ELIZABETH WARREN UNITED STATES SENATE WASHINGTON DC 2051~2105 P; 202 224-<1543 MASSACHUSETTS COMMJnCES BANKING, HOUSING, AND URBAN AFFAIRS HEALTH, EDUCATION, LABOR, AND PENSIONS CJanitcd ~rates ~rnatr ARMED SERVICES 2400 JFK FEDERAL BUILDING 15 NEW SUDBURY STREET BOSTON MA 02203 p 617- 565-3170 1550 MAIN STREET SUITE 406 SPRINGFIELD, MA 01103 P· 413 788 2690 SPECIAL COMMITTEE ON AG ING April 26, 2018 www warren.sen1te.gov Mick Mulvaney Director Office of Management and Budget 725 1?1h St. NW Washington, DC 20503 Dear Mr. Mulvaney: I write regarding your recent admission that, as a Member of Congress, you withheld or offered lobbyists access based on their financial contributions to your campaign. I would like to know how those same financial contributions have affected the official decisions you have made since you assumed control of the Consumer Financial Protection Bureau (CFPB). While speaking before a group of 1,300 bankers and lobbyists at an American Bankers Association conference on April 24, 2018 , you stated: "We had a hierarchy in my office in Congress .... Ifyou're a lobbyist who never gave us money, I didn't talk to you. If you're a 1 lobbyist who gave us money, I might talk to you." That admi ssion reminded me of a response letter you sent me just weeks ago. In January 2018, l joined Representative Maxine Waters in asking you about your delay and re-evaluation of a CFPB rule protecting consumers from abusive payday lending practices. We expressed concern that your decision could be "connected to the nearly $63,000 in campaign contributions that payday lenders gave to [your] campaigns." 2 In February 2018, you responded to our letter, ignoring several specific questions about your actions and instead expressing offense at the mere idea that financial contributions might influence your official decisions: I reject your insinuation ... that my actions as Acting Director are based on considerations other than a careful examination of the law and facts particular to any matter ... Civil di scourse rests upon our reciprocal understanding that no matter how strongly we may disagree on matters of policy, we are motivated by principle and our mutual desire to serve the American people to the best of our abi lities. 3 I attach a copy of your February 20 18 response to th is letter. 1 Glenn Thrush, "Mulvaney, watchdog Bureau's Leader, Advises Bankers on Ways to Curtail Agency," New York Times (April 24, 2018) (online at https: 11\ \ ww.nvtimc~ .co m '20 1 8/(J . lf24 'us'mulva11ey-consumcr-financial-pro1cc1ion- burcau.html). Letter from Senator Elizabeth Warren, Representative Maxine Waters, et al., to Acting CFPB Director Leandra English and OMB Director Mick Mulvaney (Jan. 31 , 20 18) (!.illQs: \\\\'v\.wam·n.scnatc.gov files/docu ments 2018 01 3 1 Warren Waters lcuer.Qill). 3 Letter from Mick Mulvaney to Senator Elizabeth Warren (Feb. 15, 2018). 2 Now t11at you have admitted that financial contributions - rather than solely "a careful examination of the la\v and facts" or •·principle" - affected your decisions as a Men1ber of Congress, I believe you owe the public straight ans\vers to the qttestions posed in the January 2018 letter on the payday rule. Your recent admission also raises questio11s abottt your other official actions at the CFPB. For example, in tl1e same speech at the Atnerican Bankers Association conference, you expressed your intention to ren1ove t11e public nan·atives fron1 the CFPB's co1nplai11t database. That 1nove \Vould allow financial companies to hide scams - even widespread sca1ns - fron1 potential customers, prospective business partners, and researcl1ers. It would also weaken a tool tl1at l1undreds oftl1oltsands of Ai11ericans have used to quickly and easily resolve complaints \Vith 4 financial companies. Over your last three terms in the U.S. I-louse of Representatives, the A1nerican Bankers Association (ABA) PAC \Vas one of your top can1paign contributors, investing $32,500 i11 yottr ca111paigns. 