[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                    HEARING ON THE 2018 SEMI-ANNUAL
                    REPORT OF THE BUREAU OF CONSUMER
                          FINANCIAL PROTECTION

=======================================================================

                                 HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 11, 2018

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 115-83
                           
                           
                           
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31-417 PDF                  WASHINGTON : 2018                     
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking 
    Vice Chairman                        Member
PETER T. KING, New York              CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
STEVAN PEARCE, New Mexico            GREGORY W. MEEKS, New York
BILL POSEY, Florida                  MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri         WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan              STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin             DAVID SCOTT, Georgia
STEVE STIVERS, Ohio                  AL GREEN, Texas
RANDY HULTGREN, Illinois             EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida              GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina     KEITH ELLISON, Minnesota
ANN WAGNER, Missouri                 ED PERLMUTTER, Colorado
ANDY BARR, Kentucky                  JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania       BILL FOSTER, Illinois
LUKE MESSER, Indiana                 DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado               JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas                KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine                JOYCE BEATTY, Ohio
MIA LOVE, Utah                       DENNY HECK, Washington
FRENCH HILL, Arkansas                JUAN VARGAS, California
TOM EMMER, Minnesota                 JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York              VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan             CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia            RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana

                     Shannon McGahn, Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 11, 2018...............................................     1
Appendix:
    April 11, 2018...............................................    79

                               WITNESSES
                       Wednesday, April 11, 2018

Mulvaney, Hon. Mick, Acting Director, Bureau of Consumer 
  Financial Protection...........................................     5

                                APPENDIX

Prepared statements:
    Mulvaney, Hon. Mick..........................................    80

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    Article entitled, ``Consumers Union calls for nomination of 
      permanent CFPB director dedicated to protecting consumers 
      from financial abuses''....................................   144
    Written statement for the record from U.S. PIRG..............   146
Wagner, Hon. Ann:
    Supplemental production of documents and briefing book from 
      the Bureau of Consumer Financial Protection (CFPB).........   153
Mulvaney, Hon. Mick:
    Written responses to questions for the record submitted by 
      Representatives Waters, Budd, Huizenga, Hultgren, 
      Pittenger, and Sinema......................................   253

 
                    HEARING ON THE 2018 SEMI-ANNUAL
                        REPORT OF THE BUREAU OF
                     CONSUMER FINANCIAL PROTECTION
                     
