you wished to
advertise the Bureau, could you take this money and outbid AT&T
and have the naming rights at Texas Stadium?
Mr. Mulvaney. Oh, absolutely. In fact, I think we spent at
least $40 million on advertising up to this point, anyway. So
sure, we could do that.
Chairman Hensarling. Could you take that $250 million and
ensure that every man, woman, and child in America has a CFPB
tee shirt, ball cap, and koozie?
Mr. Mulvaney. Yes. In fact, I think, under previous
leadership, we paid to put advertising in every single tax
return.
Chairman Hensarling. Well, this is borderline insane is
what it is, Mr. Mulvaney, borderline insane.
Let me ask you this. So you once in one quarter asked for
zero dollars of funding, correct?
Mr. Mulvaney. I did. Yes, sir.
Chairman Hensarling. And that was in the second quarter of
2018. You have now since asked for $98.5 million in the third
quarter of 2018, is that correct?
Mr. Mulvaney. Yes, sir.
Chairman Hensarling. If you chose--if you chose, going
forward, to ask for zero dollars, isn't it true that the other
prudential regulators--say the Fed, the OCC (Office of
Comptroller of the Currency), the FDIC (Federal Deposit
Insurance Corporation)--do have secondary concurrent
jurisdiction to enforce all Federal consumer protection laws?
Mr. Mulvaney. In most places, I think there is one
exception on abusive, and there are some exceptions, I think--
Chairman Hensarling. So with the exception of the extra A
in UDAP, is the answer yes to the question?
Mr. Mulvaney. I think there is one other place, Mr.
Chairman, when it comes to rulemaking under fair debt
collection--
Chairman Hensarling. So if the CFPB had zero funding,
consumers are still protected also by State attorneys general,
is that correct?
Mr. Mulvaney. Yes, sir.
Chairman Hensarling. OK. Well, I have exceeded my own time.
I will attempt to set a good example. I yield back. The Chair
now recognizes the Ranking Member.
Ms. Waters. Thank you very much, Mr. Chairman. Allow me to
repeat for Mr. Mulvaney that you are not and, in my words,
should not be construed to suggest the legitimate, lawful
acting director of the Consumer Financial Protection Bureau. So
I look forward to the D.C. Circuit Court's swift ruling in the
matter. But I will not stand idly by while President Trump's
OMB director destroys the Consumer Bureau when harmed consumers
need help.
Before I raise some particular questions with you, you have
made quite--made it quite known this morning that you don't
have to be here and that you don't have to answer questions. I
don't know why you think that is so extraordinary. The previous
director came here 63 times and not only answered all of our
questions, but was badgered by our Chairman. So we certainly
expect you to be here, and we certainly expect you to answer
our questions.
Mr. Mulvaney, given that the President has wanted to do a
big number on Dodd-Frank for his friends on Wall Street, it
seems clear that his goals are about trying to install you at
the Consumer--what his goals are about trying to install you at
the Consumer Bureau.
Now, do you support the mission of the Consumer Bureau?
Let's review the record. And maybe you could just answer by yes
or no. And I am remembering when you served on this committee
and some of the things that you said.
Did--do you remember having said, ``I don't like the fact
that the CFPB exists. I will be perfectly honest with you.''
Have you changed your mind?
Mr. Mulvaney. I don't remember saying that, Representative
Waters, but that certainly does sound like something I would
have said.
Ms. Waters. You also said, ``It turns out being a joke, and
that is what the CFPB really has been, in a sick and sad kind
of way. Some of us would like to get rid of it.'' Do you
remember saying that?
Mr. Mulvaney. Again, I don't have a specific recollection,
but I have been informed that, yes, I have said that. And I
believe that I did say that.
Ms. Waters. All right. Yes or no, were you an original
cosponsor of H.R. 3118, a bill introduced in the last Congress
by Representative Ratcliffe to fully and completely repeal the
Consumer Bureau?
Mr. Mulvaney. It wouldn't surprise me if I was, but I don't
remember the bill by that number.
Ms. Waters. So what do you think those of us who have the
responsibility for implementing Dodd-Frank and being public
policymakers that we are supposed to be about someone who now
is sitting in a position that they really--happens to be
sitting in illegally, to begin with--why should we think that
you are not there to destroy the Consumer Financial Protection
Bureau?
Mr. Mulvaney. Actually, with respect, Congresswoman, I
would suggest that I am the one responsible for implementing
Dodd-Frank, not you. You are responsible for passing the
legislation and, and then the Executive branch implements it.
I have not burned the place down, despite what you may have
heard about what I was going to do when I got there. I think
that we have 10 fewer people working there now than the day I
took over. That is out of 1,627 people. We continue--
Ms. Waters. Reclaiming my time--
Mr. Mulvaney. --to enforce the law.
Ms. Waters. Let me just say to you that you couldn't
implement a thing unless, first of all, there was legislation
that was passed to deal with what you are doing; and, second,
that we have the responsibility for oversight for your
implementation. So I want you to understand the relationship.
Furthermore, let me just say that the Office of Fair
Lending and Equal Opportunity is something that I am very
concerned about. Mr. Mulvaney, the Consumer Bureau's Office of
Fair Lending and Equal Opportunity has had many successes,
including record court settlements for consumers who were
illegally discriminated against in credit court mortgage and
indirect lending.
You recently made changes to gut the powers and undermine
the role of this critical office. Why have you stopped experts
in supervision and enforcement of our lending discrimination
laws from doing their jobs?
Mr. Mulvaney. We haven't. The Fair Lending Office has a
supervision and enforcement function and an education function.
And, prior to the changes that I made, all of it sat within our
own Supervision and Enforcement. And all we did is split it
into two pieces, so that supervision and enforcement was under
Supervision and Enforcement, and education was actually
elevated, Congresswoman, to the director's office. So we
actually put them in more of a prestigious position in the
office than existed beforehand.
Ms. Waters. A recent investigative news report revealed--
suggested there is pervasive modern-day redlining going on
throughout the country. Is it your view that fair lending and
equal opportunity laws simply aren't a priority or aren't even
important?
Mr. Mulvaney. No, I absolutely think that discrimination is
abhorrent, and we should fight against it. And we do intend to
enforce the laws against discrimination at the Bureau.
Ms. Waters. How will you ensure that lending discrimination
is not a prevalent practice among lenders?
Mr. Mulvaney. The same way it has been done since the
Bureau was created. We do supervision, we do oversight, we do
enforcement, we have folks on the ground. We have, I think, 600
people today doing supervision.
Ms. Waters. I yield back the balance of my time.
Chairman Hensarling. The time of the gentlelady has
expired. The Chair now recognizes the gentleman from Missouri,
Mr. Luetkemeyer, Chairman of our Financial Institutions
Subcommittee.
Mr. Luetkemeyer. Thank you, Mr. Chairman.
Director Mulvaney, thank you again for being here. Director
Cordray seemed to adopt a policy of regulation by enforcement.
The director denied that when I asked him about it during one
appearance before this committee, but the simple truth of the
matter is that taking enforcement actions against a firm when
no rule or guidance has been issued is, in actuality,
regulation by enforcement. In fact, I could give you an example
of the BCF fining an entity based on they were thinking about
proposing a rule.
In your January memo to the staff, you suggest that the
days of regulation by enforcement were coming to an end. You
wrote, ``When it comes to enforcement, we will focus on
quantifiable and unavoidable harm to the consumer.'' Can you
tell us about your goals for enforcement, and how you--and what
do you believe the Bureau's enforcement authorities--how they
should be used?
Mr. Mulvaney. Yes, sir. Regulation by enforcement is done.
We are not doing it any more. I believe very firmly that
financial service providers should be allowed to know what the
law is before they are accused of breaking it.
Mr. Luetkemeyer. Very succinct.
Mr. Mulvaney. I could talk more, if you wanted me to, but--
Mr. Luetkemeyer. How do you--you outlined in the--in your
strategic plan, the goal of ensuring that all consumers have
access to markets for consumer financial products and services.
How do you plan to accomplish this goal?
Mr. Mulvaney. We are going to do, I think--and again, when
I say a better job, I want to make it very clear that I was not
there beforehand. So when you hear me say that we are going to
do things differently, I don't want to automatically imply that
the staff was not doing a good job before I got there. In fact,
my experience has been that nothing could be further from the
truth. I have been very impressed with the quality of the work
that the staff has been asked to do.
The question is what have they been asked to do by their
leadership. And one of the things I have asked the staff to pay
closer attention to, moving forward, is the cost benefit
analysis. I was, quite frankly, surprised, Mr. Luetkemeyer, by
the amount of qualitative cost benefit analysis that was done.
In fact, my background is in numbers, economics, commerce,
finance. I didn't realize you could do qualitative cost benefit
analysis. I thought cost benefit analysis was supposed to be
quantitative.
I have come to accept, I think, that a certain amount of
qualitative analysis is part--can be a valuable part of any
analysis. But we are going to do a better job on quantitative
analysis.
So, to your point, we are going to take a close look at how
consumers would be affected, in terms of services that would
not be available to them, the impact on the markets, the
impacts on availability of credit, the impacts of availability
of capital, and the flow of capital to small businesses and to
individuals. We are going to do more quantitative analysis in
those areas.
Mr. Luetkemeyer. Along that same line, right now there is
discussion with regards to the small-dollar lending rule. And
you have stopped the implementation of it, and I assume that we
are in the process of trying to go back and have some--to re-
comment this and, again, look at the cost benefit of the rule
that was proposed.
My understanding is that when proposed there were
significantly more folks who were supportive of allowing the
small-dollar lending to continue, versus those who wanted to be
very prescriptive and restricted even further. Would you like
to comment on that?
Mr. Mulvaney. And just to clarify, we have not stopped that
rule. That is not the appropriate way you deal with things.
What we have done is, by following the Administrative
Procedures Act (APA), simply given notice of our intent to
revisit the rule, which is exactly what the APA requires.
We have not done any pre-judgment, we have not come to any
pre-determined conclusions. We have simply given notice of our
intention to do so, which is exactly what the APA implies. And
we will go through all of the statutory requirements to do so--
notice and comment, so forth, analysis of all the data.
Is it possible that I may come to different conclusions
than my predecessor did, looking at the same sets of data?
Absolutely. That is the nature of the discretion of the office.
But we have not stopped the rule, we have simply given proper
notice and comment under the APA that we intend to revisit it.
Mr. Luetkemeyer. When you are looking at that rule, are you
going to be looking at the access to credit for small-dollar
needs of consumers as something that would be a priority to see
how you can continue to allow the markets to provide that
opportunity for people who want to take advantage of it?
And then also, the cost benefit of allowing that to happen
in a certain way, or whatever the rules--however they are, is
this--these are two important points, I think.
Mr. Mulvaney. We would be looking at anything that is
relevant to an ordinary rulemaking, and those things are
absolutely part of those--part of that data.
Mr. Luetkemeyer. I know that you made--I was talking with
some folks and there was a situation. I know that the Chairman
talked a minute ago about some of the dollars that you were
using. And you have some economic researchers here that--
something like 40 of them--and they are able to do some self-
directed research for you. And is that very productive?
Mr. Mulvaney. I haven't found the productivity in it yet,
Congressman. We could talk about that maybe a little bit
further in another question. But yes, the self-directed
research that is not aimed toward the mission of the Bureau is
something that has caught my eye.
Mr. Luetkemeyer. Thank you. I will yield back the balance
of my time.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentlelady from New York, Mrs. Maloney,
Ranking Member of our Capital Markets Subcommittee.
Mrs. Maloney. Mr. Mulvaney, welcome. Thank you for being
here. First I want to be clear that, just because I am engaging
with you at this hearing, that it is not an acknowledgment that
you are legally entitled to be the acting director of the
Bureau. I believe Dodd-Frank was clear in this matter, and that
Leandra English is the lawful acting director of the Bureau.
That being said, I have some questions. First of all, how
long have you been at the Bureau?
Mr. Mulvaney. November 24th. So what is that? Five months,
maybe.
Mrs. Maloney. Yes. And under your predecessor, the Bureau
was bringing about four enforcement actions per month to
protect consumers. So let me ask you: How many enforcement
actions has the Bureau initiated since you took over?
Mr. Mulvaney. We have initiated none since I have been
there.
Mrs. Maloney. And so it is zero. The Bureau has brought
absolutely zero enforcement actions in nearly 5 months since
you have been there. And in your testimony you said, ``Our job
is to enforce Federal consumer laws.'' But so far there is no
evidence that you are enforcing any of the laws.
You have also said that you are taking a ``new approach''
at the Bureau. Does your new approach involve bringing any
actual enforcement actions, or are you telling me that every
single financial institution in America has suddenly snapped
into full compliance with every single consumer financial law
since you took over last November? Because that would be the
first time in history that that has happened.
So what is your explanation? There has been no enforcement
law, no law that has been violated, no abuse of consumers in
the last 5 months?
Mr. Mulvaney. Actually, nothing could be further from the
truth, Congresswoman. We have--actively litigating 25 cases,
which includes continuing to litigate things that were filed
before I was there. We have only made one dismissal of lawsuits
since I have been there, and that was without prejudice. We
could talk about that more, if you want to, in another
question.
Mrs. Maloney. OK, that is good. May I ask that you submit
the documents to the committee? Because I would like to read
them.
Mr. Mulvaney. What documents would that be?
Mrs. Maloney. About the actions that you are continuing. If
you are just continuing what was done before you, or have you
initiated any actions under your leadership?
Mr. Mulvaney. A couple different things. Keep in mind we
really put them in three buckets at the Bureau, and I will
handle this very quickly.
There are investigations that are ongoing. There are about
100 of those.
Mrs. Maloney. OK.
Mr. Mulvaney. And those could start and stop at any
particular time, the senior staff--
Mrs. Maloney. My question was what have you initiated, not
what is ongoing.
Mr. Mulvaney. And again--
Mrs. Maloney. What have you initiated under your
leadership?
Mr. Mulvaney. In the ordinary course of business we could
start new investigations every single day there, and I wouldn't
be aware--
Mrs. Maloney. But have you started any?
Mr. Mulvaney. I wouldn't be aware of it, Congresswoman.
Mrs. Maloney. Oh, you--
Mr. Mulvaney. It is done in the field, and it is not
checked on by me--
Mrs. Maloney. Can you look into it and get back to us--
Mr. Mulvaney. Sure.
Mrs. Maloney. --if you have initiated anything--
Mr. Mulvaney. And then there is--
Mrs. Maloney. under your leadership to help consumers.
Mr. Mulvaney. And there is the roughly--
Mrs. Maloney. But under your predecessor I would like to
make clear that the Bureau returned over $12 billion to
American consumers who have been ripped off. And how much money
has the Bureau returned to American consumers who have been
ripped off by any financial institution in America since you
took office?
Mr. Mulvaney. $93 million.
Mrs. Maloney. $93 million?
Mr. Mulvaney. Yes.
Mrs. Maloney. That you have returned to consumers?
Mr. Mulvaney. Yes, ma'am.
Mrs. Maloney. Please--
Mr. Mulvaney. 92.6
Mrs. Maloney. 92.6. Could you get that paperwork to the
Chairman, so that all of us can see it?
Mr. Mulvaney. Sure, and that is a public record.
Mrs. Maloney. Was that of any initiation that you did, or
was that again done by your predecessor?
Mr. Mulvaney. It was a distribution that was approved while
I was on the job.
Mrs. Maloney. But was the project initiated by you to
return this money?
Mr. Mulvaney. The flow of money out of the--
Mrs. Maloney. Let me make clear, and I can make this
question in writing. I want to know how much you returned under
your leadership that you initiated, not the prior one. And we
can get that answer in writing, because I do feel that
basically we have a Bureau that refuses to take any new
actions, refuses to punish anyone for violating any existing
rules, and refuses to provide tangible help to American
consumers, the very people that the Bureau was created to help.
This is not what Congress intended when we created the
Consumer Financial Protection Bureau, and I am deeply
disappointed, deeply disappointed that we have essentially
taken the cop off the beat in terms of initiating new actions
to help consumers, not just following up on your predecessor.
Now, I read in the paper on Monday that Reuters reported
that the Bureau--is my time up--is going after Wells Fargo. And
do I have time to ask the question?
Chairman Hensarling. I am afraid we are already 20 seconds
over, so--
Mrs. Maloney. Well, my apologies.
Chairman Hensarling. --the time of the gentlelady--
Mrs. Maloney. I yield back. I was just warming up and I ran
out of time. All right.
Chairman Hensarling. The time of the gentlelady has
expired.
Mrs. Maloney. I yield back.
Chairman Hensarling. The Chair now recognizes the gentleman
from Michigan, Mr. Huizenga, Chairman of our Capital Markets
Subcommittee.
Mr. Huizenga. I have to tell you, Director Mulvaney, it is
good to have you here. The last director that was here pretty
much stalled, obfuscated, ran out the clock, and filibustered
his entire time. We are actually getting answers, which is
refreshing.
Mr. Mulvaney. Apparently I didn't say enough in response to
Mr. Luetkemeyer; I think I caught him off guard.
Mr. Huizenga. So yes, you--exactly right. We weren't
actually--we were expecting you to try to run out the clock
like the last guy.
But the--I want--I do want to congratulate you on your
staff reduction of 0.0614 percent of your staff. So yes, that
would be a sarcastic note to those that believe that you are
gutting it all.
I do want to give you an opportunity, though, to address a
couple of things that were brought up. How many enforcement
actions were taken under the former Bureau chief, Director
Cordray in his first 6 months?
Mr. Mulvaney. In his first 6 months, zero.
Mr. Huizenga. Zero. OK. And your sense was you came in--I
know, from a Michigan company that I have been in communication
with, that was an ongoing action that has still continued to be
dealt with. You are moving through with what had been in the
pipeline. Is that right?
Mr. Mulvaney. Let me make one thing very clear to
everybody. We are still going after bad actors. In fact, I have
actually taken the extraordinary step of ratifying action in
order to clarify whether or not the constitutional issue has
been handled. I have ratified actions in other litigation that
is ongoing. We are still going after bad actors.
Mr. Huizenga. And I think, as you had indicated, though,
what practice that you are hoping to curb and eliminate is
enforcement, or regulation by enforcement. And I think that is
something we can talk about.
One of my colleagues just said, has everybody snapped into
compliance. There is always--benefit of being a realist here, I
guess, we always know that there are going to be bad actors out
there. What a lot of us had a concern about was that the last
director of the Bureau, frankly, just made up violations. And
these CIDs (Civil Investigative Demands) that would go out
requesting information on activities that were perfectly legal,
but they just didn't like, then they would fine people and try
to curb everyone else's actions through those fines and those
threats. And I would like you to address that.
Mr. Mulvaney. Sure. We will take a specific example of an
action that was brought. There was a financial service provider
doing something that they had believed to be legal because it
had been legal for a long time under guidance that had been
issued by HUD. And, without notice, the CFPB popped them for
what they considered to be violations. I just happen to think
that that is wrong. That is that enforcement by--or regulation
by enforcement that I talk about.
I think you should be allowed to know what the law is
before you are accused of breaking it.
Mr. Huizenga. And then I think there was probably a few
dozen press releases on that afterwards.
Mr. Mulvaney. Again, I don't--I didn't follow a lot of the
press releases under the previous leadership. I wouldn't be
surprised--
Mr. Huizenga. I know that a number--I know that they
certainly were very eager after they would get these consent
decrees to go out and tout those and use those to bludgeon
things, to bludgeon other companies.
I do want to also take a minute here and allow you to talk
about these self-directed researchers in the economics
departments of what you have been dealing with over at the
Bureau.
Mr. Mulvaney. There was a practice there that I was just
made aware of in the last couple of weeks where our economists
are allowed to take up to 50 percent of their time, paid--
Mr. Huizenga. I am sorry, did you just say half of their
time?
Mr. Mulvaney. Up to half of their--
Mr. Huizenga. Half of their taxpayer-sponsored time?
Mr. Mulvaney. Yes sir, to do research, which on its face
probably isn't that objectionable, I guess, until you realize
that there is no requirement that the research be connected to
the actual job that the Bureau does.
Mr. Huizenga. So they could be researching--
Mr. Mulvaney. The last time I saw--
Mr. Huizenga. --climate change?
Mr. Mulvaney. --was a research project on the impact of hub
airports and urban growth that we paid for at the Bureau of
Consumer Financial Protection.
Mr. Huizenga. And that has what, exactly, to do with the
Bureau of Consumer Financial--
Mr. Mulvaney. I am still struggling with that one, myself.
Mr. Huizenga. As would I. So how--are you--do you have the
ability to go in and change that requirement?
Mr. Mulvaney. I--yes and no. We are going to follow the
rules. I operate under a collective bargaining agreement with
the National Treasury Employees Union, so we have rules on how
we would go about changing job descriptions, and so forth, and
we are going to go through the proper processes. But we are
going to look very closely at that practice.
Mr. Huizenga. So logic dictates we could have half the
number of economists, and do the exact same amount of work on
consumer protection. So we might be able to grow that 0.00614
percent up a little bit. If we are going to get the same amount
of research out of half the number of economists, that might be
a step that we might want to take.
Mr. Mulvaney. It is not very efficient.
Mr. Huizenga. No, it is not. So with that, Mr. Chairman, I
yield back.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentlelady from New York, Ms.
Velazquez.
Ms. Velazquez. Thank you, Mr. Chairman.
Mr. Mulvaney, I am very concerned about your dual roles at
OMB and now at the CFPB. I do not understand how you are able
to work and report directly to President Trump part of the time
and then act as an independent director of the Consumer Bureau
charged with protecting working Americans from the deceptive
and predatory business practices.
Mr. Mulvaney, I have a series of questions that I would
like to get a yes-or-no answer. And if you feel you need to
expand on them, will you please submit them in writing?
Mr. Mulvaney. I will do my best.
Ms. Velazquez. Mr. Mulvaney, do you maintain offices at
both the CFPB and OMB?
Mr. Mulvaney. Yes, ma'am.
Ms. Velazquez. Have you ever conducted work for the CFPB
while at the offices of OMB?
Mr. Mulvaney. On the weekends I like to sit at my OMB
office and do my reading--
Ms. Velazquez. Yes or no?
Mr. Mulvaney. The answer is yes, ma'am.
Ms. Velazquez. Have you ever conducted work for CFPB while
in the Oval Office?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Have you ever conducted work for the CFPB
while in the Oval Office with President Trump?
Mr. Mulvaney. No, ma'am. Since I--I don't get to go in the
Oval Office when the President is not there.
Ms. Velazquez. OK. So he is never there?
Mr. Mulvaney. No. You asked me the first question, have I
ever done it in the Oval Office, and the answer is no. So, by
definition, I couldn't do it in the Oval Office with President
Trump.
Ms. Velazquez. Well, you could be with the President
discussing some issues. Maybe you are asked a question about
CFPB and you conduct the business right there.
Mr. Mulvaney. Right, but I am saying no to both your
questions.
Ms. Velazquez. OK. Have you ever--thank you. Have you ever
conducted work as director of OMB while at the offices of the
CFPB?
Mr. Mulvaney. I may have taken a phone call occasionally,
but most of my OMB work is done at OMB.
Ms. Velazquez. So you do. Do you receive separate paychecks
from both OMB and the CFPB?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Do you receive only one total paycheck?
Mr. Mulvaney. Yes, ma'am.
Ms. Velazquez. Do you maintain different Government-issued
email accounts for your roles at OMB and CFPB?
Mr. Mulvaney. Yes, ma'am.
Ms. Velazquez. Have you ever conducted CFPB business from
your OMB email account?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Have you ever conducted OMB business from
your CFPB mail account?
Mr. Mulvaney. Not--again--
Ms. Velazquez. Email.
Mr. Mulvaney. No, ma'am. I don't think I have ever done
either of those things.
Ms. Velazquez. You don't think. But are you sure, or you
are not?
Mr. Mulvaney. I haven't gone back to check every email, but
no.
Ms. Velazquez. OK.
Mr. Mulvaney. My practice is to do my CFPB work--
Ms. Velazquez. So will you please go back, check, and then
submit an answer?
Mr. Mulvaney. Every single one of my emails, Congresswoman?
Ms. Velazquez. No, it is not a--well, no. If you have two
email accounts--
Mr. Mulvaney. Right.
Ms. Velazquez. --that belong to each one of your two
positions, then why do you need to use one for the business
while conducting business with the other?
Mr. Mulvaney. My point is my practice is to do Bureau work
on the Bureau email and OMB work on the OMB email. Bureau work
on the Bureau phone and OMB work--I have three phones, and I do
my OMB work on my OMB phone.
Ms. Velazquez. Have you ever charged an OMB-related expense
to your CFPB expense account, including travel?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Have you ever charged a CFPB-related expense
to your OMB expense account?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Do you have an executive assistant for
either of your roles at the CFPB or OMB?
Mr. Mulvaney. Yes, ma'am.
Ms. Velazquez. Have you ever instructed your executive
assistant at OMB to carry out CFPB-related business?
Mr. Mulvaney. No, ma'am, which causes a great deal of
frustration for both of my executive assistants.
Ms. Velazquez. That is why you shouldn't be there.
Have you ever instructed your executive assistant at the
CFPB to carry out OMB-related business?
Mr. Mulvaney. No, ma'am.
Ms. Velazquez. Mr. Mulvaney, the financial crisis and the
great recession that followed led to five million Americans
losing their homes to foreclosure, and a million more losing
trillions of dollars in wealth. The CFPB exists to prevent
families from surrendering their hard-earned dollars to the
deceptive or unsavory business practices.
What lessons did you learn from the financial crisis and
the great recession, and how are you applying those lessons at
the CFPB?
Mr. Mulvaney. You want the lessons of the financial crisis
in 35 seconds? I think the answer is that the financial crisis
was a system failure of major proportion. And when any major
system fails there is no one cause, one single cause. The
financial crisis was caused by a variety of things, things--a
bunch of things that happened at the same time.
Was abusive lending in the housing market part of it?
Absolutely. Can we do better on enforcing the laws? Absolutely.
Do we look forward to doing that at the Bureau? Absolutely.
Ms. Velazquez. That is very encouraging. Let's wait for the
numbers to show that. Thank you.
Chairman Hensarling. The time of the gentlelady has
expired. The Chair now recognizes the gentleman from Wisconsin,
Mr. Duffy, Chairman of our Housing and Insurance Subcommittee.
Mr. Duffy. Thank you, Mr. Chairman.
And welcome, Director Mulvaney. I would just note from the
first part of this hearing there seems to be a bit of agitation
coming from the other side of the aisle. And I understand the
agitation, because Democrats don't have a lot of power or
control over your directorship of the CFPB, and nor do we on
the Republican side, because that was the intent of Congress,
to make sure that Congress has no power or control over the
CFPB.
And so, when you are a party in power with a President who
can appoint the director, this in line maybe with your view
point, you applaud the director because you think they are
great. But if you are not in power, there becomes a great deal
of frustration. And again, I would just note that it is by the
very structure of the CFPB that came from Dodd-Frank that my
friends voted for that is the cause of that very frustration.
I would just note to the gentlelady from New York when we
talk about five million individuals losing their homes, I would
argue there are a great number of those people who were getting
loans that were subsidized by the Government because of
Government policy that put people in homes they couldn't
afford. And by the way, we really haven't modified or changed
housing policy in America since the great recession.
But I want to ask you. Mr. Huizenga brought up the issue of
the economists. How many economists work at the CFPB? Are there
400, roughly?
Mr. Mulvaney. No, no, no, no. Congressman, it is 20, I am
told.
Mr. Duffy. Twenty? OK.
Mr. Mulvaney. I thought it was 40, but--OK.
Mr. Duffy. OK, 20.
Mr. Mulvaney. I was saying--
Mr. Duffy. In essence, you could--and are these well-paid
individuals?
Mr. Mulvaney. They are. I don't--I have the numbers
someplace, if you really want them.
Mr. Duffy. That is OK.
Mr. Mulvaney. But the--
Mr. Duffy. But no, no--but so--but you are saying you could
reduce the economist staff from 20 to 10 if they spent 100
percent of their time working on CFPB issues?
Mr. Mulvaney. In theory, yes, sir. And the same amount of
work would get done. It is very, very difficult to reduce the
size of a Federal staff.
Mr. Duffy. And I will ask you about that in a second. But
if that is--if you are, on average, making $200,000 a year--and
I imagine they might make more than that, we complain about the
salaries at the CFPB, I will save that for a different time--
but 10 people, 200 grand, that is $2 million a year that you
could save if you were able to reduce the staff and make them
actually work on CFPB issues.
Mr. Mulvaney. Yes. If you assume they are working 50
percent for--that is exactly right, the math is right.
Mr. Duffy. Thank you. I was never very good at it, so I
appreciate your--so--but you can't fire or modify--you can't
fire anyone at the CFPB, is that right?
Mr. Mulvaney. It is--it would be--it is not accurate to say
we can't fire anybody in any circumstances. It is
extraordinarily difficult to reduce the size of a Federal
bureaucracy.
Mr. Duffy. And how about--
Mr. Mulvaney. Harder at the Bureau than it is at an
appropriated agency.
Mr. Duffy. And hence how--you have reduced the staff by how
much?
Mr. Mulvaney. Ten people since I--
Mr. Duffy. Ten people.
Mr. Mulvaney. Out of 1,700.
Mr. Duffy. So the great conservative Mick Mulvaney has
reduced the staff by 10 out of 1,700 employees.
Mr. Mulvaney. Taking a meat cleaver to it. Yes, sir.
Mr. Duffy. OK. And if you wanted to redirect the work of
those economists, could you do it?
Mr. Mulvaney. Yes, I think we would be able to do that. We
will have to jump through some hoops to do it with the union,
and so forth, but I think we will be able to at least get those
folks to spend their independent research time on things that
pertain to the mission of the Bureau.
Mr. Duffy. I want to go quick. You are a lawyer, right?
Mr. Mulvaney. Yes, sir.
Mr. Duffy. And we think that the Congress, when it crafts
legislation, when it uses language in one part of a bill but
not in another, they do it intentionally. So if the Congress
says that people are to come to Congress and testify or appear
and testify or appear and answer questions, they intend them to
come and answer questions. But if for the director they say
that you should just appear and don't specify, like they did in
other sections, that you answer questions or you testify, it
was done intentionally. Right? That is the way young lawyers
learn on statutory construction. Am I correct on that?
Mr. Mulvaney. Inside Dodd-Frank the director of FSOC
(Financial Stability Oversight Council) is required to report
and testify before Congress.
Mr. Duffy. Testify.
Mr. Mulvaney. The director of the Office of Financial
Research is directed to appear and answer questions and
testify. I am not required to do that.
Mr. Duffy. And so it would be our belief that it was the
intent of Dodd-Frank that you appear but not be required to
answer questions.
Mr. Mulvaney. And that is the interpretation the courts
usually--
Mr. Duffy. The holy text of Dodd-Frank and the CFPB, it is
surprising that they would have that wrong.
One--my time is almost up. I was the Chair of the Oversight
Committee, and I asked Director Cordray countless times for
information. And oftentimes I would be responded with news
clippings or press releases from the CFPB. We know that the IG
has done a number of investigations. With the transition from
Cordray to Mulvaney, have you seen any evidence of requests
that have been made by the IG or the Congress that were not
complied with that you now have been able to comply with?
Mr. Mulvaney. Yes, sir.
Mr. Duffy. What were they? Quickly.
Mr. Mulvaney. We have recently come across some documents
that we believe to be responsive to previous IG requests that
were not previously produced.
Mr. Duffy. Documents in the basement, or were they readily
available to you, as the director?
Mr. Mulvaney. In the director's file.
Mr. Duffy. In the director's file.
Chairman Hensarling. The time--
Mr. Duffy. I yield back.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from California, Mr.
Sherman.
Mr. Sherman. Mr. Mulvaney, welcome back to Congress. As you
may have noticed, we on this side do not like your dual role.
However--
Mr. Mulvaney. I will take it better than not liking me, Mr.
Sherman, but that is all right.
Mr. Sherman. That is nothing personal.
Mr. Mulvaney. I know.
Mr. Sherman. Don't like the dual role. However, I will
point out that right now I would assume the Trump
Administration is trying to determine your successor, who will
be a full-time person dedicated to being a handmaiden for the
financial services industry.
I have seen the full-time appointments that Trump has made
to other positions, and we may wax nostalgic for this day, in
that I am not sure that Trump will appoint a full-time
successor that will be more--do things that the Democrats
support.
In the past, Democrats have been opposed to a commission
and wanted a sole director. It is my understanding that the
Chairman has changed his mind, and is now for a sole director,
too, because he anticipates that your sole--that the sole-
director successor of yours will be the most efficient
structure to rapidly repeal all the good work done by your
predecessor. I would just say that what consumers and
businesses want is not a lurch to the left or a lurch to the
right and then another lurch to the left, but steady and
ascertainable regulations.
So there has been a concern that your agency has regulated
through enforcement. What are you doing to make sure that more
guidance documents are drafted and released, more regulations
are published or defined, so that the people can know how to
live with these rules, other than just looking at the
enforcement action and trying to divine your policy through
what action you have taken?
Mr. Mulvaney. Actually, I think what we have done,
Congressman, is to try and focus more on the formal rulemaking.
It is easy to send a letter. It is a little bit harder to send
guidance. It is hard to do rules. But it is the right way to
regulate, to follow the Administrative Procedures Act, to go
through the appropriate steps to do that, because it allows
notice and comment, whereas guidance might not. Letters
certainly do not.
So we are trying to--
Mr. Sherman. Well--
Mr. Mulvaney. --simply go a little bit more by the book.
Mr. Sherman. Where the regulation is unclear, and you are
simply making--providing guidance, it is one thing to say--
Mr. Mulvaney. Yes, sir.
Mr. Sherman. --you don't know what the right policy should
be, you need notice and comment. Another time you always meant
to say this, but you said it in a way people can't fully
understand. More guidance documents would be--
Mr. Mulvaney. And I would agree with you, that is the
appropriate use of guidance. Yes, sir.
Mr. Sherman. --helpful. There is the Home Mortgage
Disclosure Act. Are you going to be using your authority to
provide a greater small-institution exemption from parts of
that Act?
Mr. Mulvaney. We have given notice of our intent to look at
some changes--again, going through the proper administrative
procedures. And I believe the two things we have noticed up
were the scope of the data set--the statute only requires, I
think, 11 data points; I think the previous leadership had
asked for 25--and also look at the size of the--the scope of
the financial institutions that might be covered.
Mr. Sherman. Section 1022 was designed to give your Bureau
the power to provide exemption from certain rules as to
community institutions and smaller institutions. Are you going
to use your authority under section 1022 to grant exemptions to
community institutions, the smaller banks, the credit unions?
Mr. Mulvaney. Again, it wouldn't be appropriate for me to
say we are or are not going to do that, because we are going to
go through the proper procedures. But I think our notice stated
of our intent to look at the scope gives an indication that we
are interested in collecting information on exactly the point
that you just raised.
Mr. Sherman. Finally, I would like to address this
silliness of you being required to appear but not testify. I
was here when Dodd-Frank was written. It was in this room, not
Mount Sinai. Not every word is perfect. In any other statute
where we require somebody to appear, they are expected to
respond to questions.
And Mr. Zuckerberg is across the hall right now, and there
is no statute that requires him to appear, except he would be
subpoenaed and--Mr. Mulvaney, you could have--you certainly
remember sitting on this side of the dais. I am sure that if a
statute required a Government official to appear, and that
Government official appeared but refused to ask questions, a
subpoena would be issued by the committee with bipartisan
support. So I am glad you have decided to answer our questions.
Mr. Mulvaney. And I appreciate that. It would be a
fascinating question, though, Mr. Chairman, since we are
getting into the legal technicalities, as to whether or not
your rules, which is what the subpoenas flow from, bind third
parties, which I am.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Kentucky, Mr. Barr,
Chairman of the Monetary Policy and Trade Subcommittee.
Mr. Barr. Thank you, Mr. Chairman, and welcome back,
Director Mulvaney, to the committee. I appreciate your candid
and refreshing testimony today, which continues to expose the
breathtaking lack of accountability of the agency that you are
now charged to lead. And I think you continue to make a
powerful argument that your predecessor perhaps unwittingly
made, and that is that there is a desperate need for a
fundamental overhaul of the structure of this agency to make it
much more accountable.
Dodd-Frank, as you may know, authorized the Bureau to issue
a rule that requires disclosure of fees and currency conversion
rates for remittances. And that rule that was promulgated by
your predecessor applies to institutions that execute 100 or
more remittances annually.
The Bureau's role, as it turns out, created a tremendous
amount of paperwork for credit unions, and slowed down the
process, adding additional expenses for those credit unions and
customers.
An example is in my home State of Kentucky, where the Fort
Knox Federal Credit Union was forced to actually exit the line
of services that they were offering to their 100,000 members,
mostly service members and their families, because of the
additional cost of executing these remittances. And that made
it harder for active-duty military personnel--especially those
who served at Fort Knox and who were deployed overseas on the
front lines in South Korea, Germany, and other places in the
Middle East, and that prevented those service members from
executing those remittances through their Fort Knox Federal
Credit Union back to their families.
I asked your predecessor about this issue, this problem. I
assumed that it was an oversight, and that your predecessor
would have wanted to correct this because he talked a lot about
helping our veterans and helping our service members. But when
I asked Director Cordray if he would consider exercising his
statutory discretion to fix this rule, here is what he said.
He said that the Dodd-Frank statute constrained him, and
mandated that he put a 100-remittances limit on it. And he
actually--he didn't blame those of us on this side of the aisle
for that. He actually was blaming Democrats on that side of the
aisle for voting for Dodd-Frank, for tying his hands, and not
allowing him to exercise any discretion to help our active-duty
military personnel and their families.
So, Director Mulvaney, would you disagree with your
predecessor? Do you believe that, under the statute, you have
the discretion to provide the relief to these credit unions?
And will you exercise it?
Mr. Mulvaney. We do not interpret the statute to say that
we have no discretion as to the 100 number.
Mr. Barr. And so thank you for that very different answer
from your predecessor. Will you consider working with our
office and our constituents, particularly the Fort Knox Federal
Credit Union, to perhaps move that disclosure threshold from
100 to 1,000 so that our men and women serving abroad can
provide those remittances back to their families?
Mr. Mulvaney. There is actually good news on that front,
Congressman. As part of the statute, we are required to do a 5-
year lookback on various rules. This is one of them. We have
actually already noticed that we are doing that here, and we
have requested information as to exactly the points that you
have raised.
So I would encourage anybody who is interested in this
issue to participate in that RFI assessment, that request for
information, as we gather data to try and determine whether or
not that rule needs to be changed--
Mr. Barr. Well, I appreciate that we have leadership at the
Bureau now that is actually working for our men and women in
uniform, and not against them.
And Mr. Mulvaney, as you know, the Bureau is not subject to
the congressional appropriations process. I appreciate the fact
that, in your third quarter budget request, you noted that by
design this funding mechanism denies the American people their
rightful control over how the Bureau spends their money, which
undermines the Bureau's legitimacy, which of course may explain
why you have all of these accountability issues at the agency
that you now lead.
I have consistently, year after year, term after term,
introduced the TABS Act, Taking Account of Bureaucrats'
Spending Act, a bill that would meet the recommendation in your
semi-annual report to subject the Bureau to the congressional
appropriations process. How do you think that legislative
change would improve the efficiency and accountability of your
agency?
Mr. Mulvaney. Thank you for the question. And I will say
this as someone who used to sit where y'all sit. Why y'all
don't want to put me on appropriations, I just don't get it. I
really don't. Why not have the opportunity to at least bring me
in and ask me how I am spending money, if I am spending money
to sponsor Dallas Stadium or what not?
What is wrong with putting me on appropriations? It is one
of the suggestions we make in our quarterly report. I may
understand why it was set up that way in the first place, but
why y'all would absolutely voluntarily give up the
appropriations process for this Bureau I just don't understand.
Mr. Barr. Director, a final question. Under the CFPB's
high-cost loan rule, Americans now cannot finance a
manufactured home loan. Manufactured home loans of $50,000 or
less have dropped significantly. Will you consider revisiting
the high-cost loan rule and increase the interest thresholds to
help Americans realize the dream of home ownership?
Mr. Mulvaney. Honestly, that is the first time I have heard
of that one, Mr. Barr. I would be happy to get back to you on
that one. I apologize.
Mr. Barr. Thank you. I look forward to working with you on
that, as well.
I yield back.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from New York, Mr.
Meeks.
Mr. Meeks. Thank you, Mr. Chairman.
Mr. Budget Director--
Mr. Mulvaney. Mr. Meeks?
Mr. Meeks. How you doing, Mr. Budget Director?
Mr. Mulvaney. Doing well, sir.
Mr. Meeks. Good. You are still the budget director, right?
Mr. Mulvaney. Yes, sir.
Mr. Meeks. Is that a full-time or part-time job?
Mr. Mulvaney. It is a full-time job.
Mr. Meeks. Full-time job. And the debt--my colleagues
always put up the debt numbers and the budget, and we know--we
have had these big numbers. And so are you focused on that at
all?
Mr. Mulvaney. Oh, I--
Mr. Meeks. Any more?
Mr. Mulvaney. I spend some time on the budget. Yes, sir.
Mr. Meeks. On a full-time basis?
Mr. Mulvaney. I have two full-time jobs. Yes, sir.
Mr. Meeks. And two full. Is that--you think the--I don't
know many people that work two full-time jobs and do both of
them in a exemplary manner. If it is--especially when you are
talking about a budget that is as big as the United States of
America's is, and the issues that we have. I would think that
the American people would want someone that is focused on the
budget.
And you were initially appointed by the President of the
United States, from what I understand, to run the budget. Is
that correct?
Mr. Mulvaney. Yes, sir.
Mr. Meeks. OK. Now, also I find--because, just as Mr.
Kildee--you represented when you were in Congress, of course,
my parents' home town, Rick Hill, et cetera--found you being
pretty much an honest guy, whether we disagree.
And in your statement you said earlier--and I think you
have indicated to Ranking Member Waters that maybe it was--
sounded like something you had said--you said if--to be
perfectly honest, you don't like the--didn't like the fact that
the CFPB exists.
Mr. Mulvaney. Correct.
Mr. Meeks. Is that correct? And--
Mr. Mulvaney. I think my comment was I don't remember
specifically saying that, but I am not denying it.
Mr. Meeks. That is not something that would be--
Mr. Mulvaney. Right, exactly.
Mr. Meeks. And you haven't changed your mind on that, have
you?
Mr. Mulvaney. No, sir.
Mr. Meeks. OK.
Mr. Mulvaney. Generally, no.
Mr. Meeks. All right. That is right. And so you also said,
certain things about it being a joke, that the CFPB really has
been--and it is sad and it is sick. Those are your statements.
And those have not changed, either, right?
Mr. Mulvaney. I think the Bureau screams out to be
reformed. Yes, sir.
Mr. Meeks. So if, in fact, it would seem to me, that those
statements are true, then what is the best way to get rid of
the Bureau? Because you never were for the Bureau, you didn't
want the Bureau, you thought it was sick.
The best way to get rid of the Bureau would be to take it
over to get rid of it, because that is what your point--it is
not--it wasn't--you never were in support of it, you never
thought that the Consumer Financial Protection Bureau needed to
be. And so now you happen to be in power. The President
appointed you as budget director. You make a--he makes a
determination and you see the opportunity now to get rid of the
Bureau.
So what do you--how do you get rid of the Bureau? You stop
doing what it does, helping consumers. So you stop then doing
the investigations, you stop doing the enforcements, you stop
doing the kinds of things that the Bureau was put into
business, to create, to do.
So then, it seems to me, what you do--illegally, if you
have to, because you are doing your job as the budget director,
the President can't see anyone else who is more intent on
destroying the Bureau than a former Member of Congress who has
specifically stated that he did not want this Bureau to exist.