5 The ABA has consistently advocated for hidi11g the public nmTatives in the consumer co1nplaint database, 6 and its me1nbers applauded your announcen1ent at ll1e recent conference. 7 The Credit Union National Association PAC -which contribltted $30,000 to your 8 congressional campaigns - has also publicly opposed the database. Furthern1ore, you announced in December 2017 that you \vould postpone a n1le related to the t-Iome Mortgage Disclosttre Act (i"IMDA). 9 I-IMDA requires financial institutions that provide l1ome mortgage loans to report to CFPB on who tl1ey lend to and on \vhat terms, allowit1g the govern1nent and tl1e public to expose mortgage lenders with patterns of ~Glenn Thrush, "Mulvaney, watchdog Bureau's Leader, Advises Bankers on Ways to Curtail Agency," Neiii York Ti111es (April 24, 2018) (on line at hit.fl~: \V\\"\v.nstin1cs.co1_n 20! 8 04 2.t ·u~:n1uh anc_)_ -con~un1er-_fi nn1_1cia l:p1~ot_e_c~_i~1_n­ hu1·e_,1u.htn1I). See OpenSecrets.org, ·'Rep. Mick Mulvaney- South Carolina: Contributors 2009-2016" (on line at htlj1~: \\ \~- \\ .n_Jlo;n~ccrct~.lll];_ n1er_nh_e_r~-o_f-CQ_llg[e~~ _con!rihu!11r~'-'c id _L\:UOO~_l__:l-_L2L~C_)__c_l_e_J.~6Jit,l-'_!{_8-:.j_)__pc_ I); See Federal Election Com1nission Catnpaign Finance Data. 6 Letter fro1n Consumer Bankers Association and the American Bankers Association to the Bureau of Consumer Financial Protection, re: Co1nn1ent Request on the Proposed "Consumer Response Co1npany Response Survey" (Scpte1nber 30, 2016) (on line at !H1P_.,: -\\:\\ \\_.co11sun1erii_n_ance_1_1_19ni].~l_L_c_o~J!:C~11).teJ1l.uJ1 lqad".' ?.i!C:-i. J_-+_2QJ 6 I() ·cJ: ('Fl' Il-_( ·on.,_u n_i~_r_,':itJrv_e_l 20_1_6 ,_p<[ !). 7 Francine McKenna, "Mulvaney: CFPB doesn't have to run a "Yelp" for bank custo1ners," MarketfVatch (April 25, 20 18) (on line at [lttps: _I\ \I 1\. 1n_t1rkct~\alch.clHll _..;101}:_J}lUl\_any1~c_tliJ1~~hi_esnt_-l1~1yq~Lo_-1Jl!l:2l_:l_~lfl:_(("!_i:_:Pqn!i_: c_u ..101n er.,_- 2 OL8_:l!..!- 2.t ). 8 Letter fro1n Credit Union National Association to the Office ofManagen1ent and Budget, re: Sub1nission for OMB Review-General Infonnation Collection Plan for Consumer Cornplaint and lnfonnation Collection System (Dece1nber 20, 2017) (online at http:-.: \\ \\ 11_.cunc1,1H:g__ uplo(l_de_c_I F)_le~ 1\dvncac.;. l'rinritte~_8-c_n11l\' in_g__Ban:icr~_l3loe:- ~icn_cric~c~_f)ln l(~1:1nat.io1i 0-h2_0_C Q_l lt::cti(lll" "20/llan" o20fnr 0 n2{~( ~on..;u_l11('l'"_ f,_2()('on1plainl" o2{/anQ~,~~01n forn1ation' 1o2Jlt\1l le_c_ti~ll)u·51_2Q~ ~ti;1n_~' 020( ~01_11111 cnLpdt). 9 Kate Berry, "CFPB to reopen niortgage disclosure rule, will not penalize data errors," A111erican Banker (Decen1ber 21, 20 17) (on line at htt_ps: _\1 \l_\\_._n1n_eri_i.:_nnba_ril,er.\\lll1 nc11 s cl_Pb:tn-r_eQ_p_e_11-l11u_tla_~rt_!_le_-1> i 11_-not: pc11n_l 1zc-datn~cn\11> ). 5 2 discriminatory lending. 10 Dodd-Frank directed the CFPB to expand the types of data collected under HMDA, and tl1e CFPB issued a ii.de "requir[ing] financial institutions to collect and repo1t additional mortgage information beginni11g on January 1, 2018.'' 