                              ----------                              


                       Wednesday, April 11, 2018

                     U.S. House of Representatives,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room 2128 Rayburn House Office Building, Hon. Jeb Hensarling 
[chairman of the committee] presiding.
    Present: Representatives Hensarling, Royce, Pearce, Posey, 
Luetkemeyer, Huizenga, Duffy, Stivers, Hultgren, Pittenger, 
Wagner, Barr, Rothfus, Tipton, Williams, Poliquin, Love, Hill, 
Emmer, Zeldin, Trott, Loudermilk, Mooney, MacArthur, Davidson, 
Budd, Kustoff, Tenney, Waters, Maloney, Velazquez, Sherman, 
Meeks, Capuano, Clay, Lynch, Scott, Green, Cleaver, Ellison, 
Foster, Kildee, Delaney, Sinema, Beatty, Heck, Vargas, 
Gottheimer, Gonzalez, Crist, and Kihuen.
    Chairman Hensarling. The committee will come to order. 
Without objection, the Chair is authorized to declare a recess 
of the committee at any time.
    And all Members will have 5 legislation days within which 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is for the purpose of receiving the semi-
annual report of the Bureau of Consumer Financial Protection.
    Walking in through the hallway I have never seen such a 
crowded hallway. Rarely have I seen so much excitement. So just 
in case you thought Mr. Zuckerberg was appearing in this 
hearing room, he will be across the hallway.
    Having said that, I now recognize myself for 3 minutes to 
give an opening statement.
    This morning we welcome home Mick Mulvaney, a highly 
respected former Member of this very committee, the director of 
the OMB, and the acting director of the Bureau of Consumer 
Financial Protection. He is here to deliver the Bureau's latest 
semi-annual report to Congress.
    When Richard Cordray was director of CFPB I maintained it 
was perhaps the single most powerful and unaccountable agency 
in the history of the republic. Now that Mick Mulvaney is 
acting director, I still maintain that the CFPB is the most 
powerful and unaccountable agency in the history of the 
republic.
    Democrats chose to insulate it from Congress, the 
President, courts, voters, and the democratic process. The CFPB 
is unaccountable to the President, because the director can 
only be removed for cause. The CFPB is unaccountable to 
Congress because it determines its own funding stream. The CFPB 
is unaccountable to the courts because it benefits from the 
Chevron doctrine. The CFPB is unaccountable to, well, the CFPB, 
because there is really not even a ``them.'' In this case, 
there just happens to be a ``him.'' No commission, no board, no 
effective oversight.
    So powerful is the CFPB director that he alone has been 
granted the unprecedented power to declare any mortgage, credit 
card, or bank account unfair or abusive, at which point 
Americans can't have them if they need them, want them, and can 
afford them. The fact that the CFPB director has such power is 
itself unfair and abusive, and is an affront to the personal 
freedom of every American citizen.
    While the Bureau retains all of these unbridled powers and 
remains unaccountable under Acting Director Mulvaney, there is 
one distinction: Director Cordray often acted unlawfully; 
Acting Director Mulvaney acts lawfully. What a welcome change.
    For example, in the PHH case, the facts show that Mr. 
Cordray unilaterally reversed decades of accepted law with 
regards to RESPA (Real Estate Settlement Procedures Act), and 
did so without formal rulemaking. No comment, no due process, 
no notice.
    Then, to make matters worse, Mr. Cordray attempted to apply 
these new--this new rogue standard retroactively. Fortunately, 
these actions were held unlawful by the D.C. Court of Appeals. 
And that is just one example.
    We also know that, in many respects, consumers have been 
harmed by the CFPB. One example, according to researchers at 
the University of Maryland, the CFPB's Qualified Mortgage (QM) 
rule harmed middle-income borrowers who not only--quote--didn't 
obtain cheaper mortgages, but were cut out of the mortgage 
market altogether.
    But I must admit it is sheer irony and great comic relief 
to see the wailing and gnashing of teeth of many of my 
Democratic colleagues who now denounce the unaccountable nature 
of the CFPB, but only because now a Republican is in control. I 
ask: Where have you been?
    The good news is we have an acting director before us today 
who is actually asking our assistance in reforming the CFPB. 
And if our Democrat colleagues wish for the Bureau to be 
accountable and responsive, please work with us to ensure we do 
just that.
    Chairman Hensarling. I now yield to the Ranking Member for 
her opening statement.
    Ms. Waters. Thank you very much, Mr. Chairman. If I may, I 
would like to say at the outset that Mr. Mulvaney is not the 
acting director of the Consumer Financial Protection Bureau. He 
was illegally appointed by President Trump in a move that 
blatantly contradicts the Dodd-Frank statute, which is very 
clear that the deputy director of the agency shall serve as 
acting director in the case of absence or unavailability of the 
director.
    So I want to be very clear that Democrats' participation in 
this hearing is not in any way an acknowledgment of Mr. 
Mulvaney's legitimacy at the Consumer Bureau. Nevertheless, 
given the many impactful and, indeed, harmful decisions Mr. 
Mulvaney is making with regard to the Consumer Bureau, it is 
necessary for us to engage with him in an oversight capacity 
here today, while the courts decide who should actually be in 
charge. I am very concerned about Mr. Mulvaney's actions, and 
have serious questions that he must address in his testimony.
    Mr. Mulvaney's very presence at the Consumer Bureau 
compromises the critical independence of the agency, which was 
specifically designed by Congress to be an independent watchdog 
for America's consumers. As director of the White House Office 
of Management and Budget, Mr. Mulvaney serves at the pleasure 
of and reports to the President, which means that this 
President holds an inappropriate level of influence over the 
operations and activities of the Consumer Bureau and our system 
of banking regulations.
    It is very clear that Mr. Mulvaney is indeed carrying out 
this President's agenda at the Consumer Bureau. He has taken a 
series of actions that weaken the agency's ability to carry out 
its important mission and benefit the predatory actors that the 
agency is designed to police.
    For example, he has stripped the Consumer Bureau's Office 
of Fair Lending of its enforcement and supervisory powers, 
which has the effect of undermining the Consumer Bureau's 
ability to enforce fair lending laws.
