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The Cost of the CFPB Name Change

posted by Adam Levitin

Mick John Michael Mulvaney's wanted to change the CFPB's name to the Bureau of Consumer Financial Protection (BCFP), and indeed, the Bureau has already changed its signage and the name it uses on some of its communications.  But the name change has not had full effect yet, and it is now reported that it would not only cost the CFPB more than as much as $19 million, but it could cost regulated firms as much as $300 million.  

It's worth comparing that $300 million cost to industry for Mulvaney's vainglorious renaming project to the funds that the Bureau has recovered from wrongdoer's on Mulvaney's watch.

Since Mulvaney has been in control of the Bureau, it has assessed $513.45 million in civil monetary penalties and $373.572 million in consumer restitution orders.  Those numbers, however, are entirely driven by the $500 million civil monetary penalty assessed on Wells Fargo and a $335 million restitution order for Citibank.  (Take out those two cases and the Bureau has had only $13.45 million in civil monetary penalties and $38.572 million in restitution under Mulvaney's watch, that is less than the cost of operating the Bureau.). If regulated firms are going to cough up $300 million, couldn't there at least be some consumer protection benefit for that kind of price?   

I've previously remarked on the irony of a man who goes professionally by a nickname insisting on a regulatory agency using its formal statutory name. But now we have a new layer of irony:  a man who professes to believe in small government and reduced taxes will impose a substantial cost on regulated firms in order to make a point about faithful adherence to statutory directives.  Hypocrisy has never been in short supply in Washington, however.

What makes Mulvaney's hypocrisy here particularly galling is that he isn't even being faithful to the statutory language.  The Dodd-Frank Act does say that the Bureau shall be known as "The Bureau of Consumer Financial Protection," but the very same legislation also refers to the agency as the "Consumer Financial Protection Bureau" in the context of a provision changing the composition of the board of directors of the FDIC.  Does this mean that when Mulvaney acts as an FDIC board member he will wear his CFPB hat, rather than his BCPF hat out of faithfulness to the statute?  Or does it mean that he will not serve on the FDIC board because the Director of the BCPF is not on that board, but rather someone else called the Director of the CFPB?  The silliness of the whole matter is manifest. Mulvaney has elevated the symbolism of faithfulness to the agency's name (which is really a puerile move to stick it to supporters of the Bureau's mission) over the more important faithfulness to the agency's statutory mission.  



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