Elizabeth Warren, Mick Mulvaney and the showdown at the CFPB Corral At consumer protection hearing, it was obvious that the sheriff wears the black hat in the banking west world: Our view

The Editorial Board | USA TODAY

In a showdown Thursday over the future of the federal government's consumer sheriff, it quickly became obvious who was wearing the black hat.

Mick Mulvaney, the acting director trying to cripple the Consumer Financial Protection Bureau (CFPB) he now leads, would return the country to the bad old days when banks and other financial outlaws scammed consumers who found themselves outgunned and out of luck.

Sen. Elizabeth Warren, D-Mass., who helped create the CFPB, would save the agency from financial black hats and their Republican allies in Congress so it could keep on recovering money for consumers, just as it has to the tune of nearly $12 billion in the past seven years.

You could call their face-off in the Senate banking committee "Gunfight at the CFPB Corral."

OPPOSING VIEW: Mick Mulvaney is right to reform CFPB

Unloading on Mulvaney for his attempts as a congressman to kill the bureau, Warren ticked off millions in refunds the CFPB has wrung from institutions that scammed bank customers, student loan holders and even 9/11 first-responders.

Among those the CFPB white hats rescued was a Hull, Mass., soldier whose car loan and fees were eating up 60% of his paycheck while he served in Iraq.

If Mulvaney had gotten his way, none of these people would have been helped, Warren concluded. “Is that right?” she asked.

Mulvaney was left to admit that he was a “co-sponsor” of a measure to kill the agency and voted for budgets to eliminate it. But he added that other banking regulators “could have brought the same action” for consumers.

Only they didn’t.

An alphabet soup of banking regulators had the power to help consumers for years, but they never did. While predatory lenders' dangerous no-doc loans proliferated in the early 2000s, those charged with protecting consumers lounged in Washington saloons instead of acting. Their failure to do their jobs helped lead to the 2008 financial crisis, leaving widespread economic destruction in its wake.

That's when the CFPB was born with bipartisan support. Someone needed to pick up the sheriff's star and bring law back to a financial wild west.

But as soon as the fledgling bureau drew its guns — forcing refunds from banks, debt collectors and student loan purveyors; making consumer complaints public in an online database; and trying to regulate payday lenders — all those industries started squealing. And Republicans answered by moving to ride the agency out of town on a rail.

And why not? They have plenty of incentive. The commercial banking industry, which spreads millions in donations around Washington to both sides of the aisle, has long favored Republicans. The 13 Republicans sitting on the Senate banking committee got more than $7 million in commercial bank donations during their careers, compared with $3.9 million to Democrat members. (Warren got a measly $45,000. And Mulvaney? $203,000.)

But despite valiant efforts, Republicans have failed to rein in the bureau. Until last year. That’s when President Trump installed Mulvaney, who once called the agency a “sick, sad” joke, as its acting director. He’s doing from inside what congressional Republicans could not.

Since taking over last November, Mulvaney has weakened a rule — opposed by payday lenders — that would have made them determine that borrowers can repay them before granting a high-interest short-term loan. (Funny. Most legitimate businesses want to know whether people can pay back a loan.) He has dropped lawsuits against four online payday lenders accused of charging customers as much as 950% interest. He has not brought a single new enforcement action. And he has called on Congress to weaken the agency he heads. There's a new sheriff in town, and he decided to close down his own jail

For this, banking committee Republicans praised him Thursday: “You’ll bring a ray of sunshine to a black hole of bureaucracy,” Sen. Richard Shelby, R-Ala., told him. That and a big smile to every bad guy's face from here to the Oklahoma territory.

Perhaps Republicans, whose constituents are all consumers, will get tired of trying to kill an agency that has fought so successfully to help them. In any case, when the smoke at the CFPB Corral clears, consumers should hope that someone is left to stand up for the little guy.

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