    Mr. Mulvaney has also demonstrated a pattern of working to 
help out payday lenders. He has stopped the implementation of 
the Consumer Bureau's Sensible Payday Rule. He withdrew a 
lawsuit that the Consumer Bureau had initiated against a group 
of payday lenders who had allegedly deceived consumers about 
the cost of loans which had interest rates as high as 950 
percent a year. And he has also ceased an investigation into a 
high-cost installment lender called World Acceptance 
Corporation, which reportedly has--was engaging in abusive 
practices.
    His actions have signaled that the Consumer Bureau is a 
safe haven for payday lenders, so much so that the former CEO 
of World Acceptance Corporation actually sent him her resume, 
asking if she could be the next director of the Consumer 
Bureau.
    Enforcement actions have also ground to a halt, with zero 
actions between the time when Mulvaney first walked through the 
doors of the Consumer Bureau and today.
    Mr. Chairman, Democrats will not allow the Consumer 
Bureau's statutorily mandated mission to be undermined. It is a 
critically important agency that must be allowed to continue 
its work protecting American consumers from unfair, deceptive, 
or abusive practices.
    Ms. Waters. I thank you and I yield back the balance of my 
time.
    Chairman Hensarling. The Chair now recognizes the gentleman 
from Missouri, Mr. Luetkemeyer, the Chairman of the Financial 
Institutions and Consumer Credit Subcommittee for 2 minutes.
    Mr. Luetkemeyer. Thank you, Mr. Chairman. Mr. Mulvaney, 
welcome back to the committee. We appreciate your willingness 
to be with us this morning.
    While the Bureau of Consumer Financial Protection has a 
well-intended mission, in practice it has been an 
unaccountable, unconstitutional, politically driven agency. For 
many years you have heard our concerns surrounding the Bureau. 
Now that you have had the opportunity to observe this agency 
from multiple vantage points, I have no doubt that the insights 
you will offer today will be both valuable and compelling.
    The mountain of rules coming out of the Bureau under your 
predecessor crippled financial institutions seeking to serve 
their communities. The uncertainty surrounding these--those 
rules, paired with the apparent desire to regulate through 
enforcement, has had a chilling effect on financial services 
companies across the Nation.
    As you know, Mr. Mulvaney, the chilling effects don't stop 
at banks and credit unions, because ultimately they punish the 
consumers who are charged--who you are charged with protecting.
    Under your leadership the BCF has taken steps to not just 
talk the talk, but to walk the walk, and to ensure consumer 
protection without assaulting financial independence. In your 
brief tenure you have underscored the need for increased 
transparency and oversight of the Bureau. You have called for 
an end to the absolute power you possess as acting BCF 
Director, which, in your words, would frighten most of us. You 
have allowed for greater public input into rules, and you 
called for an end to what I believe is essentially unlawful 
legislating by Bureau staff.
    Mr. Mulvaney, you are, thankfully, both a terrible 
bureaucrat, but a great leader: A most welcome change.
    American consumers deserve strong protections, while also 
being afforded the opportunity to control their own financial 
decisions and futures. Under your leadership, I believe the 
Bureau of Consumer Financial Protection is well on its way to 
finally living up to its name.
    We all thank you for your steps that the--all the steps 
that you have taken thus far, and we look forward to your 
testimony.
    Mr. Luetkemeyer. With that, Mr. Chairman, I yield back.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from Michigan, Mr. Kildee, the 
Vice Ranking Member, for 1 minute.
    Mr. Kildee. Thank you, Mr. Chairman, and thank you, Madam 
Ranking Member. And Mr. Mulvaney, welcome back. I am sure you 
have missed the committee desperately.
    You and I had differences when we were here. We maintained 
a good relationship. We still have differences, and that is 
part of what we will explore at this committee.
    A concern that I have is that the Bureau's original mission 
was to protect the American consumer. Previously, under 
Director Cordray, $12 billion was returned to consumers; 30 
million Americans recovered damages for deceptive, predatory, 
or abusive practices by banks, student loan providers, payday 
lenders. But, as was pointed out, since the director, Director 
Cordray, left, the Bureau has not taken any significant 
enforcement actions.
    The Bureau has instead delayed implementation of important 
protections like the payday rule and, even more concerning, has 
taken steps to remove the independence of the Bureau. And that 
is the point that I think is most important.
    The Bureau's independence makes it an important entity. 
That independence actually means that it stands up for the 
American consumer. An administration that believes that a 
person who is--already has a full-time job--and I imagine the 
director of OMB is one that takes a lot of your time--can also 
be the principal defender of American consumers does not take 
that job or that role seriously enough.
    With that, I echo Member Waters' concern about whether or 
not you actually hold this position. And while the--
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair has been very generous on your--
    Mr. Kildee. You have been.
    Chairman Hensarling. --60-second opening statement.
    Mr. Kildee. All right. I think you get my point.
    Chairman Hensarling. Today we welcome the testimony of the 
Honorable Mick Mulvaney to present the semi-annual report of 
the Bureau of Consumer Financial Protection, as required by 
Title X of the Dodd-Frank Act.
    Director Mulvaney is, obviously, no stranger to us, as he 
was our colleague before President Trump nominated him to serve 
as director of the Office of Management and Budget. He is also 
the current acting director of the Bureau of Consumer Financial 
Protection, a post he was appointed to on November 24th of 
2017. Prior to his time in the Administration, he served the 
people of the 5th District of South Carolina as their Member of 
Congress from 2010, and was the first Republican Member to hold 
that seat in 128 years.
    A lifelong Carolinas resident, he received his bachelor's 
degree from Georgetown University and his juris doctor from the 
University of North Carolina at Chapel Hill.
    Without objection, the witness's written statement will be 
made part of the record.
    Director Mulvaney, welcome home. You are now recognized to 
give an oral presentation of your testimony.

