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Mulvaney: Political Arsonist

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By Bartlett Naylor and Lisa Gilbert

“We’re not burning it down.”

That’s Mick Mulvaney describing his management of the U.S. Consumer Financial Protection Bureau (CFPB). Yet he keeps setting fires – terminating enforcement, ignoring supervision, slashing funding, leaving vacancies unfilled and closing outstanding cases.

John Michael “Mick” Mulvaney also serves as the U.S. Senate-confirmed director of the U.S. Office of Management and Budget (OMB). Running OMB should more than absorb his waking hours, so it’s natural to assume that Mulvaney would function as the CFPB’s caretaker. Instead, Mulvaney is stopping just short of “burning it down:”

  • He has failed to announce any new enforcement actions. The last enforcement action announced by the CFPB was on 21, 2017, which involved Citibank student loan services failures. Prior to that, the bureau took action at least once a week, sometimes more. These cases involve firms that deceived borrowers, illegally posing as government agents, stealing from consumers, lying to loan officers and more, and have returned $12 billion to more than 28 million victims. But since Mulvaney took over, there have been zero enforcement actions.
  • He terminated numerous cases against firms, including at least one at a firm that contributed to his campaign for Congress. World Acceptance Corp. received a CFPB letter in January telling it that it would no longer be under investigation, following four years of work by the agency. The firm had contributed $4,500 to Mulvaney’s campaigns when he ran successfully for Congress from South Carolina.
  • He sidelined a rule meant to reduce abuse by loan sharks. On Jan. 16, 2018, Mulvaney announced that he “intends to engage in a rulemaking process so that the Bureau may reconsider the Payday Rule.” Already, the CFPB invested five years drafting this rule, incorporating a million public comments and countless meetings and roundtables with industry and consumer advocates.
  • He defanged the Office of Fair Lending and Equal Opportunity, a team responsible for combating racist lending. Defying the statute, Mulvaney summarily stripped it of oversight and enforcement powers.
  • He requested $0 funding for his first quarter of operations, drawing down reserves.
  • He placed political operatives, many from the U.S. House Financial Services Committee, in key supervisory positions. The law requires the CFPB to hire exclusively on merit.
  • He has ordered a foundational policy review of virtually all of the CFPB activities, from enforcement to rulemaking. Specifically, he is asking firms suspected of abuse to file public comments.
  • He rewrote the CFPB’s mission statement, adding protection of Wall Street as a goal, which most would say is the exact opposite of his agency’s mission.

Congress created the CFPB in response to reckless, fraudulent and predatory lending that caused the financial crash of 2008. Existing bank regulators didn’t deal with this conduct because they were concentrating on industry profits as a proxy for safety and soundness, which they viewed as their primary oversight mandate. Those profits, however, came from a business model based on unfair, deceptive and abusive practices.

Public Citizen, as a consumer protection organization, fought especially keenly for the creation of this agency in Congress. Then-Harvard Law School Prof. Elizabeth Warren conceived it in a paper titled “Unsafe at Any Rate,” an homage to Public Citizen founder Ralph Nader’s “Unsafe at Any Speed.” Consumers deserve dedicated protection against Wall Street’s scams just as they do against shoddy automobile manufacture and exploding toasters.

Whether Mulvaney savages the agency to oblige his former campaign sponsors or to fulfill his anti-government nihilism, it all amounts to political arson. Eventually, Trump will have to nominate a permanent director who faces Senate confirmation, as the law provides. Until then, we can only hope that the fires Mulvaney has set don’t rage out of control.

In the meantime, members of Congress should continue to hold Mulvaney accountable. In what is expected to be an epic showdown, U.S. Sen. Elizabeth Warren (D-Mass.) in a Thursday hearing at 10 a.m. EDT will grill Mulvaney on his tenure at the CFPB. Public Citizen will live-tweet the hearing from @Public_Citizen. Please join us if you can.

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Disaster Relief Package Contains Poison Pill Riders That Must Be Removed

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Disaster victims California, Florida, Texas, Puerto Rico and the U.S. Virgin Islands are waiting for help from Congress, but instead of providing it, Republican lawmakers are playing partisan political games with the relief package. The relief package passed by Republicans in the U.S. House of Representatives contains a number of poison pill policy riders that must be removed from the package.

These include a revision to the Robert T. Stafford Act that would allow houses of worship to receive relief funding, violating the U.S. Constitution’s wall of separation between church and state, as well as the expansion of a pilot program to address possible duplicate enrollments in the Supplemental Nutrition Assistance Program that could impede access to food stamps for struggling families.