And so I don't know what it is with this Administration. It
seems to want to put people, one way or another, into
leadership when it doesn't believe in the Bureau itself or in
institutions, which is what my problem is with this
Administration. It seems as though it wants to undermine every
institution that we have.
Why do I say that? Well, we have a person that is now the
Secretary of Education who doesn't believe in public education.
You have a person now who is the head of Environmental
Protection who doesn't believe in it, in environmental
protection. So then it seems consistent that what the President
would like to do is to put a person to be the head of the
Consumer Financial Protection Bureau who does not believe, by
his own admission, in the Consumer Financial Protection Bureau,
unlike your predecessor, who believed and had a lifelong job of
trying to protect consumers.
Isn't the fact that you have never in your career protected
consumers?
Mr. Mulvaney. With respect, no, sir. That is not accurate.
As I have mentioned before, we are protecting consumers in 25
ongoing pieces of litigation--
Mr. Meeks. But not you.
Mr. Mulvaney. --against bad actors. Oh, no, no. Yes, sir.
Mr. Meeks. I am just talking about prior to--even prior to
this job.
Mr. Mulvaney. To be perfectly--
Mr. Meeks. There has not been a thing that you have ever
said as a Member of this committee, as a Member of Congress,
that was pro-consumer. And now you are in charge of the
Consumer Financial Protection Bureau, or so you want to be--
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Mexico, Mr. Pearce,
the Chairman of our Terrorism Finance Subcommittee.
Mr. Pearce. Director, nice to see you here. Thanks for
taking our questions. If you would like to respond--I saw you
trying to respond. If you would like to give an answer you can
take 45 seconds here.
Mr. Mulvaney. Just very briefly, we are enforcing the law.
To Mr. Meeks' point, I have it within my discretion--along the
list of things that Mr. Hensarling went down that I could do
that he didn't talk about in his opening statement, I could
today, if I wanted to, dismiss every single one of those 25
pieces of litigation. I could stop all 100 investigations that
are ongoing right now. We have chosen not to do that, because
we are still enforcing the law. We are just doing it
differently and with more restraint than the previous
leadership was doing.
I will defend that. I have a different view of the world
than my predecessor does, just like you have a different view
of the world than the folks who sit on the other side of the
aisle. But we are still enforcing the law. I am in the
Executive branch of Government, and my job is to enforce the
law. We are doing it. We are doing it differently than other
folks might do it, because elections do have consequences.
But to say that we are not enforcing the law or we are
acting illegally--and I don't think Mr. Meeks implied that I
was doing anything illegally--is just not accurate.
Mr. Pearce. One of the charges of our predecessor--or your
predecessor--was protection of the consumers. And beginning
almost at his first day we kept pointing out how he was
damaging some of the most fragile consumers, and those are the
ones who live in my district.
Fifty percent of the homes in my district are manufactured
housing. And so, when they lumped--when they defined rural,
they put one of the most--the least populated districts,
counties in the Nation right in with New York City, and they
implemented the same laws.
And so I sat yesterday with a banker from that very county,
and she said still the rules from that agency are choking off
their ability to lend money so that most of the banks have just
gotten out of the products.
So the definition of rural has gone through many, many
changes under the previous director. But if you would look at
that and see if we can un-thread it a bit more, we would be
happy to work with you.
We are working with the minority in this committee to try
to get up the language for the whole balloon notes. That became
very problematic. Again, the balloons for manufactured housing
are set in place so they can look at them. They don't re-
amortize, they just look at them every 5 years and continue on
if the product is still in worthy condition.
And so, if we get language, I would really like for you to
use the language we have come up with in bipartisan fashion
here with the Ranking Member's office and ourselves. So we have
that question.
So finance is another thing. Many times people live their
lives, they will buy six, seven, eight of these manufactured
houses. They will live in one, then they will--when they
retire, they sell them, one at a time. And so the previous
director put a cap on that at three. If we could extend that
back out--what we have done, when they put that cap, is we
limit finance to people who are very fragile, financially. They
are usually at the bottom end of the economic spectrum.
Usually, they don't have good credit ratings, and people will
take a chance on them.
So it is one of the ways that we make a rural, low-end
economy work. And the previous director had closed off so many
avenues to people just trying to get by. And so those things
just make common sense.
And we were in a year-long discussion with the previous
director, and it is almost as if they couldn't hear, that they
didn't want to hear that we were actually out there trying to
get consumers protected and actually trying to do things that
would help them out. So just--that is important.
Now, one of the ways that the previous director really said
he was working on was data, and I think that I would like for
your perspective, now that you are in the office. How data-
driven were they? Because I could never see the correlation,
myself. And then maybe explain which direction you are going
in, in the use of data.
Mr. Mulvaney. Here is how I would answer that question, is
that, first of all, I think I mentioned before the role of
qualitative analysis versus quantitative, which I think is
substantively very different. Not to say that neither of them
have any value, but clearly qualitative analysis can be
somewhat subjective, by definition.
If there is one complaint that I think I have heard from
the financial services providers as a group, writ large, is
that they felt like their input was always ignored. They felt
like--and I am not saying this is, because I wasn't there, but
they felt like the decision had been pre-cooked, and that the
Bureau was just checking the box when they reached out to
folks.
To the extent anybody felt that way, from consumer
advocates to industry advocates, we are hoping to do that
differently under my leadership.
Mr. Pearce. Thank you. My time has expired. I yield back.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Massachusetts, Mr.
Capuano.
Mr. Capuano. Thank you, Mr. Chairman.
How are you doing, Mr. Director? I am not sure. I am
hearing a lot of rumors today. My understanding is--I would
like you, right from the horse's mouth. Is it true that you
intend to run for the Speaker of the House next year?
Mr. Mulvaney. It is interesting, because I don't think you
have to be a Member to run, right?
Mr. Capuano. You don't.
Mr. Mulvaney. That is--
Mr. Capuano. No, you can be--one more job, wouldn't hurt.
Mr. Mulvaney. I have two jobs, that is enough for me.
Mr. Capuano. Two is all you want? We might actually be able
to throw in a few extra bucks for you.
Mr. Mulvaney. Would you vote for me?
Mr. Capuano. It depends. We could talk.
It depends what you do with the CFPB.
Mr. Mulvaney. No, I am happy with the two I have. Thank
you, sir.
Mr. Capuano. All right. Thank you, Mr. Director. Mr.
Director, I just want to follow up on what Mr. Meeks had to
say. And I think the litany of people in this current
Administration and their beliefs really proves beyond a shadow
of a doubt, in case anybody wonders, that elections have
consequences.
And I am not surprised that any of those appointments--or
at least the philosophy shared by any of them--by the Trump
Administration. He doesn't believe in Government, and he won
the election. I don't like that, but it is a fact, and I think
people at home need to know that.
I want to talk about a little issue, a smaller issue, a
different item. I am just curious. At one point you earlier
said that discrimination is abhorrent. Do you believe that
women should be paid equally for the same work as a man?
Mr. Mulvaney. Actually, I do, and I think that is the law.
Mr. Capuano. I think it is the law, but I am just curious
what--your beliefs.
Mr. Mulvaney. Yes, sir.
Mr. Capuano. Do you believe that African-Americans should
be paid the same as white people?
Mr. Mulvaney. Yes, sir. Again, I think that is the law--
Mr. Capuano. And Hispanics and on and on and on.
Mr. Mulvaney. Yes, sir.
Mr. Capuano. People should be paid the same when they do
the same work.
Mr. Mulvaney. Again, I think that is the law, yes, sir. And
I agree with that.
Mr. Capuano. That is what I want to know. And I am glad. I
thought you did, but I wanted to hear it.
Then when that happens, in order to have not just the law,
but to actually fulfill it, how do we know what is happening if
we refuse to take information from employers as to how they pay
their people?
Mr. Mulvaney. I am sorry, I am hard pressed, Mr. Capuano,
as to how this ties to what the Bureau is doing, helping--
Mr. Capuano. Well, what it ties to is a direction that you
took last September to stop the EEOC from instituting a new
form that they worked on for 7 years--7 years--to try to find
out--to try to prove, one way or the other, whether employers--
and I think most of them are, but some employers are not
fulfilling their legal requirement. Some employers may be doing
it intentionally, may be doing it unintentionally. But how
could you possibly know, without the information?
Mr. Mulvaney. And Congressman, I am sorry, I don't mean to
dodge the question, but I believe that is a--that you are
talking about something I did in September. It must be OMB. And
I recall a little bit of something about the changes that we
made to the--I think it was the EEO1 form, or--
Mr. Capuano. Yes, that is correct.
Mr. Mulvaney. The EO1 form, or something like that. But in
all fairness, I have not looked at that since September. And I
am not trying to dodge, I would be happy to answer that
question--
Mr. Capuano. That is a fair answer. But that is also
troubling, that you haven't looked at it since September. If
you are going to have two full-time jobs, two full-time jobs is
what you have, which means if you stop something, which you
actively took active action to prevent this new provision from
coming in place, then I think you have an obligation to take a
look at it, since between September and now, especially when it
impacts millions upon millions of women and African-Americans
and Hispanics--we all know the numbers. Women make $.80 on the
dollar. African-Americans, I think, it is $.57 or $.63.
Latinos, 54 cents on the dollar.
We all say that we want to do something about it, yet the
one time we take a step toward doing it, you proactively
stopped it. And I am just wondering. When are you going to get
around to looking at it, so you can actually do something about
it?
Mr. Mulvaney. And again, Congressman, I am not trying to be
evasive, but I have not been asked that question, I don't
think, since September. And I have done 15 press conferences,
and I have been in front of Congress 3 or 4 times. So I
apologize, I am just simply not prepared to talk about that.
I am not saying that what you said is inaccurate, but I am
also not admitting that it is true. And I look forward to
talking to you about it.
Mr. Capuano. It is fair, I am not trying to do a gotcha
type of thing. And to be honest, I am a little surprised nobody
has asked you.
Now, it is, to me, surprising in this day and age that we
can have a whole group, several classes of people, being
intentionally or even unintentionally paid less, and yet this
Government refuses to do anything about it. And I--again, I
appreciate it. I am not trying to get you today. But at some
point in the near future, I would like to hear from you as to
when you or your agency plan on taking action to correct the
situation.
Mr. Mulvaney. Yes, sir. Thank you.
Mr. Capuano. With that, I--
Mr. Mulvaney. And if I suggest--if you want to send me a
letter at the OMB office, I would be happy to respond to you in
writing.
Mr. Capuano. We shall be doing just that.
Mr. Mulvaney. Thank you, sir.
Mr. Capuano. With that I yield back my 18 seconds
remaining.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentleman from Pennsylvania, Mr. Rothfus.
Mr. Rothfus. Thank you, Mr. Chairman. Welcome back,
Director Mulvaney.
Mr. Mulvaney. Yes, sir, Mr. Rothfus.
Mr. Rothfus. Talk a little bit about this regulation by
enforcement, the CFPB with the UDAP, the Unfair, Deceptive, and
Abusive Acts and Practices authority it has, it--you mentioned
in your op ed about how the CFPB was ``pushing the envelope.''
While there is some precedent that can provide us with an
interpretation of what is unfair or deceptive, it is still
unclear what ``abusive'' means. This allowed your predecessor
to regulate by enforcement on a case-dependent basis. It also
created uncertainty for market participants about what the
rules actually were.
I am wondering if you can comment on why it is important
that market participants have a clear understanding of the
rules.
Mr. Mulvaney. Yes, I am--thank you for that. And I tell you
if I wanted to add to the list of things that y'all could help
me with, help me with the definition of ``abusive.'' Give me
some legislative guidance on that, because it is full of gray
areas in the way the statute is written right now. It is--it
can be abusive if it materially interferes with the ability of
a consumer to understand a term or condition of a consumer
product, financial product, or takes unreasonable advantage.
For the lawyers in the room, they will know that those are
all very, very subjective terms: ``materially unreasonable''
and ``materially reasonable.'' It is throughout the statute,
which gives a great deal of discretion to my predecessor, and
now a great deal of the discretion to me. What I think might be
material could be very different than what Mr. Cordray
intended, and I am not sure that was the intent of what
Congress wanted to do.
It is the statute, but if y'all could help me with some
guidance on what that means, that I think would provide clarity
for everybody, because right now you are in the exact
circumstance that I think Mr. Meeks may have mentioned before,
about swinging wildly from one interpretation on the left to
another on the right, depending upon who is in charge. That is
never a formula for certainty in the marketplace--
Mr. Rothfus. Well, certainty and due process. Where does
due process come out in the mix on that?
Mr. Mulvaney. Not on that piece of paper.
Mr. Rothfus. I understand the Bureau has published a
request for information regarding the public reporting of
consumer complaint information. This is an important issue, and
I applaud the Bureau for taking it up.
Like many on this committee, I am concerned about consumer
privacy and the potential for consumer complaints to be
misinterpreted or misused. This information could be a helpful
public resource, if presented correctly. But it could also
mislead the public if not properly handled.
I urge you to carefully consider what information should be
published and how it should be presented, going forward. I
understand that you may need to be somewhat constrained in your
remarks, since the process is still ongoing. But any insight
you could provide on this issue would be helpful.
Mr. Mulvaney. I do share your concerns, and maybe we can
talk, if somebody wants to, about some of the data security
issues that we face, as an agency. I haven't had that question
yet. I would be happy to talk about that. But I am very much
concerned about the privacy of that data, about the use of that
data, about the unverified nature of some of that data. So we
are taking a long, hard look at it within the Bureau.
Mr. Rothfus. What would you expect to see if the CFPB were
subject to an appropriations process?
Mr. Mulvaney. That we act a lot more accountably to you
folks.
Mr. Rothfus. You would have to justify things like an
economist who might not be spending half of their time on CFPB
work?
Mr. Mulvaney. Let me put it to you this way. This Bureau
has been around for what, now, 6, 7, 8 years? Something like
that? Did y'all know about that before today? I didn't. It took
me--I found out about a month ago. Do you think if I had been
on--if the Bureau had been under appropriations that someone
may have found out about that before today? Probably so.
And you may decide it is a great use of money, and that is
fine. But my point is an appropriations process helps shed
light on things, and y'all are voluntarily choosing not to do
that, and I do hope you would remedy that situation.
Mr. Rothfus. Maybe we could shed some light on the
construction of the workspace at the CFPB and the kind of--
Mr. Mulvaney. The construction accounts, the average
salary. I got--what is it, 380, 381? I think 381 people who
work for me that make more than you do. Did y'all have any idea
about that? Would you have known about--and again, you may
think that is completely fine and justifiable, but it is
knowledge that you have not had for the last several years,
because there is simply a lack of transparency into the Bureau
that would be brought to the fore by going through the
appropriations process.
Mr. Rothfus. With that, Mr. Chairman, I would yield you
time, if you would like to ask any questions.
Chairman Hensarling. I do want to return back to this use
of the term ``abusive.'' I am sorry, Mr. Director, is there a
clarification?
Mr. Mulvaney. No, the number was 370 folks who work there
who make more than you, not 381. I apologize.
Chairman Hensarling. So with respect to the term
``abusive,'' your predecessor could never answer the question.
You gave us the statutory definition, which shed absolutely,
positively no light.
So we have the UDAP terms of unfair and deceptive. There is
long case history on what those mean. We know that the Bureau
has moved to find some products abusive. But can a product be
abusive without either being fraudulent, deceptive, or unfair?
Mr. Mulvaney. Given the definition, I don't know the answer
to that question.
Chairman Hensarling. So do you consider it to be absolutely
redundant?
Mr. Mulvaney. I consider it to be almost entirely
discretionary, which frightens me probably even more.
Chairman Hensarling. The time of the gentleman from
Pennsylvania has expired. The Chair now recognizes the
gentleman from Missouri, Mr. Clay, Ranking Member on the
Financial Institutions Subcommittee.
Mr. Clay. Thank you, Mr. Chairman. And welcome back, Mr.
Director. Hopefully your golf game has not suffered over the
last few months.
Mr. Mulvaney. It is miserable. Mr. Gowdy beats me regularly
now, which I can't stand.
Mr. Clay. Let me say that I welcome your discussion this
morning. And I would like to talk about the semi-annual report
of the CFPB and your role to address the fair lending mission
of the Bureau.
I want to turn your attention to a February 2018 article
published by the St. Louis Post Dispatch--my staff will share
it with your staff--about a couple wanting to purchase a home
in a predominantly African-American community, but was
encouraged by the loan officer of U.S. Bank to look in other
neighborhoods. So a bank loan officer is virtually steering
borrowers to other neighborhoods, as the article stated. I
believe that is redlining, and is breaking the law.
This being the 50th anniversary of the Fair Housing Act,
how will you ensure that lending discrimination is not a
prevalent practice among lenders?
Mr. Mulvaney. The same way it has been done since this
Bureau was created. Like I said, we have 100--the reason I
turned around to ask the question is I did not know if we have
an active investigation of U.S. Bank going right now, and we
are not really sure. Again, there is--
Mr. Clay. OK.
Mr. Mulvaney. --nearly 100 of them. But that process has
not changed. I have not changed the investigative process, we
have not changed the sue-or-settle process. We are continuing
to enforce the law.
And if it turns out--granted, we both know that sometimes
things we read in the newspaper aren't entirely accurate--
Mr. Clay. Sure, sure.
Mr. Mulvaney. But under certain facts and circumstances,
that would be perceived as being illegal activity, and
something that we would pay attention to and seek to remedy.
Mr. Clay. Thank you for that response. Well, the Bureau's
Office of Fair Lending and Equal Opportunity has had many
successes, including record court settlements for consumers who
were illegally discriminated against in credit card, mortgage,
and indirect auto lending. And you recently made changes to
diminish the powers and role of their critical office.
Is it your view that these laws simply aren't a priority,
or that you don't intend to enforce--
Mr. Mulvaney. Neither of those things. And I would
actually--I don't agree with the representation that we are--
diminishing the powers. I have mentioned before it does--it has
two functions. It does a supervision enforcement, which is part
of the Office of Fair Lending, and then it does an education
component.
Within CFPB, those things traditionally have been
separated. We have an Office of Supervision and Enforcement,
and an Office of Education. And all I did was simply put the
two things within fair lending under what I considered to be
the appropriate branch of the organization.
Mr. Clay. And you still believe--
Mr. Mulvaney. Did not lay off a single person, did not
change anybody's job description. I think they may change who
they answer to, but their duties have not changed. It is simply
a re-organization within the Bureau.
Mr. Clay. OK. Final point, then. Appraisals of real estate
appear to be a contributor to discrimination in our housing
market. And as you are probably aware, African-American family
wealth is one-tenth of white American family wealth. Do you
think the CFPB has a role to play in eliminating racial
discrimination in our housing market?
Mr. Mulvaney. We absolutely have a role to play in
eliminating discrimination in the housing market. Yes, sir.
Mr. Clay. And you know, having served with you, I have
always found you to be a straight shooter. And if you see--and
you call balls and strikes. And if you see something wrong, you
don't shy away from it. So hopefully, in this instance, we can
work with your Bureau to try to root out discrimination.
Mr. Mulvaney. Thank you, sir.
Mr. Clay. Thank you, and I will share the article with you.
I yield back, Mr. Chairman.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentleman from Texas, Mr. Williams.
Mr. Williams. Thank you, Mr. Chairman, and Acting Director
Mulvaney. It is good to see you here today. It is always a
pleasure to welcome a former Member of this committee to
testify, and we miss having you sit amongst us. And I also miss
you and will miss you at the baseball practice that--our team
has always been better with you on it.
Mr. Mulvaney. Still hoping to be invited to a couple of the
practices.
Mr. Williams. Be nice to me, then. All right.
You are right when you say that the CFPB is far too
powerful with precious little oversight of its activities. Far
too long the Bureau has taken actions which unfairly target
businesses, hurt customers, and impose big-government policies
with far-reaching implications for the financial market. Your
leadership, as acting director of the CFPB, has become a
welcome change from that of your predecessor. I am glad, too,
that our friends on the other side of the aisle are finally
recognizing you as the rightful acting director.
First question, I applaud the important work that this
Administration has done to roll back some of the
unconstitutional overreaching authority of the Bureau, but I
also recognize that more needs to be done. So what can be done
to ensure that under any new director or Administration the
CFPB cannot reverse course and again enact failed policies that
harm American consumers and businesses?
Mr. Mulvaney. You have to change the statute. The way the
statute it written now, in order to prevent that pendulum
swinging from the right to the left, from the right to the left
with alternating Administrations, you have to change the
statute. That is why I say that it is the DNA, it is the
structure of the Bureau that needs to be fixed.
I can fix things the way that y'all want me to fix them,
OK, and would upset those folks. And then, if a Democratic
Administration comes in, they will fix them the way these folks
would like to see it and it would upset you folks. But it
wouldn't bring very much constancy or certainty to the markets.
Markets--including certainty for the consumers.
So that is why I say, in order to fix it, you have to take
the discretion away from the Bureau--most specifically away
from the director--and take back the authority as the
legislature of the country. And that is why we have made the
specific--the four specific recommendations in the semi-annual
quarterly report. We would love to take you up on those things.
That is why we support a lot of the work that this
committee has done on a bipartisan basis to reform the Bureau.
But it needs to change in the law. Otherwise, it will go back
and forth and back and forth and back and forth.
Mr. Williams. The next question I have for you concerns the
Bureau use of discretion rulemakings. Congress gave the CFPB
the authority under section 1022 of Dodd-Frank to exempt
institutions based on size. Yet in the past it has not
exercised that authority.
In fact, I have a bill, the Community Financial Institution
Exemption Act, that would strengthen section 1022 by exempting
credit unions and community banks under $50 billion in assets
from the CFPB rulemakings, unless the CFPB and other Federal
regulators have cause to include them.
So should the Bureau take better advantage of its authority
to exercise 1022 authority in future rulemakings?