                 STATEMENT OF HON. MICK MULVANEY

    Mr. Mulvaney. Thank you, Mr. Chairman. Thank you for having 
me. Ranking Member Waters, it is good to see everybody. For the 
new faces, it is a pleasure to be here before you to talk about 
our semi-annual report of the Bureau of Consumer Financial 
Protection. I hope y'all have it. You should have access to 
that.
    I also have a written statement. My experience being on the 
committee, though, that having people sit here and read their 
written statements is a complete waste of time, so I am not 
going to do it.
    I will talk a little bit about why I am here today. I want 
to be here today to answer questions. I am excited to be here 
today to answer questions. I think it is important that we 
bring some transparency and accountability to this Bureau, to 
the Bureau of Consumer Financial Protection.
    The Bureau is not designed structurally to be accountable. 
By its very DNA, by its very nature, it is not accountable to 
you, it is not accountable to the public, it is not accountable 
to anybody, other than itself. And I hope today we get a chance 
to explore how to fix those things, and why those things are 
not beneficial, that independence--to Mr. Kildee's point--does 
not necessarily or not have to, mean unaccountable to everyone.
    I will give you just one example, and I hope we get a 
chance to talk about more during the course of the day. I have 
to be here. The statute requires me to be here, and I am happy 
to be here. I do not have to answer a single one of your 
questions. I will, and I look forward to doing that. But I 
don't have to.
    The statute says that I shall appear before Congress, and I 
am doing that today and doing it tomorrow in the Senate. Again, 
happy to do it. Doesn't say a word about answering your 
questions, doesn't say a word about testifying, which is 
interesting, because elsewhere in Dodd-Frank other people do 
have to appear and testify, or appear and answer questions. For 
some reason, the director of the Bureau does not. The director 
of the Bureau only has to appear.
    So I believe it would be my statutory right to simply sit 
here and twiddle my thumbs for the next 4 hours, while y'all 
ask questions. I think that is wrong. And again, I am not going 
to do it. But I use that as just one of many examples of what 
is broken in the way this statute is written.
    And I hope that, as a result of the opportunity we have 
here today to answer questions--and I want to answer as many as 
I possibly can, recognizing that some of them maybe I don't 
know, and I will have to get back to you--and that goes to 
folks on both sides of the aisle--but I want to answer as many 
as I can. But I hope that it is all aimed toward one end goal 
of trying to figure out a way to work together to make this 
more accountable.
    I got a letter from Elizabeth Warren. She was not really 
happy. Senator Warren was not happy with some of the answers 
she got back from me and some inquiries she made to the Bureau. 
I reminded her that sounded a lot like some of the frustrations 
that this side of the aisle had when Mr. Cordray sat here for 
the last 4 or 5 years.
    And I suggested to her that maybe it wasn't the nature of 
the person sitting in the chair that was causing that 
frustration, it was the nature of the underlying statute that 
was causing that frustration, and that both sides might be well 
served by fixing the statute and bringing some transparency in 
here so that we do have to answer your questions, and that 
while you may disagree with a policy, as Mr. Kildee and I have 
done in the past, and will continue to do, we won't disagree 
about the fact that if I am going to sit here and spend $700 
million of y'all's money and the taxpayers' money every single 
year, at least maybe I should have to answer some questions 
about how and why I am doing that.
    So I hope that is--that is the reason I am here, I hope it 
is the reason that y'all are here, and I look forward to 
answering as many questions as I can. I am here until y'all get 
tired of asking me questions.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Mulvaney can be found on 
page 80 of the Appendix.]
    Chairman Hensarling. The Chair now yields himself 5 minutes 
for questions.
    Before I get to the questions, Mr. Mulvaney, I do wish to 
compliment you because, contrary to your predecessor, you 
turned in your testimony oon time. So you are the first CFPB 
director--
    Mr. Mulvaney. I hired some really good staffers.
    Chairman Hensarling. --to do that.