11 Instead of e11forcing the law as Congress laid out in Dodd-Frank, under your leadership, the CFPB annotinced that it does "not intend to assess penalties for en·ors in data collected in 2018" and "plans to reconsider aspects of [its] mortgage data rule" 12 - a move that has been described as a "big win for t11e mortgage industry." 13 The ABA, wl1ich has attacked the HMDA rule, was no doltbt p\eased. 14 111 addition, you l1ave take11 steps to gut the CFPB's Oflice of Fair Lending and Equal Opportunity (OFLEO). 'fhe Dodd-Frank Act directed the Bureau to create the OFLEO to provide "o\'ersight and enforce111ent of Federal laws intended to e11sure the fair, equitable, and nondiscri1ninatory access to credit for both individuals and co1111nunities that are enforced by the Bureau." 15 OFLEO's nlandate includes preventing lenders fron1 discriminating against bo1Tovvers based on their race, and it has take11 action against financial institutions that discrimi11ated on rates for credit cards, 16 111ortgagcs 17 and auto loans. 1& Yet in February 2018. )'OU stripped OFLEO of its enforce1nent authority, effectively neutering its ability to ensure that financial institlttio11s are complyi11g with fair lending Iaws. 19 1°Consu1ner Financial Protection Bureau, "About HMDA" (on line at htJps: \'v \\ \\ ,con~u111l'rfina11(.:~'._g_o\ datal'\'~y:.ir..:11 h111da _l~qrn-1)1~>rc ). 11 Consumer Financial Protection Bureau, "CFPB lssues Public Statement On l·lome Mo1tgage Disclosure Act Co1npliance" (Decen1ber 21, 2017) (online at https://\vww.consu1nerfinance.gov/about-us/newsroo1n/cfpb-issuesf:ub!ic-staten1ent-home-1nortgage-disclosure-act-con1pliance/). 2 Consumer Financial Protection Bureau, "CFPB lssues Public State1nent On Haine Mortgage Disclosure Act Co1npliance" {Dece1nber 21, 20 l 7) (on line at htlll\: I-\ \I\\ .c\1n~u111erllntlnCI.' .g,ov abnuJ-ll'.> 1_lL'\\$1:001_11·c(ph~i:.sue~_: p[tb Ii c-~ tat l.'Jll cnt-ho1 ne-n1o_n_g_a_g__c-cl i_~c Iosu_rl.'-acl-c_1 in111 Ihu)ce J; 13 Kate Berry, "CFPB to reopen mortgage disclosure rule, 1vill not penalize data en·ors," A111erican Banker (December 2 l, 20 J 7) (on!ine at http~_: \\'\\~\\ .al1)Cl:ic;111bankl'LC•ll1_1 11C\\ ~ Cli1b-lo-reo_pcn-hn1Ja~ruJe-11· ill-JIOl~ pen a Ii1e-data -e_rror~). 14 ·rhe Ainerican Bankers Association, "HMDA: More Really Is Less: The Data Fog Frustrates HMDA.' (April 20 l 7) (on line at bttps:__J,'!:_ \\_ \~ .ab:.i.l;_•.JITI ~·"-_\l.'!:llt;ac_), !~ocu1nen1~ I 1:\1 L)t\)Vhitt:i)1_£1er20_Ll.J)sll:.:_ _g__ ne1\ ~ruo1n c!l)b-takc~-a_c1ion-ag<1in_~t-11cn_iu11star-1non_g_;l£__e: llil\1 cJ-_111qrtg<1g_l.'-loan-rcpt1r! in_g_ ). 18 Renae Merle, "Trurnp administration strips consuiner \\'atchdog office of enforceinent powers in lending discrimination cases," ffashin,rr1on Post {February 1, 2018) (on!ine at htlp\: 1\ \1 \V ._11_ a~hi 11gtonp•l\t_c,11n nc1-1 s bu\1nc\~ 1_\j)_ 2(J J 8_ (12 O_! tru1n_p-adn1in i"tration-strip~-ct~n~_tJ1n~r-~1_at_ch~ltig­ t 1lli ct:-n l~en for ct: 1ne11 l- po 1vcr\-ag_a i ll\I -IInanc_ia 1-_ll_nn \-in - l~'_nd i ng-J i ~cri 1n in at ion: case~ -·Jnor~·Jircct onkut1n_ lcnn .207cfS_-l-17 1_2 I ). 19 Renae Merle, "'fnJJnp adn1inistration strips consuiner watchdog office of enforceinent po1vers in lending discriinination cases," 11'ashington Post {February I, 2018) (online at hill\~: 1i,__ \-\ 1-1-_. \\~ashin_gton11J1"t.-son1 nc11 ~ bu:-.ine~~ 11-11_20_18 02_ '(_) l Jrt_Ll,111)-adini.ni~lral io11-:;trips_-_crt!_l~l_!lllIT-~\__<1t_chJ.~1g,­ ofli ce-of::.;n tlirc_e111cnt-p~1 .1-1 .cr>~aga in~\_- rina_n~_ ial_- t1 nl}_ \-_[11:" l)"_nd i ng_-d .i ~.cri 1n i nation Cll\C~ '.'noredire_ct o_n&ut1n_lcrrn _.2fl7cl"S-1_-l 7 12_1_). 