Mr. Mulvaney. And I think we have already indicated an
interest in doing that. As I discussed earlier, on the--our
notice of what we are going to review in the Home Mortgage
Disclosure Act, the HMDA rules, are the scope and what
financial institutions are covered. The size of the financial
institutions that we are going to cover is exactly one of the
things we want to gather information on and take a look at. And
it is pursuant to the authority you have just referenced.
Mr. Williams. Good. Third, since your arrival you have
brought about a starkly different mission and culture at the
Bureau than your predecessor. What steps have you taken to
right-size the organization, and what bureaucratic hurdles
prevent you from hiring, firing, or changing the role of
personnel and office structure as needed to fulfill the
Administration's vision for the CFPB?
Mr. Mulvaney. Nothing limits my--well, nothing. Almost
nothing limits my ability to hire. The only limitation I have
on hiring people is the amount of money I am allowed, by law,
to draw down from the Federal Reserve.
There are significant restrictions on my ability to reduce
the size of the force, significant restrictions on my ability
to re-assign people. There is a restriction on where this
office can physically be located. So there are a bunch of
restrictions on the actual operation of the Bureau itself.
Mr. Williams. OK. Mr. Chairman, I yield my time back to the
Chair.
Chairman Hensarling. I thank the gentleman for yielding to
the Chair.
Mr. Mulvaney, I am curious, as I look at some of the
rulemaking that has occurred prior to you coming to the
committee--I am sorry, to the Bureau.
For example, this committee, as you probably know, since
you were here, put out several staff reports indicating how
CFPB's indirect auto lending guidance was essentially unlawful,
how it hurt consumers, how many consumers were forced to pay
over $500 more in interest. And indeed, our investigations
revealed that the CFPB's own attorneys questioned their own
legal theories. Perhaps this was part of that pressing the
envelope. How come this guidance hasn't been formally
withdrawn?
Mr. Mulvaney. We are reviewing it.
Chairman Hensarling. That is the answer?
Mr. Mulvaney. We are reviewing it now, yes, sir. And I
usually don't go into the internal discussions between us and
our lawyers and stuff, so--
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Massachusetts, Mr.
Lynch.
Mr. Lynch. Thank you, Mr. Chairman. And Director Mulvaney,
welcome. Thank you for appearing before this committee to help
us with our work.
I do want to touch upon a couple things. One is I know that
there is some contest about the appropriateness of your
appointment, and so I don't want any of my questions or my
engagement with you to count against those who might challenge
the appropriateness of that appointment.
Mr. Mulvaney. Understood. Thank you, sir.
Mr. Lynch. However, I do want to touch on one thing that
you mentioned at the outset, and that is that you are not
required to come before this committee and testify, that you
could--I think I am quoting you--sit there and twiddle your
thumbs.
I do want to point out--first of all, do you--were you
saying that in jest? I know that you are fairly comfortable
here, having been a Member.
Mr. Mulvaney. No, sir. And I hope I have proven by my
responses that I am interested in answering--
Mr. Lynch. Oh, yes, yes. I am just--
Mr. Mulvaney. So--
Mr. Lynch. I am just--I know you are not standing on that
point.
Mr. Mulvaney. Yes.
Mr. Lynch. I am just questioning whether you actually
believe in it.
Mr. Mulvaney. No, I do. I--any lawyer will tell you that
when you are faced with competing language, similar language in
two sections of a statute, and one says X and one says X plus
Y--
Mr. Lynch. All right, OK.
Mr. Mulvaney. --we assume that there is--
Mr. Lynch. I just wanted to test that. You realize it is
the same language that is in the Federal Reserve Act, where we
have the Chairman of the Federal Reserve come up here and
testify. He is just required to appear, as well. And I would
say on behalf of Congress and you as a Member, we never would
allow the Chairman of the Federal Reserve Board to come up here
and just sit there and twiddle his thumbs and not respond to
Congress. We have an oversight responsibility.
And I hope it is not reflective of your view of our role
here, that you could somehow resist or refuse to engage with
us, especially where you have the responsibility over the
Consumer Financial Protection Bureau. And, maybe that is
something for the lawyers to fight out later on, but I
certainly want to maintain Congress' ability to have you engage
in a meaningful way.
On top of that, we know--I served with you. You served
honorably, and you stuck to your guns, no question about it.
But you were clearly, clearly one of the people who was most
hostile to the creation and operation of the Consumer Financial
Protection Bureau.
Mr. Mulvaney. I wasn't here for the creation. But yes, sir,
it is fair to say that I was hostile to the existence of the
Bureau.
Mr. Lynch. Yes. So it shouldn't come as a surprise that
many on our side of the aisle, those who have the highest hopes
for consumer protection, would see you the fox in the hen
house, right?
Mr. Mulvaney. Doesn't surprise me at all. No, sir.
Mr. Lynch. Yes. There is some credence to that. And before
you took over, we had about one investigation a week that was
going on, we had--we still have a million complaints to the--
outstanding to the portal, the CFPB website. We got stuff like
Wells Fargo, where they are actually robbing their customers,
creating false accounts and--so the need for enforcement has
not gone away. And I know you say you have only laid off 10
people.
Mr. Mulvaney. I have not laid off anybody, but the--we
have--
Mr. Lynch. All right, so you got 10--I am just wondering.
Since you are not doing enforcement like Cordray was doing,
your predecessor, what are the enforcement people doing?
Mr. Mulvaney. Again, I don't think it is fair, Congressman,
to say we are not doing enforcement. You mentioned one
investigation--
Mr. Lynch. Well, you haven't initiated any enforcement
actions. We had, like, one a week before you got there. And
then you got there and, as I said before, you are hostile to
the operation of the CFPB, you are not into protecting
consumers, and all of a sudden the investigations stop.
Mr. Mulvaney. Yes, I--
Mr. Lynch. They stop. So we got a goose egg. We got
thousands before, you get in there and now we got zero. The
clear implication is that the people who were enforcing before
are not enforcing any more. And all I want to know is what the
heck are they doing now, because they are not enforcing the
law.
Mr. Mulvaney. And I will respectfully disagree with some of
the representations there. But here is how it works. If you
give me just a moment, I will do this very quickly.
There is a process, OK? It is a tunnel. And at the
beginning of the tunnel--
Mr. Lynch. I know. You got three buckets. I heard that
already. But one bucket is--
Mr. Mulvaney. But I never actually explained it, though.
Mr. Lynch. That is the enforcement initiation bucket--is
empty. You are not doing that--
Mr. Mulvaney. No, sir.
Mr. Lynch. --any more.
Mr. Mulvaney. And that is what I am trying to tell you,
sir. It is not empty. It is simply--when you look at the--
Mr. Lynch. It is what Cordray left you, but you are not
doing any initiation of any enforcement. You testified to that
earlier, sir.
Mr. Mulvaney. I answered a question, Congressman, which is
have I filed any lawsuits since I have been here. The answer is
no. That does not mean we are not doing supervision or
enforcement. And again, I would be happy to explain that in
writing to you, if I need to, about how the process works--
Mr. Lynch. You initiate--tell me--all right. Give me one
case that you have brought since you got there.
Mr. Mulvaney. As I said we have not filed any lawsuits--
Mr. Lynch. There you go.
Mr. Mulvaney. --since I have been there.
Mr. Lynch. All I can say. All right.
Chairman Hensarling. The time of the gentleman has expired.
Mr. Lynch. My time has expired. Thank you, Mr.--
Chairman Hensarling. The Chair now recognizes the gentleman
from Maine, Mr. Poliquin.
Mr. Poliquin. Thank you, Mr. Mulvaney.
Thank you, Mr. Chairman, very much, for the time.
Mr. Mulvaney, over here. Thank you very much. Mr. Mulvaney,
just to make sure I understand this and everybody watching
understands this, you do not have a directive to come here and
answer our questions. Is that correct, sir?
Mr. Mulvaney. I am sorry?
Mr. Poliquin. You do not have the directive in statute to
answer our questions today.
Mr. Mulvaney. I believe that the statute is written in such
a way that allows me not to--
Mr. Poliquin. OK. So you could come here and just tell us
to pound sand.
Mr. Mulvaney. I believe that to be the case. Yes, sir.
Mr. Poliquin. OK. Second of all, we don't appropriate--
Mr. Mulvaney. And so could anybody else who sits in this
chair.
Mr. Poliquin. Yes, I understand, sir. Congress, i.e. the
people's representatives, do not appropriate any money to CFPB.
You get your earnings from the Fed.
Mr. Mulvaney. Correct.
Mr. Poliquin. OK. And I remember when Ms. Yellen was here,
Chair Yellen was here about a year ago, Mr. Barr asked her
specifically, ``Do you oversee the budget at all of the CFPB,''
and she couldn't answer the question.
Mr. Mulvaney. I think the answer is no.
Mr. Poliquin. OK.
Mr. Mulvaney. The statute certainly does not provide for
any oversight by the Federal Reserve over the budget of the--
Mr. Poliquin. And you don't report to any board?
Mr. Mulvaney. No, sir.
Mr. Poliquin. OK.
Mr. Mulvaney. No, I don't report to anybody.
Mr. Poliquin. So we don't appropriate any money to you, you
don't report to any board. The head of the CFPB can be removed
for cause from--with the--by the President, but only for cause.
Correct?
Mr. Mulvaney. That is what the statute says. Yes, sir.
Mr. Poliquin. OK. Mr. Mulvaney, I remember--and we agree on
a lot of things here--I remember my time as State treasurer in
Maine, and we ran into a certain type of organization in the
affordable housing space called Maine State Housing Authority.
And as State treasurer, I was on that board, along with others.
I will never forget this as long as I live.
We had an executive director with a 5-year term appointed
by the Governor that could not be replaced, except for cause.
The individual did not report to any board, including the board
that I sat on, which was their board. She didn't report to us,
or he didn't report to us. And there was no appropriation of
State funds.
Now, what we found, lo and behold, was you had an
organization very similar to yours that you now head, and the
problem we had with Maine State Housing Authority was many, one
of which was they were spending about $300,000 of taxpayer
moneys for 1-bedroom apartments, when the average single family
home with 3 bedrooms, a bath-and-a-half on a quarter acre of
land was about 160 grand, and we had 6,000 people on a waiting
list to come in out of the cold.
So you are coming to us today and saying--thank goodness
you are there. You run an organization that is not accountable
to the American people, has no appropriation of funds, and you
can tell us to pound sand whenever we ask for something.
Correct?
Mr. Mulvaney. I believe that to be the case. Yes, sir.
Mr. Poliquin. OK. Now, Mr. Barr mentioned--
Mr. Mulvaney. If I want to spend $300,000 like that, I
probably could.
Mr. Poliquin. By the way, how are you doing with your
downtown office building? What have you folks spent on that so
far?
Mr. Mulvaney. $242 million.
Mr. Poliquin. Do you own the building?
Mr. Mulvaney. No.
Mr. Poliquin. OK. I remember myself asking that question of
the former director a couple years ago. That hasn't changed.
You finished the building yet?
Mr. Mulvaney. No.
Mr. Poliquin. OK. Wow. Do you have multiple offices, or is
this your only office, Mr. Mulvaney?
Mr. Mulvaney. We have two office buildings in this city,
and then we have regional offices in New York, Chicago, and San
Francisco.
Mr. Poliquin. Are you able, under statute, to consolidate
operations to save money?
Mr. Mulvaney. Yes.
Mr. Poliquin. Why don't you do that?
Mr. Mulvaney. We are exploring that possibility right now.
Mr. Poliquin. Got it.
Mr. Barr a short time ago mentioned that--and I will give
you the numbers here--in 2014 there were roughly 56,000 loans,
small-dollar loans, that were extended for folks that want to
buy manufactured housing. Two years later, there were about
36,000 loans that were extended for the small-dollar loans for
manufactured housing. That is a drop of about a third of the
number of loans extended to buy manufactured housing in an
economy that was improving.
Do you think that has anything to do with the enforcement
of the CFPB and scaring the daylights out of businesses,
meaning that we are not going to go as much by rulemaking,
which we make up as we go along, but instead, if we don't like
what we see, we will just threaten enforcement?
Mr. Mulvaney. I certainly think that we run the risk, when
we pass rules and regulations, of chilling the providing of
credit to consumers. Yes--
Mr. Poliquin. What is the one thing, Mr. Mulvaney, you can
come to us today and ask Congress to help you fix the mess you
have inherited?
Mr. Mulvaney. Put me on appropriations.
Mr. Poliquin. Meaning that the taxpayers will appropriate
money to you and then ask you questions about why and how you
are spending the money?
Mr. Mulvaney. It is sloppy, and we know it can be nasty,
and I recognize why it was done like this, but that is your
job. That is what you are supposed to be doing. You are
supposed to be spending taxpayer dollars--I cannot believe I
can walk down the street and get $700 million and not have to
explain to anybody. That is just wrong.
Mr. Poliquin. In January you released the fall of 2017
rulemaking agenda to the fall 2017 united--excuse me, unified
agenda of Federal regulatory--de-regulatory actions issued by
the Office of Information and Regulatory Affairs.
Mr. Mulvaney. Yes, sir. That is over at OMB.
Mr. Poliquin. Good. Among the key rulemaking initiatives is
one relating to overdraft services, which set out the
requirements for overdraft-related disclosures. Will this
overdraft be included in the spring rulemaking agenda?
Mr. Mulvaney. I have just been informed that our spring
agenda won't include that line item.
Mr. Poliquin. Will not include that?
Mr. Mulvaney. Correct. Yes, sir.
Mr. Poliquin. When you go down that path, Mr. Mulvaney, I
implore you to make sure you get voices from everybody. This is
incredibly important to our community banks and credit unions.
Mr. Mulvaney. Thank you, sir.
Mr. Poliquin. Thank you.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now declares a 5-minute recess.
[Recess.]
Chairman Hensarling. The committee will come to order. The
Chair now recognizes the gentleman from Georgia, Mr. Scott.
Mr. Scott. Thank you very much, Mr. Chairman, Mr. Mulvaney.
Good to have you back. Enjoyed working with you on the
committee, when we worked together. Over here.
Mr. Mulvaney, first of all, I want to point out that what
you see coming from our side of the aisle and our questions,
our concerns, they are not just ours. They are not just
Democratic concerns. These are concerns and worriations (sic)
of the American people. The whole business of your undermining
the Office of Fair Lending and Equal Opportunity, that is real,
Mr. Mulvaney. And something has to be done about it immediately
to correct it. That is what the American people feel.
The fact that you had two very vital important agencies--is
this Nation so weak in executive management leadership that we
have to have you over two critical agencies that handles--one
handles the budget and finances of the Federal Government, the
other protecting the financial transactions and activities of
the American people? Come on. Somebody is suffering there.
You are a very talented young man, but no matter--
Mr. Mulvaney. I am just glad to be described as young, Mr.
Scott.
Mr. Scott. These agencies are being disrespected, they are
being demeaned, the fact that they do not have a person at the
top of each of these agencies.
But then, on top of that, you are clearly out to destroy
the CFPB. And you really make no bones about it. There is a--
there--I don't like the CFPB. It turns up being a joke. And
that is what the CFPB really has been in a sick, sad way. And
some of us would like to get rid of it. That is what you said.
And that is wrong.
But here is the point. The point is that you are the prime
example of why we, when we passed Dodd-Frank, when we passed
the CFPB, we made it a commission for this very purpose. The
fact that you are in there with the mission from your President
to dismantle and destroy the CFPB--now, hey, I am not jumping
on you for doing what your boss wants to do.
All I am simply saying is that that is why we made it a
commission pointing out. And we have to come to Jesus on that
moment and understand going forward why it is important, why we
do not need to have the management and the protection of the
financial transactions of the American people changing every 4
years at the whim of the wind of changing Administrations. And
so I hope that we can get that.
But anyway, I wanted to get those points out so you
understand this is real serious here.
This is a--and let me tell you I represent Democrats and
Republicans. I have one of these huge crossover districts. I go
one county over from the Alabama line. So what I am trying to
tell you is this is a concern of the American people, and that
we have to deal with it.
But I do want to--I tell you what I am disappointed in more
than anything else is the fact that in your report you mention
nothing about your Operation Catalyst, this catalyst group that
you have that is designed to go in here and develop rules and
regulations for Fintech, our very innovative and new frontier
of working in the--combining our financial services with our
emerging and fast, rapidly changing technology. And you have
that.
Could you tell us--could you give us an update on this
catalyst project that you have there? The reason I want you to
do that is my staff and I, we are working on legislation--I am
the Democratic Chair of the Fintech Caucus--so we can bring
some harmonization. But tell us what you are doing with
Fintech, and tell us about this catalyst project.
Mr. Mulvaney. Thank you, Mr. Scott. Very briefly, just
because it is not in the quarterly report or semi-annual report
doesn't mean it is not a priority. When we wrote the semi-
annual report, what we did is we went to the statute that said
the semi-annual report should contain the following things, and
we followed the statute, and the Fintech catalyst is not part
of the statutory requirements. So that is why it is not in the
report. It doesn't mean it is not important to us. And it is.
I don't know if you remember this or not. I am actually the
co-founder of the Blockchain Caucus here in my time.
Mr. Scott. Yes, you were there, and that is why--
Mr. Mulvaney. So I am very interested in--
Mr. Scott. Yes, that is why I was surprised.
Mr. Mulvaney. We are spending a good bit of time trying to
figure out a way to create--it is called, for lack of a better
word, a Fintech sandbox, a new technology sandbox, to try and
figure out a way to allow these new industries to develop
without the type of regulation that stifles them, while still
protecting consumers at the same time.
It is a balancing act, but we do--it is a priority for us,
we are spending time on it--
Mr. Scott. Very good.
Mr. Mulvaney. --we have some really good people on it.
Mr. Scott. Well, I would like for you to have my staff,
or--my staff, who is helping to put this legislation together
to meet with yours.
But what about the no-action letters that are--do you
attend--
Mr. Mulvaney. We are--we continue to look at that as a
potential tool.
Mr. Scott. All right, thank you.
Chairman Hensarling. The time--
Mr. Scott. Thank you, Mr. Chairman.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Illinois, Mr.
Hultgren.
Mr. Hultgren. Thank you, Chairman.
Director Mulvaney, thank you. I am over here. Good to see
you. And grateful for your service. I really enjoyed serving
with you here, and grateful for the work that you are doing at
CFPB and OMB. I know it has just got to be a ton of work. I
can't imagine. But grateful for your willingness and the good
things that are happening.
And overwhelmingly, the response I am hearing from my
constituents is gratitude. A lot of my community banks, others,
really recognize the good work you are doing of bringing some
accountability to a Bureau that has been totally unaccountable.
So thank you for that.
Two specific things. I want to thank you for revisiting the
Home Mortgage Disclosure Act regulations. I agree with the
principle of reporting this information to fight against
discrimination in housing, but our rules should also recognize
the cost. In this case, potentially unnecessary and burdensome
reporting of information and also potential privacy issues if
this information were made public.
I also want to thank you for revisiting portions of the
pre-paid card rule, and extending the effective data. I believe
some regulation is appropriate, especially consumer-friendly
disclosures. But that doesn't mean we should have regulations
that preclude consumer-friendly financial products. So thank
you for your work, especially in those two.
I want to start off. Earlier you were being asked about
your enforcement posture, and you mentioned three buckets. You
didn't get--have a chance to finish. I wonder, in 30 seconds or
a minute, if you could clarify what is happening.
Mr. Mulvaney. Sure, real quickly. There is a transition,
there is a pipeline when it comes to enforcement actions,
which--we are running, at any particular time, about 100
investigations. And we maintain that, which means that roughly
two roll on, two roll off a week, on average, right? We
maintain about 100.
Chairman Hensarling. Director Mulvaney, could you pull the
microphone a little closer to you?
Mr. Mulvaney. Yes, sir. When the investigation turns up
wrongdoing that we believe rises to the level of having to move
to an enforcement action, then it moves into the bucket that we
call sue or settle, where we sit down with folks and say,
``Look, you have misbehaved, we think we have you,'' and we are
either going to file suit or you are going to settle and you
are going to pay us, just like you would in any particular
litigation. And if we are unable to resolve it there, then it
moves into litigation.
And the only thing that has been different or--the only
thing that has happened that seems to be noteworthy in my 5
months there is we just don't have anything move out of sue and
settle into the actual litigation.
Once there is a litigation we then pursue it to the end,
and those are the 25 ongoing pieces of legislation that we--
excuse me, of litigation that we continue to pursue under my
leadership.
Mr. Hultgren. Thank you. That is helpful. Let me move on to
some other questions.
You have spoken at length about the need for structural
reforms at the Bureau. I absolutely agree with you, especially
the focus on bringing CFPB under the appropriations process.
And with your semi-annual report you propose a lot of great
ideas, many of which we advocated together when we served
together on the Financial Services Committee.
There is one specific structural change that I am hoping
you might be able to speak to after having spent a few months
running the CFPB, and that would be a bipartisan commission to
oversee the agency. As I know you remember, Randy Neugebauer
had a bill calling for this, and Dennis Ross recently
introduced a bipartisan bill
Is it still your belief a commission structure for the CFPB
provides greater certainty to market participants and
consumers, and would it make the agency more technical and less
partisan in nature?
Mr. Mulvaney. It does. I still believe that, and I think I
was a cosponsor of that bill when I was here.
Mr. Hultgren. Yes, thank you. During your time on the
committee we spent a lot of time discussing issues with the
CFPB's Qualified Mortgage rule, and the Washington-centric
underwriting criteria prescribed for lenders. Ironically, the
rule provides special treatment for mortgages backed by Fannie
and Freddie, which arguably obstruct private capital from
entering the mortgage market by giving Government loans a
distinct regulatory advantage.
The so-called QM patch is set to expire on January 20,
2021. I wonder, do you plan to let the QM patch expire? If so,
have you thought at all about how to make sure that there is a
smooth transition for private capital to step up and fill the
void?
