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Changes being made at the Consumer Financial Protection Bureau

Since its creation in 2011, the Consumer Financial Protection Bureau has been working to protect consumers' interests in the financial sector. Its new director has been making apparently substantial changes.

Whatever your politics, you should know what those changes are and what they may mean.

Mick Mulvaney was named head of the CFPB in November. Since then, Mulvaney has made some controversial moves:

First, he rewrote the agency's mission statement. The original mission statement said, "the Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives."

At Mulvaney's direction, that mission statement was changed to, "the Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations; by making rules more effective; by consistently enforcing federal consumer financial law; and by empowering consumers to take more control over their economic lives."

While that seems to change the focus of the agency's work, be aware that the CFPB's statutory mandate already contains similar language. That statutory mandate describes the purpose and objectives of the agency as set up by Congress and serves as the agency's legal foundation. Changing the mission statement may have psychological implications, but it does not change the legal requirements the agency has to follow.

Second, Mulvaney put a temporary hold on or permanently halted some enforcement actions that had been initiated by the previous administration. For example, he ended one against the lender World Acceptance, a former Mulvaney campaign donor.

He did strip enforcement powers from a division of the CFPB called the Office of Fair Lending and Equal Opportunity. This has potentially larger implications.

He has also reversed course on some agency rulemaking activities. For example, he announced that the CFPB will reopen the rulemaking process on what is called the "payday rule," which would have required some lenders to verify that borrowers could afford their loans. It is unclear what changes might be made to that rule.

Finally, you may have heard that he requested no funding for the agency from the Federal Reserve, which funds its activities. He did not zero out the agency's funding, however. He simply did not ask for funding for the upcoming quarter because the agency had more in reserves than its estimated quarterly expenses. Those reserves will be used to fund the agency for the quarter.

Ultimately, whatever happens at the CFPB, consumer law advocates will still be here to fight for consumers' rights in the financial sector and beyond.

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