3 Members of the National Automobile Dealers Association (NADA) long opposed CFPB' s actions to curb discrimination in auto lending and would benefit from reduced fair lending enforcement. 20 The NADA PAC happens to have donated $30,000 to your political campaigns. 21 Almost every one of your major decisions at the CFPB has fulfilled a request of a lobbying organization that has donated tens of thousands of dollars to your political campaigns. The public deserves to know whether this is a coincidence or is a reflection of the same kind of "hierarchy" you created when you ran your congressional office. Accordingly, I ask that you provide me with answers the following questions: 1. Public reports of your April 24 comments indicate that you said, "We had a hierarchy in my office in Congress ... .If you're a lobbyist who never gave us money, I didn't talk to you. If you're a lobbyist who gave us money, I might talk to you." Were these reports accurate? 2. Do you retain this policy at CFPB? Do you have a hierarchy that favors lobbyists that have contributed to your congressional campaigns or to any other campaigns? 3. Do any of your staff at CFPB have a hierarchy that favors lobbyists that have contributed to your congressional campaigns or to any other campaigns? 4. Please provide copies of any documentation, including email or other correspondence, which refers to campaign contributions from lobbyists and their access to or ability to meet with you or your staff. I ask that you provide me with answers to these questions no later than May 11, 2018. Please do not hesitate to reach out to Bharat Ramamurti or Julie Siegel of my staff at 202-2244543 if you have any questions. Sincerely, d States Senator 20 National Automobile Dealers Association, "Congress is Urged to Pass SJ .Res. 57 to Preserve Consumer Discounts on Auto Credit" (Online at: https:!/www.nada.org/cfpb/). 21 See OpenSecrets.org, "Rep. Mick Mulvaney- South Carolina: Contributors 2009-2016" (online at htrp:; ://ww\v .opensecre t s.org/t nembcrs-ot~congress/contributors?ci d "' N000314 1 2&cvcl c -C AREER&tvpe= l); See Federal Election Commission Campaign Finance Data. 4 cf Consumer Financial Protection Bureau 1700 G Street NW. Washington, DC 20552 February 15, 2018 The Honorable Elizabeth Warren United States Senate 317 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Warren: I write in response to your letter dated January 31, 2018, concerning three unrelated actions taken by the Bureau of Consumer Financial Protection concerning small-dollar consumer lending. I reject your insinuation - repeated three times in as many pages - that my actions as Acting Director are based on considerations other than a careful examination of the law and facts particular to any matter. Civil discourse rests upon our reciprocal understanding that no matter how strongly we may disagree on matters of policy, we are motivated by principle and our mutual desire to serve the American people lo the best of our abilities. Prior to receiving your letter, I never would have thought to consider, for instance, whether your vote against repealing the Bureau's arbitration rule was influenced by campaign donations you may have received from trial lawyers or other parties who stood to gain financially from the rule. Perhaps I should reconsider. Instead, shall we agree that such accusations are baseless and discuss policy matters as responsible officers holding a public trust? I await your response. Acting Director consumerfinance.gov