    Mr. Mulvaney. They have a good background in this. But 
anyway, that is--
    Chairman Hensarling. I want to explore a little bit more--
as you know, since we have worked together for many years, I 
have a number of concerns about CFPB. I am concerned about to 
what extent they do indeed protect consumers, because part of 
consumer protections is to protect their rights to a 
competitive, transparent market.
    But I am also concerned about, have we simply eviscerated 
traditional foundational principles of checks and balances and 
due process.
    So you just told us that, under the Dodd-Frank Act, if you 
so chose, you could sit here, put your feet up on the desk, 
and, I suppose, take out your iPhone and play Candy Crush for 
the next 4 hours, and there would be nothing we could do about 
it.
    I also understand, I believe--and I mentioned it in my 
opening statement--that depending upon what side of the bed you 
wake up on, you could determine--you alone, in your solitary 
capacity, could declare any credit card in the Nation abusive 
and functionally outlaw it. Is that correct?
    Mr. Mulvaney. I believe that to be the case. Yes, sir.
    Chairman Hensarling. OK. I believe also, particularly--let 
me see if I can get the citation in front of me--under section 
1022(b)(3) of Dodd-Frank, you have the power to--quote--
unconditionally exempt any class of covered persons from any 
provision of this title, or from any rule issued under this 
title, as the Bureau deems necessary or appropriate.
    My reading of this part of Dodd-Frank, then, tells me, if 
you so chose, could you exempt all community banks--scratch 
that. Could you exempt all banks located in, say, Dallas, Texas 
from the jurisdiction of CFPB enforcement?
    Mr. Mulvaney. If we wrote the rules such that that was a 
class, a properly identified class, absolutely.
    Chairman Hensarling. Well, what is a class?
    Mr. Mulvaney. That is a great question.
    Chairman Hensarling. So you, on your own recognizance, 
could essentially--you could, I suppose, exempt all banks that 
started with a C?
    Mr. Mulvaney. Yes, sir.
    Chairman Hensarling. This doesn't seem to be wise. Again, 
it seems to be totally devoid of checks and balances.
    Let's talk a little bit about the budget. So there is a 
ceiling, I suppose, on how much you can ask for. But you--who 
determines the budget of the CFPB?
    Mr. Mulvaney. I do.
    Chairman Hensarling. You do? So how do you get your money, 
Mr. Mulvaney? How do you get your appropriation?
    Mr. Mulvaney. I send a letter to the Federal Reserve Board 
and they send me a check.
    Chairman Hensarling. Do they review your request?
    Mr. Mulvaney. No, I have--I don't think so. They have never 
asked the CFPB to justify any spending. We send over a letter 
that says, ``Please send us''--I think the letter I just sent 
last week was $98.5 million--
    Chairman Hensarling. So the Fed is your personal ATM.
    Mr. Mulvaney. Up to the limits prescribed by the statute, 
which is about $700 million.
    Chairman Hensarling. So I assume that you have to pay 
payroll. But after--and payroll is roughly half of your current 
budget?
    Mr. Mulvaney. About 60 percent. Yes, sir.
    Chairman Hensarling. Sixty percent. So the other 40 
percent, which is still--what is that, a few hundred million 
dollars?
    Mr. Mulvaney. Oh, about $280 million-ish.
    Chairman Hensarling. OK, so there is $280 million that you 
alone get to decide how it is spent. Is that correct?
    Mr. Mulvaney. Yes, sir.
    Chairman Hensarling. The naming rights at Texas Stadium for 
the Dallas Cowboys, AT&T pays roughly--I think it was close to 
$20 million a year for those naming rights. If you wished to 
advertise the Bureau, could you take this money and outbid AT&T 
and have the naming rights at Texas Stadium?
    Mr. Mulvaney. Oh, absolutely. In fact, I think we spent at 
least $40 million on advertising up to this point, anyway. So 
sure, we could do that.
    Chairman Hensarling. Could you take that $250 million and 
ensure that every man, woman, and child in America has a CFPB 
tee shirt, ball cap, and koozie?
    Mr. Mulvaney. Yes. In fact, I think, under previous 
leadership, we paid to put advertising in every single tax 
return.
    Chairman Hensarling. Well, this is borderline insane is 
what it is, Mr. Mulvaney, borderline insane.
    Let me ask you this. So you once in one quarter asked for 
zero dollars of funding, correct?
    Mr. Mulvaney. I did. Yes, sir.
    Chairman Hensarling. And that was in the second quarter of 