Mr. Mulvaney. Congressman, this falls into the same bucket
that I have--I mentioned a couple times on a couple of other
things. This is part of our statutory 5-year look-back, and we
are currently reviewing that, per the statute, collecting data,
and so forth. So it is not appropriate to--me to tell you where
I think it is going to go, because we don't look at that with a
pre-determined outcome, but we are reviewing those issues, and
the merits that you just raised will be considered.
Mr. Hultgren. Good. That is all we can ask.
Under the past leadership of CFPB one person was both the
student loan ombudsman and the head of this Office of Students.
The former is appointed by the Treasury Secretary and the
latter is hired by the CFPB director. In general, do you
believe it is important for an ombudsman to be impartial and
independent, and will you commit to separating these two
positions? I believe this will contribute to a more balanced
approach for regulating private lenders of student loans.
Mr. Mulvaney. I am not sure I am in a position to commit to
it, but I share some of the concerns, and we are currently
reviewing the role of that particular personnel.
Mr. Hultgren. Great. Last couple of seconds. In general, do
you believe the House could improve on S. 2155, the Senate
regulatory bill? I think we all believe it is full of a number
of important provisions, but do you believe there is an
opportunity for the House to improve it before it is sent to
the President's desk for--
Mr. Mulvaney. I do, and I look forward to talking about
that more perhaps later in the hearing.
Mr. Hultgren. Thank you very much. My time has expired, I
yield back.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentleman from Missouri, Mr. Cleaver,
Ranking Member of the Housing and Insurance Subcommittee.
Mr. Cleaver. Thank you, Mr. Chairman.
Mr. Mulvaney, thank you for being here. Can--do you have
any idea how long you are going to be director of OMB and the
head person over at the CFPB?
Mr. Mulvaney. Here is what I--the OMB position I will stay
as long as the President will have me. That is not a term-
limited type of position. So that is a separate question.
The CFPB, which I think is what most people ask me about,
here is what I know about that role, Mr. Cleaver, which is that
I am allowed under the Vacancies Act to stay for 6 months,
which I believe ends--expires June 22nd. And if the President
has not formally nominated somebody by that point, then I would
have to leave.
If, however, the President has formally nominated someone
prior to that date, then I am allowed to stay until such time
as that person is confirmed by the Senate.
So the bottom line is I don't know the answer to your
question. We tell folks, we plan--given how long it's taken the
Senate to take up confirmations, probably well into the fall or
the end of this year.
Mr. Cleaver. Yes, my guess is that there won't be a nominee
by June. And so I--
Mr. Mulvaney. Then I would have to leave on June 22nd.
Mr. Cleaver. Yes. But you can stay there until there is a
nominee.
Mr. Mulvaney. No, sir. If there's no nominee made, I must
vacate the office June 22nd.
Mr. Cleaver. OK. Because, a concern I had--and thank you
for the clarification. Because I do believe that Confucius,
about 25 centuries ago, said, ``The person who chases two
rabbits catches neither.'' And I believe that. And somebody
else said something, ``No one can have two masters.'' And I
believe that as well.
And in my real life, I'm a United Methodist pastor. And the
Catholic and Methodist churches actually have bishops who can
send them places, whether they want to go or not. And I would
never, ever become the head of the AAI, the American Atheist
Institute, because I just--I don't like what they do, what they
stand for. So I just wouldn't go. That just, that would be the
end. Because it would be difficult for me to go into a place
when I disagree with the premise of its existence.
So I'm trying to understand the complexity. You're a smart
person, and so I'm sure you've done the cerebral analysis of
this. So help me understand how you could accept going
someplace where you have a disdain for the existence of that
place.
Mr. Mulvaney. Sure. That's actually fairly easy. This is
how I explain it to people. It's my job. I'm a member of the
Executive branch of Government. I don't get to change the law.
My job is to enforce the law. The President has asked me to go
over and run the Bureau of Consumer Financial Protection. There
is a statute that says what it shall and shall not do, and I am
doing those things.
Mr. Cleaver. I know. But is there--you don't feel a
conflict that you're going to a place that you are completely
alien to its very being? You don't have any kind of internal
conflict to do that?
Mr. Mulvaney. In fact, I've never thought about this,
Congressman, but I guess I could make the argument that a
healthy skepticism might make me a better manager.
Mr. Cleaver. Well, I think we all--we have to have a
healthy skepticism about, I think, a lot. I think that helps
us, our humanity. But to get up every day and go to a place
that you wish did not exist seems to me would be some kind of
internal conflict that you that's not easy to resolve.
Mr. Mulvaney. That's a fair point. I want to make this
clear, I really enjoy the job. The people there have been
really, really good to work with. Yes, there's a small minority
of people who hate me and try and undermine my leadership. But
for the most part, some of the best quality bureaucratic work
that I have seen since I've been in the Administration comes
out of the Bureau. So no, I actually enjoy doing it. I just do
it differently than my predecessors.
Mr. Cleaver. Yes. My time is out. It would be a great
theological argument. Thank you.
Chairman Hensarling. Time of the gentleman has expired,
sir. Now, I recognize the gentleman from Colorado, Mr. Tipton.
Mr. Tipton. Thank you, Mr. Chairman. Thank you, Director,
for taking the time to be able to be here. I wanted to follow
up a little bit on my colleague, Mr. Hultgren's question in
regards to the Senate regulation bill. And you'd indicated that
you'd like to be able to point to some of the legislation that
we passed out in the House, how we might be able to improve
that to make sure that we're getting sensible regulations in
place. And would you like to address that?
Mr. Mulvaney. I'm a big fan of regular order, and the way
that I think it's supposed to work, or at least it used to work
when I watched it on television as a kid, was that the Senate
would pass a version of a bill. The House would pass a version
of a bill. And they'd try and work out the differences to see
if they could compromise. I think that is the best formula for
arriving at the best result.
I happen to like just about everything in the Senate bill.
I also recognize the fact it doesn't contain several dozen if
not more bills that have passed out of this chamber on a
bipartisan basis and the larger House chamber on a bipartisan
basis, which does make me wonder, why can't we add that to the
Senate bill?
There's some really good things, that y'all--and I was here
when you did some of it--worked together to try and improve
Dodd-Frank. And I think it makes complete sense to continue the
debate on whether or not that bipartisan support can translate
into bipartisan support across on the other side of the Hill.
So I applaud what the Senate has done. I know it's not easy to
pass a piece of bipartisan legislature anywhere, let alone in
the Senate. And I think they've done an excellent job. I don't
think that necessarily needs to be the end of the analysis.
And to the extent that y'all have done really good work to
find ways, on a bipartisan basis, to improve Dodd-Frank, God
bless you. And let's see if we can't add that to the Senate
bill. If not, the Senate bill is a great fall back. But if it
can get better, why wouldn't we accept that as a really good
outcome?
Mr. Tipton. And I appreciate that. So if we had a bill that
came out of this committee with unanimous support, unanimous
support on the House floor, you don't see that as a poison
pill?
Mr. Mulvaney. I know how hard it is to get unanimous
support in this chamber and on the House floor. So that means
that the bill might actually have a chance of passing in the
Senate. So I welcome any efforts to fix, to reform as much of
the Dodd-Frank, especially the parts that pertain to the
Bureau, as you possibly can.
Mr. Tipton. Right. Well, and when you're talking about
Dodd-Frank, I think one thing we've certainly heard from home,
particularly from our small community bankers, our small credit
unions, is the one-size-fits-all approach out of Dodd-Frank.
And you embrace, I assume, the ability to be able to tailor
those regulations to be able to meet the size of the
institution, the applicability of the issues they face?
Mr. Mulvaney. Yes. I spoke to a group of community bankers
just this week. And accepting for sake of the discussion that
the Bureau was created in order to prevent the next financial
crisis--we can have a really interesting conversation about
whether or not it could do that, whether or not it's the proper
role, but let's assume that for sake of this discussion. I
don't think anybody in this chamber would suggest that the
community banks or the credit unions were the cause of the
financial crisis and they should be treated the same as the
large financial institutions, which in many circumstances is
what we do, what Dodd-Frank does and what the Bureau does. And
I'm going to try really hard to try and fix that, to tailor
regulations to the size and the sophistication of the various
entities that we oversee, because I just think that makes
sense.
Mr. Tipton. Well, and I want to applaud that. I think that
that's a little change in direction from the previous director,
just to be able to apply the actual law. I think, could you
give a little more detail when you're talking about some of the
quantitative analysis that you're looking at, when you're
making some of your decisions? Maybe expand on that a bit for
us.
Mr. Mulvaney. No, I just want more data. I've read through
a copy of the cost-benefit analyses on a couple of the previous
rules that we put out, and I was just not--it would not have
met my test. And that's how I look at things, is that the
lawsuit we dismissed, OK, the only one by the way--the filter
that I ultimately came down to, there's a lot of factors that
went into it. But the ultimate filter was, would I have brought
that lawsuit if I were the director at the time it came time to
file. And that was the only one I said no to, and that's why we
dismissed. And I bring the same analysis to the cost-benefit
analysis that I see, which is, I look at the stuff and say, if
I had been the director, when this came across my desk, would
this have satisfied me to be sufficient to make a final
decision, the answer would have been no. And I want to do
better with that moving forward to where we get better and more
cost-benefit analysis before we make final determinations.
Mr. Tipton. Great. Thank you. And Mr. Chairman, I will
yield to you for any further questions you may have.
Chairman Hensarling. I thank the gentleman for yielding.
With respect, among other things, to the QM rule, the
University of Maryland researchers issued a paper last year
that said, quote, ``Dodd-Frank aimed at reducing mortgage fees
and abuses against vulnerable borrowers. The lending
regulations of Dodd-Frank actually triggered a substantial
redistribution of credit from the middle class households to
wealthy households.''
Under section 1022 of the Dodd-Frank Act, with respect to
the CFPB, it says, ``In prescribing the rule under the Federal
consumer financial laws, the Bureau shall consider the
potential benefits and costs to consumers and covered persons,
including the potential reduction of access by consumers to
consumer financial products or services resulting from such
rule.''
Let's see. We are well over time. But perhaps one of the
other individuals on our side of the aisle could let you
address that issue.
Chairman Hensarling. The Chairman now recognizes the
gentleman from Minnesota, Mr. Ellison.
Mr. Ellison. Thank you, Mr. Chairman. Welcome to the
Committee, Mr. Mulvaney.
Mr. Mulvaney. Mr. Ellison, it's good to be back.
Mr. Ellison. You know what the Doctrine of Absurdity is in
statutory construction?
Mr. Mulvaney. I'm sorry--
Mr. Ellison. Remember law school?
Mr. Mulvaney. --it's been a long time.
Mr. Ellison. Yes.
Mr. Mulvaney. So help me on that one.
Mr. Ellison. So you started out by saying that under the
law you could just come in here and sit there.
Mr. Mulvaney. I think that's one interpretation. Yes, sir.
Mr. Ellison. Right. Well, under the law of statutory
interpretation, which I know you know, if an interpretation
would lead to an absurd result, then you don't apply it that
way. And you sitting there playing Candy Crush, as the Chairman
has pointed out, or twiddling your thumbs, as you pointed out,
that would be an absurd result. So anyway, we start out with
that. Let me ask you.
Mr. Mulvaney. And I hope--
Mr. Ellison. Let me ask you a question. When you got to the
CFPB, was the glass clear in your office?
Mr. Mulvaney. Yes, sir.
Mr. Ellison. Is it frosted now?
Mr. Mulvaney. Part of it is.
Mr. Ellison. Is that your office up there on the screen?
Mr. Mulvaney. Yes, sir.
Mr. Ellison. So when somebody walks by your office, they
are obscured from seeing what you're doing? Yes, they are.
Mr. Mulvaney. Yes. I'm sorry--
Mr. Ellison. That's the whole point, right?
Mr. Mulvaney. Yes, no, it is the point, yes.
Mr. Ellison. That would be the point. And yet you are the
champion of transparency, right? You're the one who's saying
that you're the transparency champion. You said, ``We're going
to spend a little bit more time on things like accountability
and transparency.'' You said that, right?
You said a lot of things to that effect. I think one of the
things you said as well is to various agencies, various
speeches you've given. Even today you talked about
transparency. And yet you have obscured yourself physically.
And I find that to be ironic, sir. And it just occurs to me
that as we're talking about transparency and all that, and how
we have to be more accountable, and yet you're obscuring
yourself. Well, you also got your own VPN, right?
Mr. Mulvaney. My own what?
Mr. Ellison. VPN.
Mr. Mulvaney. I don't think so. Did I?
Mr. Ellison. OK. Now, I don't know. Maybe we'll see. I
guess the reporter out there will look into it. But my point is
that--
Mr. Mulvaney. I'm on the same email system, I think, but my
email address is @CFPB, so I think--
Mr. Ellison. You know what--
Mr. Mulvaney. --they're the same system.
Mr. Ellison. --the point is though, is that as you are
describing how everyone else needs to be transparent, you are
literally making it more difficult for yourself to be seen.
Mr. Mulvaney. All right, Mr.--
Mr. Ellison. I think it's legitimate to raise this issue.
Mr. Mulvaney. How many times have you seen a witness
actually answer yes or no questions in this room? And I did it
to Ms. Velazquez for 10 minutes.
Mr. Ellison. No, no, no. And let me tell you this. I've
seen you--I've seen you really make yourself out to be some
champion of transparency as you are obscuring yourself
simultaneously. I think that's ironic. How much did it cost for
you--
Mr. Mulvaney. Do you believe in transparency?
Mr. Ellison. How much did it cost for you to put the
frosting up there?
Mr. Mulvaney. Thirteen offices were frosted, for a total of
$3,500. And I've just been informed, by the way, this was the
original plan, under Mr. Cordray's design, for this office.
Mr. Ellison. Yes, yes. And yet you're the one who did it,
not Mr. Cordray.
Mr. Mulvaney. Do you believe in transparency?
Mr. Ellison. And he'd been there for quite a while.
Mr. Mulvaney. How transparent is your door on your office,
Mr. Ellison?
Mr. Ellison. You know what, I'm not a witness today. You
are. Now, you're the witness.
Mr. Mulvaney. I've been to your office. I can't see into
it.
Mr. Ellison. No, wait a minute. You are--
Mr. Mulvaney. You believe in transparency, don't you? I
know that you do.
Mr. Ellison. No, you're the one--it's my--I'm reclaiming my
time. You're the one who's offering yourself as some champion
of transparency. This is your reason for being over there at
the office that you shouldn't even hold right now. And the
office that you hold, the public can't see it. Even your staff
cannot see it. Who knows what you're even doing in that room
right there. How many days a week are you at the CFPB?
Mr. Mulvaney. Generally, we try to shoot for Tuesdays,
Thursdays, Saturdays. The way it's worked out, Congressman, is
that I'm there just about every day for a period of time, and
across the street about every day for a period of time. It's
not been nearly as cut and dry as I'd hoped that it would be.
Mr. Ellison. Right. And let me ask you this as well. Are
you, you may have meetings in your particular office with your
staff?
Mr. Mulvaney. I do. I do. I also have meetings in the
conference room, which is to the left of that photo, which is
not frosted.
Mr. Ellison. Yes. So given the nature--given the decoration
changes that you've made, I think it's pretty clear that you're
not applying the same rules to yourself as you are to the
agency that you hope to represent. I think that's too bad. And
I'll yield back.
Chairman Hensarling. Thank you, sir. The gentleman yields
back. The Chair now recognizes the gentlelady from Utah, Ms.
Love.
Ms. Love. Thank you so much. It's great to see you,
Director Mulvaney, and I appreciate your candid questions and
answers to those questions. I really--it's refreshing to be
quite frank. As you know, on this committee, we get a lot of
information. We know at least a week in advance when somebody's
going to be coming in and when we're going to be doing these
hearings. And we get a book that talks about what's been
happening in your reports. And I put the book aside and went to
my district, and I spoke to some of the small banks in my
district.
I had a roundtable. Went around. Because I knew I was going
to have this meeting with you. Instead of asking some of the
questions that may be in here, I literally gave them the
ability to ask you these questions. So one of the issues that
they wanted me to talk to you about is the fact that they are
willing and interested in making small-dollar loans. And I
wanted to know, and they wanted to know, what your initiatives
are in respect to small-dollar loans and payday lending and
what the end result is that you're hoping to achieve.
Mr. Mulvaney. Congresswoman, I have to get into more detail
on small dollar across the board. The first thing that comes to
mind is, we're revisiting the payday rule, which is often a
small dollar rule. But I'd have to get you more specifics on
what we're doing across the board on small-dollar, because
that's more than just payday.
Ms. Love. Right. So they--like I said, they were interested
in making sure that they had the ability to do these small
dollar loans.
Mr. Mulvaney. Exactly. And I--
Ms. Love. And I think the more options, obviously, the
better.
Mr. Mulvaney. It's a shame that Ms. Velazquez is not here,
because when I was on the Small Business Committee, when I
first got here, she and I were Chair and Ranking Member of one
of the subcommittees on small business and actually did a field
hearing on just that, micro lending to small business. So we
know it's important. We know it's got bipartisan support. And
to the extent we can help you folks make that more readily
available, we'd look forward to doing that.
Ms. Love. OK, great. The other question that they wanted to
me ask you is this. How powerful are you?
Mr. Mulvaney. Too powerful.
Ms. Love. Too powerful. If someone had an issue--if a small
bank, for instance--say the Bureau was going after a small bank
for some issue.
Mr. Mulvaney. Right.
Ms. Love. Who do they go to for protection?
Mr. Mulvaney. Nobody.
Ms. Love. Who are you accountable to?
Mr. Mulvaney. Nobody. I could make the decision to bring
the lawsuit. I could make the decision not to bring the
lawsuit. I could make the decision to--
Ms. Love. If you go and send a handwritten note to ask the
Federal Reserve for $700 million, are they required to give
that to you?
Mr. Mulvaney. Yes, on October 1st, they--
Ms. Love. Do they--can they ask you questions about what
that's needed for?
Mr. Mulvaney. I don't think so. The statute doesn't say
that they can.
Ms. Love. Do you have a statute that explains exactly how
you are to spend and if you are to spend that $700 million?
Mr. Mulvaney. Oh, it just says ``in the operation of the
Bureau.''
Ms. Love. Here's the problem that we have. I think the
American people and Members of Congress have false choices
here. The problem that we have is, depending on who's in that
seat, one side or the other is going to be frustrated, which
means that the American public is going to be frustrated, which
tells me that there's a problem with how this was set up. Can
you imagine if we actually had a Bureau that worked well and
worked well for people?
Mr. Mulvaney. Look at it this way, Congresswoman. You don't
get the same sense of frustration about the SEC (U.S.
Securities and Exchange Commission) or the FDIC or the FSOC.
You might have some complaints about it, but it doesn't rise to
the same level as this. We are not the same as the other
financial regulators. We need to have a more down-the-middle
approach so that we are taken seriously as regulators and we're
not perceived as being the brainchild of one particular
ideologue. And that's one of my biggest frustrations with this
as an institution is that we do not have the same credibility
as those other regulators do, and I hope that we can work to
get to that, so that we're no longer perceived as that, which
is either you love us or you hate us. We just want to be good
bureaucrats and implement the law. That's what I'm hoping to do
with the Bureau.
Ms. Love. And let me tell you who else wants you to be that
way too, the people who go to these small banks. The people
that have lost their ability to be able to get the resources
that they need for their communities. And I know this because I
was the mayor of one of those small cities that are in--that
these banks are in, and that serve that community. And I have
to say that these policies make this position more political
than policy oriented. And I think that that's the problem that
we have. Both sides of the aisle will continue to be frustrated
and the American public will not be given the ability to be
protected, actually get protected, if these statutes and these
policies remain the same. So I'm hoping that we can at least do
one thing, put this Bureau on appropriations. And I think that
that will solve quite a few problems. I yield back.
Chairman Hensarling. Time of the gentlelady has expired.
The Chair now recognizes the gentleman from Texas, Mr. Green,
Ranking Member of our Oversight and Investigations
Subcommittee.
Mr. Green. Thank you, Mr. Chairman. I thank the Ranking
Member as well. I thank the witness for appearing. And to be
quite candid with you, I have some degree of appreciation for
your candor, because it makes it clear to me where you are. So
let's you and I be candid with each other. I am a person who
has seen the world from the bottom up. I know what invidious
discrimination is like. I've had to sit in the back of the bus.
I have consumed from the colored water fountain. I have had to
go to back doors. So I'm very much interested in invidious
discrimination and the elimination thereof. And as a result, I
want to talk to you about testing. My assumption is that you're
aware of the testing process. And if you're not, I'll give a
brief explanation. Are you aware of the testing process?
Mr. Mulvaney. I may know it by another name.
Mr. Green. Well, testing is the means by which we can send
persons into a facility. Three people. Two may be African
Americans, or one African American, two Anglos. And see if
they're treated similarly, see if they're treated the same.
It's called testing. Banks in the main do not favor testing. As
a matter of fact, the laws are written such that it is very
difficult to accomplish testing.
Testing is the means by which we can acquire the empirical
evidence to prove that discrimination exists. So my question to
you is, do you support testing in banks to determine whether or
not there is discrimination?
Mr. Mulvaney. Thank you, Congressman, for bringing it to my
attention. I wasn't familiar with it, but I've just been
informed that we've done it in the past. We continue to do it.
And I have no reason to think we would change it.
Mr. Green. You would support testing to make sure--
Mr. Mulvaney. We do it as part, right now, of our--
Mr. Green. I believe you do it now. I believe you do it
now. But I'm asking you to just go on record saying you will
support testing to acquire--
Mr. Mulvaney. I see no reason to change the policy,
Congressman. And by the way--and I don't want to cut you off,
but there was--
Mr. Green. I'll allow you to.
Mr. Mulvaney. Someone asked a question before about the
annual report. I wanted to point out that we specifically
mentioned our role in preventing and rooting out
discrimination, in the semi-annual report that we just sent to
you. Someone had asked me if it was in there, and I didn't get
a chance to respond to that. So we do take that seriously, and
seriously enough to put in our semi-annual report.
Mr. Green. Well, here's what I will do. Many times when I
have persons who equivocate I have to resort to this. Am I
correct--
Mr. Mulvaney. Did I just equivocate?
Mr. Green. You did.
Mr. Mulvaney. OK.
Mr. Green. Am I correct in assuming that your testimony is
as follows, that you will continue to test banks to determine
whether or not invidious discrimination exists?
Mr. Mulvaney. And I'm telling you yes, I have no reason to
change the--
Mr. Green. That is sufficient for me. No, I appreciate your
answer of yes. That means something to me. And I appreciate
your being candid. Now--
Mr. Mulvaney. Let me ask you this, Congressman.
Mr. Green. Sure.
Mr. Mulvaney. Is it an effective tool? Because I'm not that
familiar with it.
Mr. Green. Is it an effective tool?
Mr. Mulvaney. Yes, sir.
Mr. Green. Absolutely, it is. It's used in housing. It is
the most efficacious methodology available to us. There is
nothing that I know of that's better. And I would challenge
anyone who would just dare to engage in a colloquy with me
right now to, let's talk about something that's better than
testing. Other than a person confessing. And that rarely
happens. So yes, it's very, very much effective.
And by the way, notwithstanding its effectiveness, this
committee has fought allowing it to continue and be expanded
into certain areas. The committee has. No disrespect to anybody
on the committee. But that is the case.
Because I remember trying to get some legislation to move
forward that included testing, and there were all kinds of
contingents about how it would not work and why it would not
work. But I'm bringing it to your attention because the
gentleman that is with you--and I appreciate you referring to
persons who are with you for assistance, I would do the same
thing--Mr. Carson unfortunately would not--the testing is
something that makes a difference for people who have been
denied access to capital.
And it is access to capital that makes a difference in the
lives of people. And believe it or not, and I believe you do--
discrimination exists in banking. Do you agree?
Mr. Mulvaney. I believe there are bad actors. I do, sir.
Mr. Green. OK. Thank you, Mr. Chairman.
Chairman Hensarling. The time on the gentleman has expired.
The Chair now recognizes the gentlelady from Missouri, Mrs.
Wagner, Chairman of the Oversight and Investigations
Subcommittee.
Mrs. Wagner. Thank you, Mr. Chairman. And welcome back,
Acting Director Mulvaney. I have long been interested in
understanding the decisionmaking surrounding the Bureau's
headquarters renovation. Under your predecessor, I didn't,
let's say, get meaningful answers to simple questions on the
topic. And unfortunately the committee is still in the process
of investigating whether its oversight on this topic was indeed
obstructed. My understanding is that the Bureau's current
calculation is that it will spend all $242.8 million renovating
the building to a Class A luxury office space. Now, a building
that it doesn't even own, it rents, I believe, Acting Director.
Mr. Mulvaney. That's correct.
Mrs. Wagner. I understand that some improvements to the
building may have been needed, but can you explain to me,
briefly, because I have several other questions, why it was
necessary to spend a quarter of a billion dollars on luxury
offices for the CFPB?
Mr. Mulvaney. It's a real short answer, because I don't
know.
Mrs. Wagner. Stunning. Let me unpack this just a little
bit. Acting Director, as you know, Members of the committee
have long sought to understand who made the initial decision to
renovate the headquarters building. And the committee
repeatedly requested, and I did also, requested records
relating to this issue. But then Director Cordray repeatedly,
and I quote indicated that he, ``did not know the identity of
the individual who made the initial renovation decision.'' Is
that correct?
Mr. Mulvaney. I'm sorry, could you repeat the question?
Someone was--
Mrs. Wagner. We've sought for some time to understand who
made the initial decisions to renovate. And then it was
Director Cordray at the time who repeatedly said that he didn't
know the identity of the individual who made the initial
decision; is that right?
Mr. Mulvaney. I do believe that's--I was in this committee,
and I think I asked similar questions of Mr. Cordray and got
similar answers.
Mrs. Wagner. So that's right. Now it's my understanding
that we know from the Inspector General that the decision to
renovate was made after January 21, 2011. And we know the
decision was publicly announced on February 18, 2011. So it
stands to reason that the initial decision to renovate was made
during that 28-day timeframe, is that correct?
Mr. Mulvaney. Again, that's an assumption you can draw from
IG's report, yes, ma'am.
Mrs. Wagner. Now, in response to a recent letter about the
building, you undertook a supplemental records search, and I
thank you for that, and have sent us a supplemental records
production, under a detailed cover letter, which I now ask, Mr.
Chairman, be placed in the record, with appropriate redactions
to protect personal information.
Chairman Hensarling. Without objection.
Mrs. Wagner. Now, this production contains records that I
am shocked were not previously produced. It contains a January
24, 2011 Decision Memorandum and Information Memorandum that
appears to have been placed in Elizabeth Warren's briefing book
for a staffing meeting. Now, I remind you that she served as
assistant to the President and Special Advisor to the Secretary
of the Treasury on the Bureau at the time. They recommend in
this briefing book that she approve entering into contracts for
design work to prepare for renovations to the headquarters
building. The production also contains staff communications and
calendars that circumstantially indicate that Ms. Warren
approved this recommendation. Do I have that right, Acting
Director Mulvaney?
Mr. Mulvaney. I think that's certainly a conclusion you can
draw from those materials, yes, ma'am.
Mrs. Wagner. Were the Memorandums to Ms. Warren located in
some hard to search location?
Mr. Mulvaney. It was not.
Mrs. Wagner. Were these Memorandums ever subsequently
circulated within the Bureau?
Mr. Mulvaney. That I don't know. All I know is that we
found them. We thought that they were responsive to the
previous request. And we've disclosed them.
Mrs. Wagner. Where were they?
Mr. Mulvaney. They were in the director's file.
Mrs. Wagner. The director's--
Mr. Mulvaney. The office of the director's file, I think.
Mrs. Wagner. Office of the director's file.
Mr. Mulvaney. Yes. You want to ask me if that would have
been--
Mrs. Wagner. So this committee--
Mr. Mulvaney. --if that would have been the first place I
would have looked for stuff? Yes.
Mrs. Wagner. This committee asked repeatedly. We have
oversight and investigation responsibilities. $242 million, a
quarter of a billion dollars spent on luxury renovations on a
building we don't even own, the Bureau rents. We asked
repeatedly for 6 solid years, and we find out that they're in
the Director's office file. Mr. Chairman, I have further
questions about these records that were not previously produced
or referenced, and about the issue revealed by these records. I
trust that the Bureau will cooperate with any future committee
oversight on this topic, sir?
Mr. Mulvaney. Absolutely.
Mrs. Wagner. I thank you. Mr. Chairman, my time has
expired. I yield back.
Chairman Hensarling. The time of the gentlelady has
expired, and the Chair now recognizes the gentleman from
Maryland, Mr. Delaney.
Mr. Delaney. Thank you, Mr. Chairman. Mr. Mulvaney, it is
nice to see you back here.
You have probably gotten a lot of detailed questions about
what is going on at the CFPB, so I wanted to more focus on how
you think about it because we are often confronted with a lot
of false choices here in Congress, as you well know, having
served here. We either have to completely repeal Dodd-Frank and
every aspect of it, or we have to defend every single word of
it.
Same thing with the Consumer Finance Protection Bureau. It
either has to be repealed or eliminated, as you have advocated
for in the past, or every single word of the statute that
creates it is perfect.
So have you thought about approaching this in a way where
you actually come out very strongly supporting the Consumer
Financial Protection Bureau, saying you believe in its mission
and it is an important institution, and you hope it endures
across the long term; however, to over-compensate for some of
the comments you have made in the past that obviously make
people suspicious about your intentions with respect to this
agency, but at the same time you put forth a list of very
constructive improvements you would like to make? Have you
thought about approaching this that way?
Because maybe I have missed it, but I have not heard you
come out strongly in support of both the mission and the
importance of the institution across the long term, and that
you will not do anything to undermine its existence or its
ability to function, both in the short term and long term;
however, you do see some reforms that need to be made?
Mr. Mulvaney. Yes. I hope that is what you would take away
from the recommendations, which is the recommendations are not
that we repeal Dodd-Frank. y'all want to do that, that is your
prerogative. Right? I am a bureaucrat. I am a member of the
Executive branch. I am working at the Bureau. The Bureau shall
exist. I cannot change that. So if it is going to exist, this
is what could be done to improve it. And that is what I have
tried to do.
As to sending the larger message about whether or not I--
how I feel about it, I have always been a strong believer,
especially in what we do for a living, or what I used to do for
a living when I sat out there, which is look at what folks do
more than what they say. I have not blown the place up.
Mr. Delaney. But sometimes what you say matters because--
Mr. Mulvaney. It does.
Mr. Delaney. --the tone at the top is actually really
important in any organization.
Mr. Mulvaney. I absolutely agree.
Mr. Delaney. And other than in your prior life here sitting
among 435, that is one thing. But now you are in a leadership
position in the White House.
Mr. Mulvaney. Right.
Mr. Delaney. You are obviously getting an expanded
portfolio. And what is so--if you were to say here, for
example, and I would like to hear you say this if you agree
with it, that you support the mission of the Consumer Financial
Protection Bureau, and you would like to see it endure and
exist across the long term.
Mr. Mulvaney. I support consumer financial protection. And
let me tell you what I have told the people--
Mr. Delaney. But that is--
Mr. Mulvaney. Let me tell you what I have told the people
who work there, and you can draw your own conclusions, which is
that I said, ``Look. This is a brand-new agency. OK? And right
now this agency is associated with one person. And you cannot
be taken seriously as a regulator if you are the brainchild or
baby of one particular person on one side of the aisle. And if
you want to be taken seriously as a regulator, you have to be
able to be more than that.''
This is the very first transition that the Bureau has ever
gone through. OK? From one party to another. And they have to
learn how to do that if they are going to be taken seriously.
Rather than--
Mr. Delaney. But can you--reclaiming my time.
Mr. Mulvaney. Yes, sir. Yes.
Mr. Delaney. Rather than supporting consumer finance
protections generally, which is what I heard you say just then,
do you support the existence of the Consumer Financial
Protection Bureau as an enduring part of our Government looking
out for the best interests of consumers, being funded by the
Federal Reserve, but with some reforms to make it more
accountable, more transparent and maybe--
Mr. Mulvaney. I absolutely think there are better ways to
protect consumers than we are doing today. I recognize the fact
that there is and can be a role for the Federal Government in
protecting consumers. This is especially true when you are
dealing with Federal financial institutions. It would seem to
fall to the Federal Government to oversee them.
Mr. Delaney. So I am interpreting your answer,
respectfully, to say that you cannot say you support the
existence of this Bureau across the long term. But you support
the concept of consumer financial protection.
Mr. Mulvaney. I think that is what I--
Mr. Delaney. Very quickly, one of the concepts I have put
forth is the notion of a nonprofit bank to serve distressed
communities. Banks are not allowed to be nonprofit right now.
Mr. Mulvaney. Yes. I am not--
Mr. Delaney. And it seems to me that if you could allow a
nonprofit bank so that it could raise philanthropic dollars to
support its mission, it could actually be a positive force in
some of these communities.
While that is not specifically under your purview, do you
support a concept like that?
Mr. Mulvaney. Would the not-for-profit be a Government
institution or a--
Mr. Delaney. No. It would be a nonprofit like anything
else.
Mr. Mulvaney. What you do with your money is your business.
Mr. Delaney. So you would support regulatory changes to
allow nonprofit banks?
Mr. Mulvaney. I would be happy to take a look at it. But
again, what I am faced with is--
Mr. Delaney. This is an enterprise that could actually be
the kind of thing we need to help consumers in some of these
markets because it would have a double bottom line, self-
sustainability but also a mission.
Mr. Mulvaney. If you want to--if you want to lend money to
people and take a lower-than-market rate of interest, that is
your business.
Mr. Delaney. Thank you.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Arkansas, Mr.
Hill.
Mr. Hill. I thank the Chairman. I appreciate the hearing.
It is good to have Director Mulvaney before us today, and I
appreciate his public service. It is a 7-day-a-week job just to
be one of your jobs, so we appreciate the sacrifice from your
family, stepping away from the house.
Mr. Mulvaney. It keeps me off the street. The triplets are
teenagers now; they do not care to see me, anyway.
Mr. Hill. A fair point. I will not go there.
But I do want to visit about TILA-RESPA (Truth in Lending
Act-Real Estate Settlement Procedures Act). This is something
you know I have had a keen interest in since I came to Congress
after 3 decades in the industry. And Mrs. Warren, when she was
making the rounds before the formation of the agency you are
the acting director of, she said, ``Well, one of the key things
we are going to do is make forms simpler for consumers and
simpler for banks.'' That was a goal of the agency, at that
time unnamed, I guess, the Consumer Bureau.
Mr. Mulvaney. How did we do on that?
Mr. Hill. Well, the exhibit A for that was a merger of the
truth-in-lending statement and the real estate settlement
statement. We are going to make it one form. It is going to be
simpler. Consumers are going to be benefited by faster closing,
lower costs. It is going to be easier for community
institutions to loan them mortgage money. And I would argue, 8
years later, that that is not the case, Director Mulvaney, and
it has been made worse by the rulemakings by your Bureau.
This merger is called TRID (TILA-RESPA Integrated
Disclosure). It cost the agency $1.5 billion in trying to get
computer programs to work. It still does not work. I still have
complaints about it, extending mortgage closing, raising the
cost of mortgages. And one thing I have heard time and time
again, and Director Cordray and I have had candid conversations
about this, why can't the agency issue legally binding guidance
to mortgage originators that they can interpret this rule, and
title companies, safely and be held safe from prosecution or
from action of the Bureau's investigation? That passed the
House overwhelmingly.
And I asked Director Cordray, who was generally supportive
of that, ``Why don't you do no-action letters, like we have at
the IRS or at the sector, where a lawyer can write you and say,
if we do X and Y about a closing related to the TILA-RESPA
form, that they have certainty, legal certainty.''
Do you support the concept of no-action letters as
guidance?
Mr. Mulvaney. I will say this. We have--I certainly believe
that is within our authority to do exactly that. Toward that
end, we have made what is called a request for information on
TILA-RESPA, on TRID, to try and get the type of input that you
have just suggested because I do believe that is within our
authority to do, and that it can bring clarity to the law and
to the regulations in a way that would be beneficial to both
financial services providers and consumers.
Mr. Hill. We want to lower these costs. We do want it
simpler, and it is not.
Mr. Mulvaney. I used to--
Mr. Hill. And we want it less costly, and what the Bureau
has done for all these years is offer webinars that are
confusing, hard to find, not informative, and unhelpful to
market participants. So I hope you will consider this as an
official comment.
Mr. Mulvaney. Just by pure coincidence, we are also
reviewing our webinar process as well.
Mr. Hill. Good luck with that if you can find it on your
website.
Let me change subjects to data breaches. I noted in some of
the material in this hearing that the Bureau has 233 confirmed
breaches of consumers' personally identifiable information
(PII) within the Bureau, and that in the consumer response,
another 840 suspected PII breaches by financial institutions
using your portal, and that you have investigated that.
Do you support a data security breach notification? If Mr.
Luetkemeyer's bill is made law, do you support a breach
notification standard?
Mr. Mulvaney. I think it is a good practice.
Mr. Hill. And what have you done specifically to protect
our consumers' information?
Mr. Mulvaney. A couple different things. This has gotten a
little bit of attention, and I think it was--a lot of it was
inaccurate. We immediately stopped data collection once I took
over, once I was assigned to the office, for the purpose of
analyzing our data security.
We have made certain accommodations within the enforcement
areas to allow data collection to continue. For example, we
will use other agencies' systems and so forth. We will collect
data onsite but not offsite. I am--the rule is this: I am not
going to hold somebody to a higher standard than we are willing
to hold ourselves, and I am not satisfied with our data
security right now at the Bureau.
Mr. Hill. Well, I appreciate that. It is an important area.
I want to be on record supportive of your four ideas for
improvement in the agency: Putting it on appropriations, and
having an IG. And I would also encourage you, on behalf of the
people you oversee, to have an ombudsman so that someone you
regulate can have someone to call besides your office and have
guidance on whether they have done right or wrong.
Thank you. I yield back.
Mr. Mulvaney. Thank you, sir.
Chairman Hensarling. At this point the gentleman has
expired.
For what purpose does the Ranking Member seek recognition?
Ms. Waters. Mr. Chairman, pursuant to Clause (d)(4) of
Committee Rule 3, I request that the gentlelady from Ohio be
recognized to question the witness for an additional 5 minutes
upon the conclusion of the time allotted under the 5-minute
rule.
Chairman Hensarling. Pursuant to Clause (d)(4) of Committee
Rule 3, the Chair recognizes the gentlelady from Ohio for a
total of 10 minutes.
Mrs. Beatty. Thank you, Mr. Chairman and Ranking Member.
And to our witness today, Mr. Mulvaney, thank you for being
here today.
Today is a meeting that is heavy on my heart. April should
be an exciting time for me as we celebrate the 50th anniversary
of the Fair Jobs Act, led by then-Martin Luther King. And
people embraced, and President Johnson signed it because of
much of the unrest and discriminatory practices and consumers
being mistreated. So I echo the comments of my colleagues
before me. But you are here, so I am going to ask you the
questions.
It has clearly been established that you have two full-time
jobs. In my world, to have two full-time jobs, one that you
found was a joke and the other one you wished it did not exist,
and to get paid for doing a full-time job that it is impossible
to do two full-time jobs in the world that we live in and for
the type of work that is expected, not only by our consumers
but by your colleagues on both sides, I think that is the
reason why we cannot work being two full-time jobs, being paid
at those salaries.
But with that said, you have brought some people with you
today. Are these part of your top staff team--
Mr. Mulvaney. Yes, ma'am.
Mrs. Beatty. --that is here? Do you have any African
Americans in top positions?
Mr. Mulvaney. No, ma'am.
Mrs. Beatty. That is a problem, and that is a problem for
me. Do you know what section 342 is of the Dodd-Frank Act?
Mr. Mulvaney. No, ma'am. I do not know it by heart.
Mrs. Beatty. That is even great--you are going to sit here
and tell me that you came before this committee, and you sat
here on this committee, and you know that for the 6 years I
have been here, the question that I have asked of every single
person coming here--I have asked them about OMWI and section
342. You are the only one to say that you had no knowledge of
what it is, and you were a former Member of Congress. I find
that appalling, insulting, and unacceptable.
Now, tell me what you are going to do about not
understanding what 342 is?
Mr. Mulvaney. I know what the OMWI is, ma'am. It is just I
did not recognize it as section 342. We do have an Office of
Minority and Women Inclusion.
Mrs. Beatty. So if you know what OMWI is, explain to me--
you just told us that you have 300--or your staff informed you
since you wanted to bring it to our attention--that there were
370 high-paid people. How many women are in those high-paid
positions? How many African Americans and Hispanics are in
those high-paid positions?
Mr. Mulvaney. I have that breakdown for you, ma'am, if you
want to give me a chance to get it to you. I have the breakdown
by race. I have the breakdown by gender in terms of who makes
what at the agency--at the Bureau.
Mrs. Beatty. Well, I would definitely like it.
Mr. Mulvaney. By the way, and to your opening point, you
know that I only get paid one paycheck. Right?
Mrs. Beatty. I do.
Mr. Mulvaney. You seemed to imply that I was taking two,
and I am not. I have only--I only get paid my OMB salary. I do
not get paid an additional salary.
Mrs. Beatty. And I fully understand that. I guess the
question is, I do not know how you get paid for a full-time job
when you have two full-time jobs. I find it hard to believe
that for the two types of jobs that you have, that you would be
able to do due diligence in full-time on either one of them.
So you get paid a full-time salary for doing 50 percent, if
that, on each of the jobs. And I am just saying, consumers
would love to have a job where they could only work half-time
and be paid full-time.
Mr. Mulvaney. Actually, I would suggest to you that I work
more than 100 percent of the time. But that is fine.
Mrs. Beatty. Well, let me just also move on and say--
Mr. Mulvaney. In theory, I would only have to--
Mrs. Beatty. --and say earlier, as my colleagues wanted
to--we get into this comparison thing. We come here, and
whether it is Rich Cordray as the former, or whether it is
spending time, if it is President Obama, and as my colleague's
open--and one of my colleagues in their opening remarks started
talking about the former director, Director Cordray from my
home town running the clock out, well, I think it is good to
run the clock out when you have substantive things to say, and
you have facts and answers.
So maybe when you do not run the clock out, it is because
you do not have a lot to say or you do not have a lot of
knowledge to say about it. So I guess I would like to ask you,
what is the number one thing that you are going to do to change
to help consumers? You have not filed cases. We know what we
have heard in the past, being able to put billions of dollars
and returning to some 12 million consumers.
So what is it, very quickly, that you are going to be able
to do that I can go back home and say to my constituents who
are confronted with the high loans of payday lenders, that I
can go back and say to my minority communities that somebody is
fighting for you? How do I tell them that when you do not have
people who look like me in high positions, you do not readily
know what those numbers are for women?
We know right now that women in general and women of color
make lesser on the dollar than our white male counterparts. You
know that we have a Ranking Member who has worked tirelessly in
her entire career fighting for the underdog and the consumers.
And you come here absent of that and absent of readily having
answers?
Mr. Mulvaney. No, ma'am. Not at all. In fact, I think I
got--I think I have tried to answer every one of your
questions, and you have raised a couple different things.
The senior career staff does include African Americans and
women. We will continue to do what the Bureau has done in the
past, which is to enforce the 18--18 consumer financial
protection acts that we are charged with by the statute. That
is not changing. The fact that we might not try to push the
envelope the same as the previous Administration did--
Mrs. Beatty. I am not comparing it to the previous. I am
only asking you what you are going to do.
Mr. Mulvaney. That is what we are going to do. I have sat
here all day--
Mrs. Beatty. I asked the same question to Director Cordray.
Mr. Mulvaney. I have sat here all day and said I am going
to enforce the law. I am going to follow the statute. I am not
going to shirk those obligations. I am going to try to be a
good bureaucrat and try to encourage the folks who work at the
Bureau to do the exact same thing.
