CFPB Emerges From Trump Storm Battered But Intact


The federal government is filled with anonymous civil servants who spent the past four years keeping their heads down and doing their jobs while trying to prevent Donald Trump’s appointees from subverting their agencies’ missions. Dave Uejio is one of those civil servants.

Uejio has never worked anywhere but the government, a fact he points to with pride on his LinkedIn page. (“I am obsessed with providing the American people with the world class Federal government they deserve.”) After stints with the Office of Personnel Management and the National Institutes of Health, Uejio joined the Consumer Financial Protection Bureau in 2012. The bureau, just seven months old, brimmed with idealism as it aggressively sought to keep consumers from being taken advantage of by the financial services industry.

Ten months into his presidency, Donald Trump replaced its first director, Richard Cordray, with budget director Mick Mulvaney, a man who once called it a “joke,” in “a sick, sad kind of way.” Mulvaney brought in a handful of fellow travelers, some of whom “shadowed” the bureau’s high-ranking civil servants to keep them in line. When Mulvaney became Trump’s chief of staff, Kathy Kraninger took over. Although she said all the right things about the importance of the CFPB’s mission, “it went from taking on big cases with big stakes to handling smaller, marginal cases,” as one former official put it to me.

By the 2020 election, many of the highest-ranking civil servants had left. But Uejio stayed. And when Kraninger resigned on Inauguration Day, President Joe Biden suddenly needed an acting director until the Senate confirmed his nominee, Rohit Chopra. In one of his first acts as president, Biden chose Uejio.

At 6:30 that evening, Uejio sent an urgent email to the CFPB’s staff. His message was that the agency had to return to its original mission immediately without waiting for the Senate to approve Chopra. He closed with this paragraph:

I know you share my devotion to the Bureau's incredible mission; I am asking you to join me in renewing this commitment to vigorously defending America's consumers. I have seen the Bureau at its best, where direction is clear, staff are empowered, and we work collaboratively to drive the very best outcomes for consumers. I invite each and every one of you to breathe new life into that Bureau, united by a singularity of purpose, and a shared set of values.

In other words, after four years of keeping their heads down, it was time to rev up the engines again.

From the moment the CFPB was created in July 2011 as part of the Dodd-Frank financial reform law, conservatives have been gunning for it. It was, after all, the brainchild of Elizabeth Warren when the Massachusetts senator was a professor at Harvard Law School. The 2016 Republican platform described it as a “rogue agency” with “dictatorial powers unique in the American Republic.” Republicans filed lawsuits against it, hoping to strip away some of the autonomy it had been granted in the Dodd-Frank legislation. (They partially succeeded.)

Career civil servants understand, of course, that new administrations bring new priorities — and that their job is to help carry out the policies of the sitting president, no matter what their own politics. Historically, they’ve done just that. What was unusual about the Trump administration is that he seemed to enjoy installing leadership that worked to actively undermine the agency’s mission. He did the same at a half dozen or more departments, including the Environmental Protection Agency, the Justice Department and the Interior Department.

Cordray told me that before he left, he met with employees, urging them to stay and continue their work. “I told them they were working for the country.”

“Most people stayed,” said David Silberman, the CFPB’s former associate director for research, markets and regulations. “They still wanted to do what they could to protect consumers.”

It wasn’t easy. The agency’s biggest initiative when Mulvaney walked in the door was a rule to restrict predatory payday loans. He watered down the rule and ended a lawsuit against a handful of payday lenders. He folded its student loan division — which had succeeded in forcing lenders to refund hundreds of millions of dollars to injured borrowers — into its consumer education division. Every division head was assigned a “shadow,” someone brought in by Mulvaney who had the authority to overrule division heads — which they did often.

There were all kinds of pressures, some overt and others subtle. Enforcement officials were discouraged from taking on significant new investigations. When the Washington Post discovered some racist social media posts by a Trump appointee, Eric Blankenstein, he asked a subordinate, Patrice Ficklin, to issue a public statement supporting him. Ficklin, the head of the CFPB’s Office of Fair Lending, withdrew her support soon afterward; she later told the bureau’s inspector general that she felt she had to provide the statement to preserve the fair lending program. (Ficklin remains at the CFPB.)

When Mulvaney left to be Trump’s chief of staff, Lisa Donner, the executive director of Americans for Financial Reform, told the New York Times: “The bureau was constructed really deliberately to protect ordinary people. He’s taken it apart — dismantled it, piece by piece, brick by brick.”

But that wasn’t entirely true. The research division continued to crank out reports. With the help of advocacy groups like Americans for Financial Reform, the staff was able to maintain a public database of consumer complaints, which the Trump appointees had wanted to abolish. Although Mulvaney overturned the payday lending rule, he let three other rules take effect. Most important, Trump and his minions simply did not succeed in subverting the CFPB’s core mission.

“In the end,” Cordray said, “Mulvaney had to admit that the CFPB wasn’t going anywhere and that it was going to be an important part of our government. A fair amount of its work went on. Many of the things that were slowed down during the Trump administration can easily be speeded up.”

And if anybody knows how to do that, it’s Biden’s nominee, Chopra. In the bureau’s early years, he ran the student loan division, where he was well known for his aggressive style. At the Federal Trade Commission, where he has been one of two Democrats on the five-member commission, he has written a series of smart, pointed dissents to FTC actions taken by the Republican majority, especially on antitrust issues.

There is renewed enthusiasm among the staff that the bureau can revert to what it was before Trump: fearless about taking on big, important investigations that have the potential to change industry practices. You can bet that payday lenders will be back in the hot seat.

All that will come soon enough. For now, the important thing is that the CFPB made it through the Trump years more or less intact. “Government agencies with longevity survive transitions,” Silberman said. It now has. The CFPB isn’t going anywhere.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."

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