The CFPB: No More “Pushing the Envelope”

by Vedder Price

Metal Gears with RegulationsOn January 23, 2018, Mick Mulvaney, Acting Director of the Consumer Financial Protection Bureau (the “CFPB”), published an opinion editorial in The Wall Street Journal (the “Op-Ed”) describing his vision of the CFPB’s role in regulating the financial services industry. The Op-Ed struck a clear and contrasting tone from that of his predecessor, Richard Cordray, in declaring that the CFPB will no longer “push the envelope.” Specifically, Mr. Mulvaney provided his vision relating to three areas of current CFPB operations.

  1. Regulation through enforcement is dead. Mr. Mulvaney has declared “regulation through enforcement” is dead, and that financial institutions can expect “more formal rule making and less regulation by enforcement.” Mr. Mulvaney philosophized, “[a]fter all, it seems that the people [the CFPB] regulates should have the right to know what the rules are before being charged with breaking them.”
  • As we noted in an earlier post, over the past seven years the CFPB has pursued enforcement actions against a wide range of consumer financial services providers. In bringing many of these enforcement actions, the CFPB has relied upon its discretionary Unfair, Deceptive, or Abusive Acts and Practices (“UDAAP”) powers. At the same time, the CFPB has left undefined the meaning of a UDAAP. Without official guidance from the CFPB as to the meaning of UDAAP, critics of the CFPB have alleged that financial institutions are left trying to interpret each enforcement action taken and its possible application to their own operations. With Mr. Mulvaney’s Op-Ed, it appears that the financial services industry may no longer have to play a continuous guessing game with the CFPB as to when and where enforcement actions will be taken.
  1. Enforcement only where quantifiable and unavoidable harm to consumer. If the CFPB will no longer seek to regulate the financial services industry through enforcement, the next reasonable question is when will the CFPB seek to utilize its enforcement powers? Mr. Mulvaney clarified that, in bringing an enforcement action, the CFPB will focus on the “quantifiable and unavoidable harm to the consumer.” For instance, the Op-Ed noted that in 2016 almost a third of the complaints to the CFPB related to debt collection, and only 0.9% related to prepaid cards and 2% to payday lending. In a definitive tone, Mr. Mulvaney stated that “[d]ata like that should, and will, guide actions.” Consequently, where there is not a clear quantifiable and unavoidable harm to the consumer, the CFPB may not direct its resources to that area.
  2. The CFPB’s rulemaking will be guided by measurable and quantifiable cost-benefit analyses. Pursuant to the Dodd-Frank and Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the CFPB is required to “consider the potential costs and benefits to consumers and covered persons” prior to finalizing any rulemaking. Mr. Mulvaney described that, to his understanding, the Dodd-Frank Act requires the CFPB rulemaking decisions to be driven by a “quantitative analysis,” and while qualitative analysis also plays a role, qualitative analysis should not be to the exclusion of measurable costs and benefits.

In ending his Op-Ed, Mr. Mulvaney declared in somewhat dramatic fashion that the CFPB has a new mission. “[The CFPB] will exercise, with humility and prudence, the almost unparalleled power Congress has bestowed on us to enforce the law faithfully in furtherance of our mandate. But we go no further. The days of aggressively “pushing the envelope” are over.” To many in the financial services industry, this “new mission” is welcomed.

Dramatics aside, it is our belief that the financial services industry can expect a complete reimagining of the CFPB in 2018. Since Mr. Mulvaney’s appointment as Acting Director in November 2017, we have already seen various actions taken towards this end.

  • On January 31, 2018, the CFPB issued a Request for Information (“RFI”) on how the benefits and impacts of the CFPB’s use of administrative adjudications, and how its existing process can be improved. The purpose of the RFI was to ensure that its administrative adjudication process, as currently utilized, is fulfilling its proper and appropriate function of protecting consumers.
  • On January 23, 2018, the CFPB issued a RFI on how the CFPB has issued civil investigative demands (“CID”). The CFPB noted that comments received in response to this RFI will help the CFPB evaluate existing CID processes and procedures and to determine whether any changes are warranted.
  • On January 16, 2018, the CFPB published a call for evidence regarding the CFPB’s functions. The stated purpose of the call for evidence was to critically analyze the CFPB’s operations and to see that such future operations are properly aligned with the CFPB’s statutory purpose.
  • On January 16, 2018, the CFPB issued a statement on Payday, Vehicle Title, and Certain High-Cost Installment Loans (the “Payday Lending Rule”). In issuing the statement, the CFPB announced that it intends to engage in the rulemaking process so that the CFPB may reconsider the Payday Lending Rule.
  • On December 21, 2017, the CFPB issued a Statement on the Home Mortgage Disclosure Act Rule (the “HMDA Rule”). The purpose of the statement concerning the HMDA Rule was to announce that the CFPB (i) did not intend to assess penalties for errors in data collected in 2018 and (ii) planned on starting the rulemaking process to reconsider various aspects of the HMDA Rule.

To view the full text of the Op-Ed, click here.

To view the full text of the CFPB’s RFI on its administrative adjudication process, click here.

To view the full text of the CFPB’s RFI on CIDs, click here.

To view the full text of the CFPB’s Call for Evidence Regarding CFPB Functions, click here.

To view the full text of the CFPB’s Statement on the Payday Lending Rule, click here.

To view the full text of the CFPB’s Statement on the HMDA Rule, click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Vedder Price | Attorney Advertising

Written by:

Vedder Price

Vedder Price on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.