The disaster supplemental is just the latest example of congressional Republicans inserting ideological poison pills into must-pass spending legislation. Republicans needs to stop playing political games with appropriations process and remove these inappropriate measures from the package.

Public Citizen strongly supports disaster relief, but the disaster relief package should not be used to advance ideological poison pills.

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McCain, Flake, Pence and Trump: Wall Street Collaborators

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On Oct. 24, U.S. Sens. John McCain (R-Ariz.) and Jeff Flake (R-Ariz.) and Vice President Mike Pence voted to help Wall Street steal from Main Street consumers.

At issue was whether customers who have been ripped off or scammed by a bank, credit card company or lender have the right to go to court. Financial companies like Equifax and Wells Fargo have hidden forced arbitration clauses in the fine print of take-it-or-leave-it contracts, denying customers this basic American right, instead forcing customers into secretive private arbitration systems rigged to favor corporate crooks.

In July, the U.S. Consumer Financial Protection Bureau issued a rule restoring our right to join together in class actions to take financial scammers to court. In an achingly close vote, McCain, Flake and 48 other Republicans voted to strike down the rule, and Vice President Pence provided the tie-breaking vote, handing a virtual Get Out of Jail Free card to financial institutions.

McCain and Flake betrayed Arizona voters, who supported the rule by more than 4-to-1. To be clear, you can’t get to 81 percent support for anything in a state like Arizona without a whole lot of Republicans in the mix. Even conservative pollsters found that nearly two out of three Republicans nationwide wanted to keep the rule. So why did Arizona’s two senators flout the will of their own constituents? Wall Street money.

The financial sector has contributed tens of millions of dollars to senators who supported overturning the rule and spent untold amounts lobbying against the rule. Flake has received more than $2.8 million and McCain has received nearly $40 million in lifetime contributions from the financial industry – a small price to pay for the billions in profits they will reap by stealing from consumers.

Who will be hurt by their collaboration with Wall Street: nearly 180,000 Wells Fargo customers in Arizona alone who had fake accounts opened in their name, military servicemembers who are in no position to arbitrate small claims while fighting overseas, millions of consumers whose personal information was stolen in the Equifax data breach, and countless others whose stories will never be told because arbitration takes place in secret – hidden from authorities who could put a stop to financial rip-offs and abuses.

It’s telling that neither McCain nor Flake spoke on the U.S. Senate floor during the debate to defend their votes. Their silence speaks volumes. Ultimately though, it’s their actions that count.

McCain, Flake, Pence and Trump’s Cabinet of big bank alums are moving in lockstep with Wall Street’s agenda – one that couldn’t be further from Trump’s populist campaign trail rhetoric. It’s an agenda that includes rolling back vital consumer protections like the arbitration rule, wiping away commonsense reforms put in place after the 2008 financial crisis that would prevent another economic meltdown and tax giveaways to big corporations and the superrich.

No matter how often they have criticized the president’s offensive behavior, McCain and Flake appear to be fully on board with Pence and Trump’s Wall Street agenda.

Are you?

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Corporate America Must Fess Up About Its Political Spending

In a political environment teeming with corporate giveaways, politicians’ reliance on huge donors to get and remain in power and a president steeped in potential conflicts of interest, it is more important than ever that the U.S. Securities and Exchange Commission (SEC) issue a rule requiring all public companies to disclose their political spending.

Unfortunately, Republicans in Congress are using the federal budget process to stop this from happening. Funding for the government runs out at the end of September, and — even by the tumultuous standard of recent years — the budget process in Congress is in disarray. The process for fiscal year 2018 is already off to a late start, and, making matters worse, Republicans in on the House side are now trying to sneak policy riders that would not otherwise pass into the must-pass budget bills.

This week, the House Appropriations subcommittee on financial services and general government released its budget draft, which includes a harmful policy rider that stops the SEC from working on or finalizing a rule that would require corporations to tell us how they spend money in politics.

That’s right. There is a way to bring attempts by corporations to influence our politics out of the shadows, but Republicans in Congress are trying to avoid traditional debate over the subject and sneak a policy to stop it under the public’s radar. In recent years, the petition calling on the SEC to issue the corporate political spending disclosure rule received a record-breaking 1.2 million public and investor comments. Five state treasurers, a bipartisan group of former SEC chairs and commissioners, and numerous institutional investors and foundations are part of the cadre weighing in and supporting such a rule.

Corporations are also directly feeling the pressure to be upfront about their political activities. Shareholders have been filing resolutions at major companies asking them to disclose their election and lobbying spending every year for more than a decade. Corporate political activity is one of the key areas of focus for all shareholder proposals with more than 100 resolutions filed on the topic this year alone.

Companies are hearing these calls from shareholders and they are increasingly disclosing this information. Prior to 2010’s wrongly-decided Citizens United ruling, a mere 20 percent of S&P 500 companies provided some level of transparency regarding these expenditures. Seven years later, companies have responded to shareholder demand and now more than 66 percent of the S&P 500 discloses this information.

In Citizens United, the Supreme Court falsely assumed that corporate political spending would reflect shareholder interests. Writing for the majority opinion, Justice Anthony Kennedy said disclosure of corporate political spending provides “shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” In reality, shareholders at most public companies don’t even know how their money is being spent in politics, let alone which candidates and causes the corporation supports with their invested money.

The increasingly messy budget process has led to showdowns over appropriations and poison-pill policy riders that contribute to Washington gridlock. Americans deserve to see all inappropriate policy riders stripped from the 2018 budget and to see a Congress that legislates again. In particular, the rider impeding the SEC from finalizing the political spending disclosure rulemaking should be removed so that the SEC can move forward with a critical rulemaking both investors and the American public want.

Lisa Gilbert is vice president of legislative affairs at Public Citizen, an organization dedicated to ensuring that all Americans are represented in government.

Rachel Curley is democracy associate with Public Citizen’s Congress Watch division.

This post originally appeared on The Hill.

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The New Power in DC is Outside the Beltway

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There’s a new power in town, and it is Indivisible. From my perch running the legislative team for Public Citizen, a 45 year old organization dedicated to taking on corporate power, the energy of newly engaged citizens taking to the streets, talking to their senators and Members of Congress, and speaking publicly and loudly about their concerns is palpable.

And it’s impactful.

At Public Citizen, our tagline is that we are the people’s lobbyists, working to protect health, safety, and democracy on behalf of Main Street Americans. We represent our membership—regular people who can’t come to Capitol Hill to lobby their representatives to counter the corporate special interests seeking favors, tax breaks, and special treatment for the richest and most powerful—and who depend on us to do so on their behalf. We’re a policy shop in DC, but our legislative efforts work because of who we represent—voters—and what that means to Members of Congress. Through that lens I can say with absolutely certainty that the charged energy that Indivisible groups have brought into the policy fray is making a difference in our leverage, and in those lobby meetings.

For a Hill observer, it’s obvious that Members of Congress are waking up to the realization that if they don’t support what their voters are calling for, there will be consequences at home. And while we’ve always been able to organize our own members, the bigger momentum that is mobilized and moving nationwide right now feels different, and elected officials know it.

In Ezra’s first blog, he talked about the grassroots pressure Indivisible chapters brought to bear to help save the Office of Congressional Ethics (OCE) at the beginning of this Congress. Public Citizen has long done the wonky work here in Washington to make the case for the OCE (we were involved with standing it up after the Jack Abramoff scandal), and each Congress we have had to defend the unpopular ethics watchdog from being written out of the new Congress’s rules package. (Unsurprisingly, Members of Congress REALLY don’t like an independent ethics office watching their actions and spurring investigations.)

This year, the GOP was sneakier than in the past, and thought that the distraction of the tumultuous recent election, coupled with calling for more subtle changes (tweaks to the OCE’s power, rather than just writing it out of the rules), would allow them to finally undermine the Office. However, we in DC were on alert, and you in the field were powerful, and that combination caused them to fail. We protected an entity that is sorely needed to drain our swamp, and proved that this sort of inside the beltway/outside DC cooperation is exactly what we need to win. And to keep winning, the partnership between your groups on the ground in states and organizations like ours pushing and prodding lawmakers here in DC needs to grow even stronger.

The synergy between Indivisible groups and DC advocates has made a difference on issues from calling for Trump’s tax returns via the discharge petition forcing a floor vote on the Presidential Tax Transparency Act, to pushing back on the attempt to taking health insurance from millions, to calling for a budget that actually funds critical programs and doesn’t attach poison policy ridersto undercut public protections.

Taking that last example, Democratic appropriators were able to keep more than 160 ideological policy provisions that would have undercut the safeguards that protect our air, water, lands, financial system, women’s health choices and more out of this year’s FY17 omnibus budget deal, and they were bolstered and championed to do that by state interactions with constituents during last recess working in partnership with DC public interest lobbyists. The people power of grassroots has moved the needle on all of these debates and made caving to corporate lobbyists really uncomfortable for Members of Congress.

So we can’t let up—the big fights in DC are going to keep on coming, and the power to win will remain with all of you. At Public Citizen we are looking forward to the joint fight (and the wins) ahead!

This post originally appeared on Indivisibleguide.com.

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