For that reason, we still have 100 investigations of
potential violations of those 18 laws ongoing. We have a dozen
or so that might turn into lawsuits that might get settled. We
have 25 that are actively being litigated. That is still
ongoing at the Bureau. So you asked me what I am going to do,
is I am going to enforce the law because that is what I get
paid to do.
Mrs. Beatty. OK. Mr. Chairman, I would like to yield back
the balance of my time to the Ranking Member.
Ms. Waters. Thank you very much.
I would like to--last year, former Director Cordray of the
Consumer Bureau ordered Fay Servicing to pay harmed consumers
up to $1.15 million for its illegal mortgage servicing
practices. In addition to other remedial actions, the Bureau
found that Fay kept borrowers in the dark about crucial
information. They needed to receive foreclosure relief and stay
in their homes.
Mr. Mulvaney, I have constituents who were harmed by Fay
Servicing's failure to provide them with the protections
against foreclosure that they were entitled to by law. Can you
give us an update on the status of how many affected consumers
have received remedial compensation to address this wrongdoing?
Can you provide copies of both the compliance and redress plans
required by the consent order and what more is being done to
make sure Fay has corrected its practices?
Mr. Mulvaney. I can provide you with that all that
information. I cannot do it as I sit here, Ms. Waters. I will
say that that was a matter I think was concluded before I got
there, so that is why it is not readily available to me.
Ms. Waters. OK. I would like to have that information as
soon as possible.
Mr. Mulvaney. I would be happy to do that.
Ms. Waters. Let me go on further. I am concerned about
payday lenders. And you have said that payday lenders have no
influence over you. As you are aware, Janet Matricciani, I
believe is her name--
Mr. Mulvaney. I do not know how to pronounce it, either.
Ms. Waters. --is a former chief executive at World
Acceptance Corporation. She is one of your contributors. I know
you know her. She is one of the Nation's biggest payday
lenders. Under Director Cordray, the Consumer Bureau started an
investigation into World Acceptance Corporation for its abusive
practices.
After you showed up at the Consumer Bureau, that
investigation was dropped. Just 5 days after the information
was dropped and 2 days before she stepped down as CEO of her
payday lending company, she reached out to you at your personal
email address about her interest in becoming the head of the
Consumer Financial Protection Bureau.
So what is all of this?
Mr. Mulvaney. Well, actually, I do not think it is entirely
accurate, is what it is.
Ms. Waters. What is not accurate? Which part?
Mr. Mulvaney. The part about I dropped the investigation.
Ms. Waters. Did you have anything to do with the
investigation?
Mr. Mulvaney. No, ma'am.
Ms. Waters. Did you at all weigh in on it?
Mr. Mulvaney. No, ma'am.
Ms. Waters. Did you know about it?
Mr. Mulvaney. No, ma'am. Oh, no, that is not true, because
I--they had been going on for, I think, several years.
Ms. Waters. OK. Let's go back. So you did know about it. It
was brought to your attention. Did you say anything? Did you do
anything? Did you take any action at all?
Mr. Mulvaney. No, ma'am. Zero. None.
Ms. Waters. No involvement whatsoever?
Mr. Mulvaney. No, ma'am.
Ms. Waters. Has it been dropped?
Mr. Mulvaney. Yes.
Ms. Waters. Who did it?
Mr. Mulvaney. Career staff recommended that it be dropped
about the time that I took over--
Ms. Waters. Recommended to whom?
Mr. Mulvaney. That actually does not get reported up to the
director's office; they make that determination themselves.
Ms. Waters. So they did it without your knowing anything
about it?
Mr. Mulvaney. Yes, sir--ma'am.
Ms. Waters. Are you sure you want to answer that way?
Mr. Mulvaney. Yes, because it is the truth.
Ms. Waters. Well, that creates some real suspicions that
you would have this corporation--
Mr. Mulvaney. Only on your--only on your part, ma'am.
Ms. Waters. Well, it would with you because if the fact
that you do not like the Consumer Financial Protection Bureau
that you--
Mr. Mulvaney. I could look you in the eye, and would look
you in the eye--
Ms. Waters. On my time.
Mr. Mulvaney. I had nothing to do with that action.
Ms. Waters. On my time. I am reclaiming it. It does raise a
lot of questions because of the fact that you have stated more
than once that you do not like it. You do not want it to exist.
And we are going to delve further into what happened with this
decision that you claim you have no knowledge of that was made
by you. We will find out more about this. I yield back.
Mr. Mulvaney. And you will only find out that I told you
the exact truth.
Chairman Hensarling. The gentlewoman's time is expired. The
gentlewoman's time is expired.
The gentleman from Minnesota is recognized for 5 minutes.
Mr. Emmer. Thank you, Mr. Chair, and thank you, Director
Mulvaney, for being here. It is good to see you. I will get
right to it since you have been here for a long time already
and we hope to have this wrapped up soon.
In 1975, Congress enacted the Home Mortgage Disclosure Act.
This important law exposed and helped eliminate discriminatory
lending practices, particularly against minorities. In short,
HMDA, as it is commonly referred to, helped more Americans
realize their dream of owning a home.
Over the years, the disclosures required by Regulation C
have expanded away from the original intent and have actually
become an obstacle, preventing small, medium, and local lenders
from helping aspiring homeowners.
In 2015, your predecessor at the CFPB demanded from lenders
more than double the amount of data originally required by
HMDA. The change to Regulation C was supposed to take effect
last January, but before it did, in December 2017, you provided
relief for financial institutions trying to comply with the
proposed changes, essentially delaying compliance until 2019.
Now, could you agree with me that this actually helps
smaller lenders in the marketplace?
Mr. Mulvaney. It does. We determined, Congressman, from
talking to folks that they were having a great deal of
difficulty implementing the rules. We provided the additional
time.
Mr. Emmer. And you were opening--you announced you were
going to reopen the rulemaking process?
Mr. Mulvaney. On a couple different points, including, as
you mentioned, the fact that the previous director had almost
doubled, in fact more than doubled, the data sets beyond what
was required by the statute; and then also going to take a look
at the size and the complexity of the financial institutions
that are covered by the rule.
Mr. Emmer. Right. Director Mulvaney, do you agree that the
focus of the disclosures in Regulation C of HMDA should focus
on the original intent of the law?
Mr. Mulvaney. I do.
Mr. Emmer. To expose and help eliminate discriminatory
lending practices?
Mr. Mulvaney. Absolutely.
Mr. Emmer. Do you agree also that it is important for
consumers that smaller, local community banks, community
lenders, credit unions, that they are important to ensure
consumers have full and fair access to home mortgages and other
covered loans?
Mr. Mulvaney. I do.
Mr. Emmer. And are you aware that many small banks in my
State of Minnesota and other smaller lenders were reconsidering
their ability to actually even offer home mortgages and other
covered loans because of the additional compliance costs
created by this rule?
Mr. Mulvaney. And that is what is so frustrating is it is
so oftentimes what we do is I do not think we give enough
consideration to what the intended or unintended consequences
are, which is that people are not going to have access to the
credit and the capital they need, which is extraordinarily
important, especially to folks who are on the lower end of the
economic spectrum because it is the way you get up on the
economic spectrum. So we have had several examples of that here
today, especially where it comes to HMDA.
Mr. Emmer. The rule proposed by your predecessor would have
cost lenders an additional $326 million in compliance costs. Do
you know if your predecessor received any qualitative or
quantitative cost-benefit analysis on this topic?
Mr. Mulvaney. I am sure there is a cost-benefit analysis on
file. I have no idea as to how efficacious or sufficient it
was.
Mr. Emmer. Now, this additional cost--again, I asked you
earlier if the relief you provided did not help more
proportionately the smaller lenders. That is because the
additional cost, larger lenders can absorb those additional
compliance costs.
It is these small family owned community banks, member-
driven credit unions, they are the ones on Main Street in my
State, Minnesota, and I suspect all across the country, that
get hit the hardest with these additional costs. And just
rephrasing, I think what you just said, so I understand it in
my simple Minnesota way, the additional costs, you can protect
the consumer. But what are you protecting them from if they do
not have any option to get a loan for a new house, a new car?
Shouldn't that be part of the concern?
Mr. Mulvaney. It is. In fact, that is hard-wired into the
statute that we are supposed to do that.
Mr. Emmer. Right. Representative Hill discussed the data
issues that have come up. You had testified to Senator Warren
back in January of the 233 confirmed breaches and the 840
suspected breaches of the CFPB portal. Doesn't this cause you a
concern, with this double the data rule, going to your
testimony today that you are not comfortable with the data
security at the agency?
Mr. Mulvaney. The more we take in, the more we can lose.
And that is why I am very much concerned about both the scope
of the rule and about our cyber-security.
Mr. Emmer. So with all the additional costs, the potential
loss in the marketplace of opportunity for consumers, the data
problems, why not just get rid of the rule? Why reopen the
process?
Mr. Mulvaney. Well, because that is the law, and you need
to go back to your folks back home and encourage them to
participate in that process because we will go through notice
and comment. We will do it the right way. And I need to hear
from those folks. I need to hear folks all across the spectrum,
from consumer advocates, consumers themselves, financial
institutions. They need to participate in that process because
that is the way the system is supposed to work.
Mr. Emmer. Thank you.
Mr. Trott [presiding]. The gentleman's time has expired. I
now recognize myself for 5 minutes.
Director Mulvaney, thank you for being here. It is actually
productive to have someone here who listens to our questions
and tries to answer them. And you have been criticized for
having two full-time jobs. I, for one, thank you for your work
and your service. And someone as bright and with your work
ethic, I wish you had two other full-time jobs in addition to
that.
But with respect to your office, I have to say that for
$250 million, I am not all that impressed with your office. And
I am curious: How long is the lease on that building?
Mr. Mulvaney. Oh, I forget. I have five different leases we
track, Congressman. I am sorry. I cannot remember off the top
of my head how long the lease is. The lease is with--is it the
OCC or OTS? It is 20 years with two 5-year options, and it is
with the OCC. The Office of Comptroller of the Currency owns my
building.
Mr. Trott. Thank you. Before we dive into the CFPB, I would
be remiss if I did not take this opportunity just to put a plug
in for the Great Lakes Restoration Initiative Fund. From
Michigan, the Great Lakes are important to the Midwest and to
our country. The Great Lakes have over 20 percent of the
world's fresh water supply, and the funding is critical. And in
the grand scheme of things, I do not think it is even as much
as the CFPB's budget, so--
Mr. Mulvaney. Point well taken. I will mention that to the
OMB director next time I see him.
Mr. Trott. Thank you. I want to clarify one point. You have
been beat up a little bit today by the Ranking Member and Mr.
Sherman and Mr. Ellison for your initial comments where you
suggested that the statute just requires that you appear and
not testify.
And I think maybe your subtlety has been lost because you
were not here saying that in asking for a gold star for being
willing to testify, and get kudos for that. I would like to
make this point and make sure you agree with this. You are here
saying that you want to be accountable. You want to be on
appropriations. And you do not believe the statute, the way it
is written today, makes a lot of sense in terms of our job as
Members of Congress. Is that a fair summary of your position?
Mr. Mulvaney. Look at it this way. Let's say that the next
director comes in and takes the position, you know what? So
many folks have talked about how independent this agency has
been. In fact, its very founding was supposed to be
independent. It was supposed to be explicitly removed from
oversight by Congress. We were not supposed to be micromanaged
by Congress.
There is a lot of language out there--it is from Elizabeth
Warren, Senator Warren, amongst other people--who go exactly to
that point. If you take that and combine that with the actual
language of the statute, I think you could make a very
compelling case that I do not have to answer your questions and
neither does that person. I think that is wrong.
Mr. Trott. Do you think the President should be able to
fire you without cause?
Mr. Mulvaney. I do.
Mr. Trott. OK. So I really enjoyed your January 23rd
article in the journal, and I underlined three sections of it.
In one, you said, ``The Bureau's previous governing philosophy
was to push the envelope aggressively under the assumption that
we were the good guys and the financial service industries were
the bad guys.'' And I could not have said it better myself.
Under the prior tenure of Director Cordray, his attitude
was, business is bad, particularly banks. And if you are in the
banking business and you are profitable, then you must be
taking advantage of consumers. And my concern is there are
numerous articles out there, there was a great 1-1/2 years ago
in ``The Atlantic'' magazine, about the culture of the CFPB and
the politically motivated culture there and this mind set. And
you have said great things about the bureaucrats there and how
talented and dedicated they are this morning, and I appreciate
those comments. But can you comment on the culture? Are you
able to change that culture so that this mantra of business is
bad is not the prevailing thought of the bureaucrats?
Mr. Mulvaney. I think if he were still here, Mr. Delaney
and I would agree on more than he probably recognizes, which I
do agree that the personality of an organization often takes on
the personality of the person, the man or woman in charge. And
to an extent that Mr. Cordray had that attitude about business
and about banking and about the role of the CFPB, the Bureau, I
think that pervaded the operation of the Bureau.
I have an entirely different attitude toward what financial
services are and what they can do to help people. So we are
going to look at this with a healthy balance of the folks who
make loans and the folks who take loans and try and do our best
to protect consumers without removing choices from consumers.
Mr. Trott. In the editorial you also talk about the CID
process, and you say where do the people charged go to get
their time, their money, their good names back? If a company
closes its doors under the weight of a multiyear CID at the
CFPB, what about the workers that are laid off as a result?
In my prior life, I can tell you I know of a thousand
people that lost their jobs because of the CID process. It
really--when the Federal Government comes in, there are not
many good things that happen, even for good actors. And my
question is, have you changed the CID process or have you
looked at it such that if it is a bad actor--if it is a bad
actor, who cares what happens to him? If it is a good actor and
there is no finding and the file is closed, the company
shouldn't be put out of business.
Mr. Mulvaney. Mr. Chairman, I can change the way the place
is run while I am there. Only you folks can change the
underlying DNA of the Bureau. That means changing the statute.
Mr. Trott. Great. Well, I appreciate your comments. I also
thought giving guidance is important because, as it existed in
the prior Administration, the CFPB acted more like the Mafia
than a consumer protection agency.
My time has expired. I recognize the gentleman from
Georgia.
Mr. Loudermilk. Thank you, Mr. Chairman. And thank you,
Director Mulvaney, for being here today. Listening earlier,
when you were talking about the statute and how--the
interpretation, I think you are exactly right. The way the
statute was written doesn't compel you to answer any questions
here, but you are here answering the questions.
Mr. Mulvaney. Right.
Mr. Loudermilk. And I think that is a testimony to you
wanting to do good government--governance. And the testimony
that you want to operate the organization in the way it should
be operated in protecting consumers. And I think that is what
we are really here to get at, is to have this flow of
information. And I apologize that some have turned this into
just trying to be a gotcha moment, when I think Americans are
really tired of that.
There is something that you said a little while ago that
resonated with me, and it--you said, the more we take in, the
more we have to lose, which goes back to something, a principle
that, when I worked in the military and with 20 years in the IT
industry was, you don't have to protect what you don't have. In
other words, if you don't need data, don't have the data, don't
collect the data.
And I appreciate that you had mentioned to Mr. Hill earlier
that you stopped the Bureau's collection of consumer
information, as you came in. Again, data collecting that you
don't have to have, you don't necessarily need to have, but
becomes a risk to be compromised in the future.
And can you elaborate a little more on the specific items
that you are looking into to improve CFPB's cybersecurity?
Because that is a big concern to a lot of Americans today,
especially with agencies that do hold a lot of data.
Mr. Mulvaney. Well, what we did was prioritize and triage,
Congressman Loudermilk. And what we did is we treated the data
within our enforcement area one way, because we have to have it
in order to enforce the law. You have to have some information.
So we have tried there to make accommodations. We have worked
with some of our sister agencies whose systems are a little bit
more robust than ours are to hold our data for us. We have
limited some of the stuff that we take in. We have done some
more onsite, where we look at the data but don't collect it. To
your point, we might need it but we don't need to keep it. So
we have tried to make accommodations there.
We have not had as much--it has not been as quick over in
the supervision area. Another thing that we do there, which is
different from enforcement. They are related but not the same.
Because we have those preexisting relationships with, say, the
Department of Justice when it came to enforcement, did not have
those preexisting relationships when it came to supervision. So
it has been a little slower there.
I will also tell you that we have undertaken to do some
let's say third party--we have hired folks to see if they can
hack into our system.
Mr. Loudermilk. Good.
Mr. Mulvaney. I don't want to go into any more detail than
that. I have talked to you about it privately. But we have
done, I think, that which you would have done under the same
circumstances to try and make sure that our systems are
protecting the data so that we don't have the same type of
problems that we sometimes accuse people of having in the
marketplace.
Mr. Loudermilk. I highly commend you because of all the
agencies that I have dealt with on this issue, you are the
first one who has laid out a plan that actually hits what we
should be doing, and I commend you for that.
I would like to follow up on something that Chairman
Hensarling asked earlier about the CFPB's Qualified Mortgage
rule, but you didn't have time to fully answer that.
During your required 5-year review of the rule, will you be
looking at both the costs and the benefits for consumers in
this rule?
Mr. Mulvaney. That is what the statute says to do, so we
will be doing it.
Mr. Loudermilk. Well, thank you. And while we are talking
about the statute, I have looked at the statute and I don't see
CFPB in the statute anywhere, Consumer Financial Protection.
What is the name of the organization and why do we call it
CFPB?
Mr. Mulvaney. I don't know why we call it the CFPB, but
that is not the name of the organization. The organization is
the Bureau of Consumer Financial Protection. That is the name
of the statute, Title X. That is the subheading under the
Bureau. That is the defined term under the Bureau. The Consumer
Financial Protection Bureau does not exist.
Mr. Loudermilk. So I assume if there are any legal filings,
it is all done under the name of the statute, not the CFPB?
Mr. Mulvaney. The stuff that we send to the Federal
Registry--Federal Register is done in the name of the Bureau of
Consumer Financial Protection. I was surprised to find out that
our lawsuits are actually brought in the name of the Consumer
Financial Protection Bureau, which surprised me, and it is a
practice we are going to change. But the CFPB technically does
not exist.
Mr. Loudermilk. Wow. One closing thought. Dealing with
transparency, that has been brought up and a lot of accusations
have been made about your transparency here. What I have seen
is a lot of transparency from this organization. In the
previous leadership of this organization, there was a high lack
of transparency when it came to this committee asking for
information that we needed. And I believe and I hope that that
will be different under your directorship, that we will get
information that we request and ask for.
Mr. Mulvaney. I have said this to the Chairman, I will say
it to the Ranking Member. Ask us for stuff, because I think you
might be surprised once you know more about what we are, you
might be more inclined to work together to help reform the
place.
Mr. Loudermilk. Thank you for your work.
Chairman Hensarling. [presiding.] The time of the gentleman
has expired.
The Chair now recognizes the gentleman from Ohio, Mr.
Davidson.
Mr. Davidson. Thank you, Mr. Chairman.
Director Mulvaney, I want to thank you for doing two jobs
very well, and I appreciate you for taking on that extra task.
And, frankly, I appreciate your family for supporting you in
doing that. So thank you.
Would you say the CFPB or the Bureau of Consumer Financial
Protection--so we are talking about the same place--is a
nonpartisan agency?
Mr. Mulvaney. In what sense?
Mr. Davidson. Is it affiliated with a particular political
ideology or political party?
Mr. Mulvaney. I understand. I think it is fair to say that,
as of this point in time, the Bureau of Consumer Financial
Protection is probably perceived as being closely aligned with
Senator Elizabeth Warren.
Mr. Davidson. And so in some ways, is it acting in a way
that is different than an Executive branch agency?
Mr. Mulvaney. I think since I have gotten there, things
have changed. I think certainly I have run the place
differently than Mr. Cordray did, if that answers your
question.
Mr. Davidson. Well, I think it gets at it. But culture is
really important. And, frankly, the Executive branch, as you
have highlighted, its job is to execute the law, the law as
passed not necessarily the law as its director wishes existed.
And I am particularly concerned about the culture that was
created there by the former director. It seems to perhaps be
hyper-partisan, to be in some ways well outside the scope of
the statute and beyond the limited authority that it has, in
the sense of a charter, but as you have highlighted, the
authority is massive. And so you can really flesh out what is
at the heart of the ideology of the person leading the
organization.
And so just to highlight that, do you feel that a
nonpartisan agency, why would they need to spend money on a PR
firm?
Mr. Mulvaney. That is a great question. Not really sure. If
you are speaking of the GMBB contract?
Mr. Davidson. Well that would be in the abstract. But, yes,
particularly they chose GMBB which isn't just a PR firm, they
are a particular brand of PR firm. What do you know about that
brand?
Mr. Mulvaney. What I know is that we have canceled that
contract, we are in the process of canceling that contract.
Mr. Davidson. Thank you. And I appreciate you for that. Do
you feel--I don't want to draw a conclusion based on the fact
that you have canceled it. Do you feel that the American people
were getting a good value for the $43 million that CFPB was
spending with GMBB?
Mr. Mulvaney. If I thought I were getting good value for my
$43 million, I would not have sought to cancel the contract.
Mr. Davidson. Do you feel like they were effective at
conveying the mission of the Bureau?
Mr. Mulvaney. Let me put it to you this way. I don't think
that our statutory mission was being served. I am not sure why
we have to--the SEC does not advertise that it exists. The FDIC
does not advertise that it exists.
I guess you could make the argument that in the very early
days, when you are going from nothing to something, maybe you
could make the argument that you should let people know you do
exist. But that is an argument for a declining expenditure on
advertising over the course of time, not an increasing line
item on advertising.
So, like I said, we are in the process of canceling the
contract and I think it was the right decision.
Mr. Davidson. Thank you for your stewardship on that. And I
just find it particularly odd that an agency, even with the
size of budget--and thank you for reigning that in as well--
that CFPB has had, 3 percent, the highest of any agency in this
decade in spending on PR. Not that no agency spends money on
PR, but way out of bounds. And with a hyper-partisan, Hillary
Clinton-affiliated PR firm, a firm that Barack Obama spent
millions and millions of dollars with when he was a
Presidential candidate.
