With leadership of the Consumer Financial Protection Bureau resolved
by a federal court, the banking industry is eager to find out what interim head Mick Mulvaney plans to do once he gets his arms around the controversial agency.
Mulvaney, who is also the director of the Office of Management and Budget, has pledged to change direction
at the CFPB, focusing less on new rules and more on easing access to credit.
He has already instituted a 30-day hiring and policymaking freeze and is reviewing all rules and guidance, as well as pending enforcement actions and investigations. Though he has acknowledged that some final rules like the small-dollar payday lending rule are beyond his authority to change in the short-term, many in the industry believe otherwise and are gearing up to encourage him to change effective dates and reopen old rulemakings.
The task ahead for Mulvaney will not be easy or quick, however.
"An administrative agency can't just repeal rules that are in effect by fiat, and it can't ignore what Congress has instructed it to do," said Warren Traiger, senior counsel at Buckley Sander. "An agency can't just declare rules void; it needs to go through the same rulemaking process to amend or negate what's out there, and that process has to withstand the standard of not being arbitrary or capricious."
The mortgage industry in particular wants clearer guidance from the CFPB on a host of mortgage regulations mandated by the Dodd-Frank Act. The bureau is required to review some of its rules within five years after they take effect, which presents Mulvaney and the industry with an opportunity to change course.
"There will be tweaks to the rules overall, and opportunities for modifications to adjust issues of concern for the industry," said Quyen Truong, a partner at Stroock & Stroock & Lavan, and a former CFPB assistant director and deputy general counsel. "Overall it would take some time before any major changes are made to the existing rules or new rules or guidelines are adopted. I don't think that there will be major actions right away; there will be gradual modifications."
Following are five key questions now that Mulvaney is solidly in charge: