The image that stuck with The Watchdog this week was the guy President Donald Trump sent in to start the wrecking ball at 1990 K Street NW in Washington, D.C. He carried a shopping bag filled with Dunkin' Donuts.
The guy was Mick Mulvaney, the White House budget adviser, sent by Trump to take a second job.
The address is headquarters of the U.S. Consumer Financial Protection Bureau. Mulvaney is the appointed acting director. He replaced an Obama appointee.
Mulvaney is like a virus, coming in to get everyone sick. He called the one arm of the federal government most aggressively going after crooked financial institutions a "joke ... in a sick, sad way."
Now he's running it. That's the joke here, sort of like putting Rick Perry in charge of a department he wanted to cut (Energy), or making Scott Pruitt, the anti-tree-hugging Oklahoma attorney general, the big boss at the Environmental Protection Agency. Elections do have consequences, but this is fox-guarding-the-henhouse crazy.
Back to the doughnuts. Mulvaney is going to gut the innards out of the consumer bureau, but he's going to do it in an orderly way.
"Rumors that I'm going to set the place on fire, or blow it up or lock the doors are completely false," he announced to reporters while presumably on an afternoon sugar high.
He quickly pleased almost every banker and mortgage lender in the nation by ordering an immediate hiring freeze and activity freeze. Those new financial rules in the pipeline will have to wait.
Wait maybe forever.
That's why I love the doughnuts. Such an unexpected touch. The Republican walking into a hotbed of Democrats with doughnuts, and not just a box, but a shopping bag, mind you.
Too much at stake
Hey, everybody, gather around. Even though I'm going to destroy you, have a Boston Kreme.
But you can't sugarcoat this. Consumer protection in the biggest way is at stake.
If you have a mortgage, a credit card, a bank account, a loan, the work of the consumer bureau affects your life.
If you spend money, borrow money, love money, hate money, it doesn't matter. The bureau is in there kicking up dust to make sure the companies that take your money don't cheat you any more than many of them already do. Not to surgarcoat anything here.
Do you believe someone should have a firm hand on the necks of banks, mortgage companies, payday lenders, college loan lenders and others who tend to overdo it when they can? Or not?
The protection bureau isn't perfect. It has no oversight in any significant way. The only real oversight is the court system (and judges have already curtailed the bureau's independence in significant ways).
That independence is by design. The creators knew vultures would eat it alive, so they pushed its funding outside of Congress and into the hands of the more independent Federal Reserve.
The Watchdog believes that regulations on medium and small community banks should be eased. They didn't deliver the 2008 crash to our doorstep.
Critics hate that the bureau has one strong leader, and is not run, as are most commissions, by a board of several. That strong leader model will come to haunt it now that the doughnut man is on the inside. (My prediction for the next permanent head? Why not retiring U.S. Rep. Jeb Hensarling, R-Dallas, who hates the bureau more than Mulvaney?)
Basic facts: 30 million Americans received $12 billion in refunds and contract cancellations after the 6-year-old bureau got involved in their cases.
The bureau worked to get $120 million in refunds for military families by policing mortgages, credit cards, student loans and other financial products aimed at them.
The bureau fined Wells Fargo $100 million for unethical and illegal practices.
The bureau went after crooked bill collectors, check cashing businesses, payday lenders and credit repair services.
The bureau forced three major credit bureaus to make it easier to submit corrections to your credit report.
My favorite tag by the bureau? Remember those reverse mortgage TV ads starring Tom Selleck and actor/U.S. Sen. Fred Thompson? The bureau fined American Advisors Group $400,000 for those misleading commercials. What would Magnum, P.I. think?
The bureau runs a website that accepts comments from anyone about a financial institution, good and bad. The complaints aren't verified, yet they're posted. How long do you think that baby will shine online? Check it out before they kill it here at consumerfinance.gov/complaintdatabase/.
I love my doughnuts as much as anyone. But taking a bite out of this guy's shopping bag doughnuts is like taking a bite of fruit from the forbidden tree. The dismantling of the U.S. Consumer Financial Protection Bureau is painful to watch.
Staff writer Marina Trahan Martinez contributed to this report.
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