Mr. Mulvaney. I want to make one thing perfectly clear, Mr.
Davidson, just so--and this is particularly aimed at my
colleagues across the aisle. That $242 million that I spent on
the building, I could take that and hire Breitbart. I could
take that and hire the Drudge Report to do marketing that I
like for the Bureau. I am not going to do it, because it is the
wrong thing to do. But I have that kind of flexibility. I could
hire the Heritage Foundation to do education. I could hire AEI
to do the same type of thing. It is a tremendous amount of
discretion. I am not going to abuse that. But the statute
certainly permits it.
Mr. Davidson. Yes, and so I think to your point there, the
wide-open nature of the statute really does more to highlight
the views and ideologies of the person making the decisions. In
this case, Director Cordray had a very different value system
than the one you have carried there, and I thank you for your
stewardship and I have a couple other questions with a little
bit of time remaining, but my time has indeed expired. So thank
you, Director Mulvaney, and I yield.
Chairman Hensarling. The time of the gentleman has expired.
The Chair now recognizes the gentleman from Tennessee, Mr.
Kustoff.
Mr. Kustoff. Thank you, Mr. Chairman. And thank you,
Director Mulvaney, for coming to testify this afternoon. We
appreciate it very much.
First of all, let me say that I appreciate the tone and
candor that you have expressed today on both sides to all
questions across both aisles. I think that we both share the
common belief that the heart of real consumer protection means
returning the power of the Bureau to the hands of the consumer
rather than one single bureaucrat. Certainly, that is something
you have talked about today. And again, I do appreciate your
tone.
By increasing the transparency of the CFPB, I don't think
there is any doubt that the consumer benefits by having
increased economic freedom. Part of this was discussed in the
Bureau's strategic plan, as one of your primary objectives to
``identify and address outdated, unnecessary and unduly
burdensome regulations in order to reduce the unwarranted
regulatory burdens.''
Director Mulvaney, could you elaborate on some of the
changes that you will impose or you have imposed to ensure that
all consumers have access to markets for financial products and
services?
Mr. Mulvaney. Sure. And keep in mind, the reason we are
doing that is that is a specific mandate of the statute. I was
always surprised, I don't think that appeared in the strategic
plans in the past, even though it is in the statute. I may be
wrong, it may have been in there. But I think for some reason I
seem to remember that in previous strategic plans, the previous
management did not isolate that, did not draw attention to the
fact that this is part of our job. Part of the statutory
mandate is to look at overly burdensome and unduly burdensome
regulations.
So what we are doing is exactly that. We go through--one of
the primary tools for that, Mr. Kustoff, is the 5-year lookback
that we do. And you have heard me mention that several times
here today, that stuff that has been on the books for 5 years,
we will go back and take a look at and see if it is working out
the way we thought it would, did it have unintended
consequences, did it have good consequences, does it need to be
revisited, those types of things. And that is--that is one of
the primary things we have been doing.
You have also heard us talk about just going ahead and
announcing that we are going to be revisiting certain rules,
revisiting the payday rule, revisiting the HMDA rule under the
argument that I want to see the information myself. I want to
go through the Administrative Procedures Act. I want to collect
the data, I want to get the notice and comments, and I want to
see what the cost/benefit analyses look like to see if I would
have made the same decision that my predecessor did.
So I think in a variety of different places, we are doing
everything we can to try and bring some common sense back to
the way the Bureau is run and how it interacts with both
consumers and the providers of capital.
Mr. Kustoff. And by doing that, does that adequately strike
a balance, if you will, between the industry concerns and
consumer needs?
Mr. Mulvaney. I hope so. That is what we are shooting for
is a balance. I have met with as many consumer groups as I have
met with industry groups. It is about balance and it is about
listening to all the sides of the equation before making a
determination, not going into an analysis with a predetermined
outcome and just checking the box, well, I know I'm going to do
this but I know the law says I have to talk to that bank so I
go talk to that bank. I don't care what they say but I have to
say that I talked to them. That's not the right way to do what
we do. And to the extent it happened in the past, it's not
going to happen in the future.
Mr. Kustoff. You generally this morning and this afternoon
talked about what you walked into, the employees that you have
encountered at the CFPB. How would you characterize their tone
and ethic, if you will?
Mr. Mulvaney. I tell you, it has been one of the most
pleasant and positive surprises. The overwhelming majority,
overwhelming majority of the folks I think who work there just
want to be good bureaucrats. They want to be good Government
workers. And they are working just as hard under my new
direction as they were under Mr. Cordray's. And that has been a
pleasant surprise. The quality of the work, especially the
legal work that I have seen, is as good as I have seen from any
place in my adult career. That has been very, very encouraging,
that folks have been able to switch gears. And I think that
speaks well of our ability to be a credible regulatory body
going forward.
That said, is there a very small minority of people who
would like to see me fail because they are ideologues and they
are activists? Yes, they are there. And we will just have to
deal with it. That is life in Washington, D.C. in the 21st
century.
Mr. Kustoff. One concern that people have had under the
prior director was overreach by the CFPB. Do you feel like now,
now that you are the director or the acting director, that
there is not the concern that people like me would have in
terms of overreach by the CFPB?
Mr. Mulvaney. If it is in the statute, we are going to do
it. Beyond that, we are going to be very reserved in the
execution of our authority.
Mr. Kustoff. Thank you. I yield back the balance of my
time.
Mr. Mulvaney. Thank you.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentleman from New Jersey, Mr. Gottheimer.
Mr. Gottheimer. Thank you, Mr. Chairman.
Thank you, Mr. Mulvaney. Per the AP, a review of the CFPB
database obtained by the AP through a Freedom of Information
request shows that the Bureau issued an average of two to four
enforcement actions a month under former Director Cordray, the
last appointee. But the database shows zero enforcement actions
have been taken since November 21, 2017, 3 days before Mr.
Cordray resigned. Except for enforcement actions strategically
announced yesterday, there has been nothing coming out of the
CFPB.
Mr. Mulvaney, reports indicate that you have scaled back
the investigations--
Mr. Mulvaney. I hate to interrupt you, Congressman.
Mr. Gottheimer. Yes, sir.
Mr. Mulvaney. We did not announce any enforcement actions
yesterday.
Mr. Gottheimer. OK, so I will just get to my question then.
Mr. Mulvaney, the reports indicate that you have scaled
back the investigation of Equifax. And while Equifax's
regulatory filings note the investigation still exists, the AP
recently reported from three sources that the agency has not
ordered subpoenas against Equifax or sought sworn testimony.
These are preliminary and common steps in any investigation, as
you know, and it seems you have also abandoned plans to test
data protections at Equifax.
More than 143 million people were affected by this, a
service that they didn't even sign up for. Their handling of
the response was flawed, from providing immediate information
to victims to providing services to address their failures. In
my opinion, the agency has clear jurisdiction. Why is the
agency failing to aggressively address this issue which
affected so many Americans?
Mr. Mulvaney. A couple of different things, and I have
mentioned this. I know that you haven't been here for the rest
of the hearing.
Mr. Gottheimer. Sorry. Sorry, yes.
Mr. Mulvaney. I have mentioned this a couple different
times, but I will go back and do it again.
Most of what you just said is wrong. It is not your fault,
because it was reported, but it is--
Mr. Gottheimer. I am eager to get the facts, so thank you.
Mr. Mulvaney. It is inaccurately reported.
We do not comment, generally, on ongoing investigations. So
I will say this about Equifax.
At the end of their last 10-Q filing, they disclosed that
they were being investigated by the Bureau of Consumer
Financial Protection. And the story broke, I think that Reuters
broke the story that said we had done what you just described.
Mr. Gottheimer. AP.
Mr. Mulvaney. I am not in a position to correct that,
because I am not allowed to comment, or our practice is not to
comment on the existence or nonexistence of ongoing
investigations. Clearly, folks knew it was ongoing because
Equifax chose to disclose it. I was not in a position to
clarify anything. And I think the folks who leaked the
inaccurate information knew that. So all I said was, I
encourage folks to go look at the 10-Q--the 10-K filing that
will come, I think, at the end of the first quarter. And, sure
enough, when Equifax filed their 10-K, they once again
disclosed the fact that they were being investigated by the
Bureau of Consumer Financial Protection.
So most of what you said is wrong. It is not your fault,
because it is the media. But I will--
Mr. Gottheimer. I assume you are disturbed, like the rest
of us, about obviously what's been found and the millions of
people whose lives were affected.
Mr. Mulvaney. Again, I was one of those folks. But I do not
comment on ongoing investigations.
Mr. Gottheimer. Thank you. If we could switch gears
quickly, prior to taking over the CFPB, the agency was
proactively protecting first responders. Director Cordray at
the time was making sure first responders awaiting payments
from the 9/11 Zadroga Fund weren't being scammed. Of course,
these are the police and firefighters that responded for us
after the 9/11 terrorist attacks and that were being scammed,
and they are the people that were moving rubble and helping
those injured, and helping our country recover after a
terrorist attack.
But now there is at least one company, and among others,
trying to take advantage of these heroes and scam their
payments. One company allegedly misled police officers,
firefighters, and other first responders about the terms of
advanced payments. In some cases, the transactions were
equivalent to rates of more than 250 percent. The company's
convoluted contracts confused consumers and charged unlawfully
high interest rates for advances. USA TODAY wrote about one
former officer who was disabled by respiratory illness after
responding to Ground Zero. The officer received $355,000 in
advances as he waited for his settlement, thinking it would be
a mere 19 percent interest. Instead, the company charged
roughly--sought roughly $860,000 in total repayments.
Do you think, A, do you know if the Bureau is still going
after companies like this? And do you think the Bureau is
appropriate to go after companies like this?
Mr. Mulvaney. I am not exactly sure if the facts and
circumstances you mentioned relate to the one lawsuit that I
know is public, so I am going to assume that it is. If it is
not, I apologize, we will have to straighten it out--
Mr. Gottheimer. Yes, speak just broadly about this.
Mr. Mulvaney. It is similar enough.
Mr. Gottheimer. Yes.
Mr. Mulvaney. It is publicly disclosed we filed a lawsuit
against a company called RD Legal. That is an ongoing piece of
litigation. We did not dismiss that. We are actively pursuing
the causes of action against RD Legal.
Mr. Gottheimer. And so taking out that specific case
because I know you can't comment on specific cases, in general,
companies that are taking actions against victims of first
responders of 9/11 and who were victims of companies like
these, what is the opinion, what is your opinion on it?
Mr. Mulvaney. Folks that we catch breaking the law will be
pursued by the Bureau.
Mr. Gottheimer. OK. Thank you very much and thank you for
your time.
Chairman Hensarling. The gentleman yields back.
The Chair now recognizes the gentleman from New Jersey, Mr.
MacArthur.
Mr. MacArthur. Thank you, Chairman. And Director Mulvaney,
thank you for your presence here today and your candid answers.
I wasn't here when Dodd-Frank was passed, I wasn't here
when CFPB was started. And maybe I don't feel any reflexive
need to either defend or attack this institution. I just want
to see the agency do its best for consumers.
I know there are bad actors out there. I spent a life in
business and I encountered some of them. And so I am a strong
advocate for consumer protection.
I am concerned though about second-order effects of some
things that I have seen CFPB do. And I am concerned that it
might hurt the very consumers that it is purportedly trying to
protect.
Enforcement penalties have an effect on companies that, in
my view, should be commensurate with what they have done. If
they have done some egregious act, then the penalties should be
commensurate with that act.
The reality though is, for public companies, their value is
some multiple of their earnings. And a million-dollar reduction
in earnings can be a $15 million effect. The mere suggestion
that a company has acted badly can destroy its reputation in
the public markets and it can drive it into a tailspin. And
that worries me, because these companies are owned by Main
Street investors, 401(k) funds, pension funds.
Are you familiar with the PH&H case?
Mr. Mulvaney. I am, yes, sir.
Mr. MacArthur. I spent a good deal of my time 1 year or 2
years ago questioning your predecessor about that case. PH&H is
domiciled in my district. They employ 3,500 people in my
district. And tell me if I am getting any of these facts wrong.
They were tried inside the CFPB. The result was a $6.4 million
judgment, which ignored the statute of limitations. But that
aside, that was the judgment.
Your predecessor, then-Director Cordray unilaterally
increased that to $109 million. And the company subsequently
lost over a billion, with a B, over a billion dollars in market
valuation.
Is that case resolved? Was it finally adjudicated? Or is
that still pending?
Mr. Mulvaney. I am going to be careful here. There was a
decision handed down by an appellate court. I do not believe
the time for filing appeals has run out yet. So it is
technically still ongoing; either side can still appeal. But
there was a decision handed down by the court of appeals.
Mr. MacArthur. But it is fair to say, and I am not trying
to litigate that case here--it is complicated and I think my
own view is that CFPB overreached and hammered a company that
was relying on guidance from two different agencies. But that
aside, the point I am trying to make is a billion dollars of
value was wiped out, and that affected Main Street investors,
pension fund holders, 401(k) investors, the employees of that
company. And it has been bouncing around the courts now because
there was overreach. And the director's unilateral judgment of
$109 million was challenged and that challenge has been
sustained.
Mr. Mulvaney. Go back to the Chairman's opening comments
about what the director can and cannot do. And I hope the
Ranking Member pays attention to this. Because what you just
described is an accurate factual representation of what
happened.
I am the court of appeals from the administrative law
judge.
Mr. MacArthur. And that is my point. So my question to you,
Director, is do you look--does any part of CFPB look at the
effect on companies' valuations, on second-order effects from
the penalties that you impose? Is there that kind of analysis
to see whether the effect is really, really commensurate with
the offense?
Mr. Mulvaney. Honestly, I don't know, because I haven't
been called upon to do that yet. But to the point you're
making, which is should we consider what is going to happen?
Absolutely.
Mr. MacArthur. I would urge you to do that.
In my remaining seconds, I just want to thank you for doing
two jobs. There has been much fuss made today about the fact
that you are filling this role temporarily until June 22. There
is not a company in the world, when they lose the senior
executive, which happened when Richard Cordray stepped down to
run for Governor. That is his prerogative. I am not faulting
him, but he created the vacancy. It takes time to fill
vacancies. And the President asked you to do this temporarily.
It is a lot of work and I, for one, appreciate your efforts in
getting it right.
Mr. Mulvaney. Yes, sir.
Mr. MacArthur. Thank you. I yield back.
Chairman Hensarling. Does the Ranking Member seek
recognition?
Ms. Waters. Unanimous consent to enter into the record,
sir, two communications. One from Consumers Union in support of
the Consumer Financial Protection Bureau, and U.S. PIRG, also
in support of the Consumer Financial Protection Bureau.
Chairman Hensarling. Without objection.
The Chair now recognizes the gentleman from North Carolina,
Mr. Budd.
Mr. Budd. Thank you, Mr. Chairman. Thank you, Mr. Mulvaney,
as well. I appreciate all you do for service in this Nation and
your vision for the CFPB is one that I support, transparency
and objectivity. So thank you. Thanks also for doing two jobs
for the price of one. We could sure use a lot more of that in
this city.
So last year a Wall Street Journal investigation found that
a large number of public comments that were submitted to
Federal agencies, including the FCC and the agency that you
head up, CFPB, that those are actually fraudulent submissions
using stolen identities of real people to mimic actual
grassroots support. All this according to the Wall Street
Journal.
Does the CFPB have text analytic measures in place to
separate and identify legitimate public comments from bot and
other computer-generated IDs? And if not, why?
Mr. Mulvaney. I think--I am going to do my best to answer
that question and then I am going to get back to you with more
details. I think we do have systems in place that would filter
out what are obviously form responses. If a bunch of them are
the exact same, we know about that. I don't know what we do to
get to the more sophisticated stuff, to actually track down if
it is a real person or not. But I do know that we have some
protections in place to make sure that we know if someone wrote
in their own answer or if someone was sending in a response
from somebody else.
Mr. Budd. OK. So I want to switch over to data security and
discuss some of the efforts you have taken to improve the
Bureau's data security program. Can you tell me how many
confirmed breaches of consumer personally identifiable
information have occurred within the Bureau's consumer response
system and in the company portal?
Mr. Mulvaney. Yes, it is just north of 200. I don't have
the exact number. We think there are another 800 that we
suspect might have been lost, but we haven't been able to nail
that down.
Mr. Budd. How many complaint narratives have been published
in the consumer complaint portal with unredacted consumer or
third-party names?
Mr. Mulvaney. A couple hundred. Your point is this, we are
supposed to redact that information and those fall through the
cracks and the unredacted stuff ends up on the publicly
available portal, which is wrong.
Mr. Budd. I understand.
What specifically has the Bureau done under your leadership
to improve data security? I think that was one of your stated
goals when you stepped up to the role.
Mr. Mulvaney. We are taking a long look at it, doing a
bunch of different things, including asking some of our sister
agencies to help us manage data while we fix our systems. And
the primary thing we are doing right now is actually working
with the Department of Defense to test our own vulnerabilities.
Mr. Budd. To shift gears a bit, and this may have come up
earlier in the hearing. But you have discussed previously the
number of well-paid economists that work there, 40 or 50 or so,
and it is hard to do a reduction in force the way it is
constructed, the way the statutes are for your agency. Is there
a way to take well-paid key employees and perhaps do an
interagency loan of these employees?
Mr. Mulvaney. Yes, it is called detailing, and we have
actually reached out to some folks to see if they are
interested in doing that. If there are folks that we have that
we could be getting a better return on our investment in them
in another agency, we are exploring that possibility.
Mr. Budd. Thank you again for your time.
Mr. Chairman, I yield back.
Chairman Hensarling. The gentleman yields back. The Chair
now recognizes the gentlelady from New York, Ms. Tenney.
Ms. Tenney. Thank you, Mr. Chairman. Thank you, Mr.
Mulvaney, for your service and for withstanding all this
exciting testimony today while we have another--
Mr. Mulvaney. It's just I don't remember the room being
this cold. Is it colder down here than it is up there?
Ms. Tenney. It is cold in here. That's why I have my coat.
But I do want to say, I enjoyed reading some of your
preparatory materials, including referencing Madison in the
Federalist Papers. And I always--when I think about who is in
charge, I always think about Madison's Federalist 10, which
says enlightened Statesmen will not always be at the helm. And
I think we are prepared for that.
And that is one of the reasons I want to ask you, I know
you have been asked this. But again, going back to the
importance of transparency and the importance of accountability
in this body. And if you could just say one more time, and I
know that you have had this, and I apologize if you have said
it in another way.
How can we make CFPB more accountable? I know we are doing
that under your leadership. But to understand that if we are
going to have unenlightened Statesmen someday at the helm
again, how do we prevent that from happening using the checks
and balances in our constitutional system? And I knew you
alluded to the appropriations process and bringing us back to
the Congress for that. Can you highlight just maybe a couple of
things that you would do as Chairman to make sure that in the
event that you aren't the Chairman and we have someone that is
not as enlightened as you are, how we protect the people?
Mr. Mulvaney. Thank you for the opportunity. We'll skip
over the appropriations, because we talked about that. And if
there is one thing you could do to bring some transparency and
accountability to the Bureau, it would be that. But beyond
that, I made a couple suggestions and I will talk about some
other ones.
I would love to have an independent IG. I have gotten
tremendous service from the inspector general. I do not mean to
denigrate their work at all. I think we have worked with them
extraordinarily well. But they do share us with the Federal
Reserve Board. It's actually a cost savings to us to have our
own IG.
By the way, I am going to go down this list a little bit,
and I think y'all have voted on just about all of these and I
think most of them have passed on a bipartisan basis. I would
love to see myself, this position, answerable to the President
and removable at will, as opposed to just for cause. I think
that makes it a lot more accountable.
I think what we call applying the REINS Act to our rules
would help bring some consistency across various agencies. Keep
in mind, one of the things that I think is important is to make
sure that when we put out a rule or a reg, we are not doing the
exact opposite of what one of the other regulators is doing, so
that we don't say you have to do A and the FDIC saying you have
to do the exact opposite of A. And right now, I don't think
there's a very robust method to do that. If we had more
oversight from you folks in terms of the OIRA rules, if we were
brought under OI, for example, in terms of coordinating across
various agencies, that would be helpful.
So there are a lot of things that we could do. We talked
about the five-person commission to smooth things out so you
don't get these wild swings between me and Mr. Cordray and
whoever comes next.
So there are a bunch of things that you can do, a bunch of
things you have already done. And I do encourage you to
continue to push those reforms as you look at your version of
the banking bill, the Crapo bill, that the Senate has passed.
Because I think now is the time to do it. If you don't do it
now, my guess is it could be a long time.
And I didn't have a chance to say this earlier, so I want
to say this. I don't think that we are in a rush. I don't think
that we have to have a bill by the end of this week from the
Senate. I think we need to go ahead and do it right, because I
don't think you get a chance to do it again for a long time.
Ms. Tenney. Thank you very much. I appreciate the
testimony. And I think that down the road, I do think we have
to do it right this time. I think we have an opportunity. We
have an opportunity, of course, hopefully to get the Senate to
act on many of the bills that we have that you have cited and
to make sure these things go through. But I think we are on the
road.
But I do appreciate your leadership and your willingness to
come here and be very honest and frank with our committee
today. It was really a pleasure to listen to you. It is very
unusual to see someone in Government that is just so honest and
transparent and we appreciate it.
Mr. Mulvaney. Thanks very much.
Ms. Tenney. So thank you so much for your service.
Mr. Mulvaney. I appreciate it.
Ms. Tenney. Thank you. I yield back.
Chairman Hensarling. The gentlelady yields back.
The Chair wishes to inform all Members that votes are
currently taking place on the floor. There being no other
Members in the queue, I would like to thank the witness for his
testimony today.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
This hearing stands adjourned.
[Whereupon, at 1:44 p.m., the Committee was adjourned.]
A P P E N D I X
April 11, 2018
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