2018. You have now since asked for $98.5 million in the third 
quarter of 2018, is that correct?
    Mr. Mulvaney. Yes, sir.
    Chairman Hensarling. If you chose--if you chose, going 
forward, to ask for zero dollars, isn't it true that the other 
prudential regulators--say the Fed, the OCC (Office of 
Comptroller of the Currency), the FDIC (Federal Deposit 
Insurance Corporation)--do have secondary concurrent 
jurisdiction to enforce all Federal consumer protection laws?
    Mr. Mulvaney. In most places, I think there is one 
exception on abusive, and there are some exceptions, I think--
    Chairman Hensarling. So with the exception of the extra A 
in UDAP, is the answer yes to the question?
    Mr. Mulvaney. I think there is one other place, Mr. 
Chairman, when it comes to rulemaking under fair debt 
collection--
    Chairman Hensarling. So if the CFPB had zero funding, 
consumers are still protected also by State attorneys general, 
is that correct?
    Mr. Mulvaney. Yes, sir.
    Chairman Hensarling. OK. Well, I have exceeded my own time. 
I will attempt to set a good example. I yield back. The Chair 
now recognizes the Ranking Member.
    Ms. Waters. Thank you very much, Mr. Chairman. Allow me to 
repeat for Mr. Mulvaney that you are not and, in my words, 
should not be construed to suggest the legitimate, lawful 
acting director of the Consumer Financial Protection Bureau. So 
I look forward to the D.C. Circuit Court's swift ruling in the 
matter. But I will not stand idly by while President Trump's 
OMB director destroys the Consumer Bureau when harmed consumers 
need help.
    Before I raise some particular questions with you, you have 
made quite--made it quite known this morning that you don't 
have to be here and that you don't have to answer questions. I 
don't know why you think that is so extraordinary. The previous 
director came here 63 times and not only answered all of our 
questions, but was badgered by our Chairman. So we certainly 
expect you to be here, and we certainly expect you to answer 
our questions.
    Mr. Mulvaney, given that the President has wanted to do a 
big number on Dodd-Frank for his friends on Wall Street, it 
seems clear that his goals are about trying to install you at 
the Consumer--what his goals are about trying to install you at 
the Consumer Bureau.
    Now, do you support the mission of the Consumer Bureau? 
Let's review the record. And maybe you could just answer by yes 
or no. And I am remembering when you served on this committee 
and some of the things that you said.
    Did--do you remember having said, ``I don't like the fact 
that the CFPB exists. I will be perfectly honest with you.'' 
Have you changed your mind?
    Mr. Mulvaney. I don't remember saying that, Representative 
Waters, but that certainly does sound like something I would 
have said.
    Ms. Waters. You also said, ``It turns out being a joke, and 
that is what the CFPB really has been, in a sick and sad kind 
of way. Some of us would like to get rid of it.'' Do you 
remember saying that?
    Mr. Mulvaney. Again, I don't have a specific recollection, 
but I have been informed that, yes, I have said that. And I 
believe that I did say that.
    Ms. Waters. All right. Yes or no, were you an original 
cosponsor of H.R. 3118, a bill introduced in the last Congress 
by Representative Ratcliffe to fully and completely repeal the 
Consumer Bureau?
    Mr. Mulvaney. It wouldn't surprise me if I was, but I don't 
remember the bill by that number.
    Ms. Waters. So what do you think those of us who have the 
responsibility for implementing Dodd-Frank and being public 
policymakers that we are supposed to be about someone who now 
is sitting in a position that they really--happens to be 
sitting in illegally, to begin with--why should we think that 
you are not there to destroy the Consumer Financial Protection 
Bureau?
    Mr. Mulvaney. Actually, with respect, Congresswoman, I 
would suggest that I am the one responsible for implementing 
Dodd-Frank, not you. You are responsible for passing the 
legislation and, and then the Executive branch implements it.
    I have not burned the place down, despite what you may have 
heard about what I was going to do when I got there. I think 
that we have 10 fewer people working there now than the day I 
took over. That is out of 1,627 people. We continue--
    Ms. Waters. Reclaiming my time--
    Mr. Mulvaney. --to enforce the law.
    Ms. Waters. Let me just say to you that you couldn't 
implement a thing unless, first of all, there was legislation 
that was passed to deal with what you are doing; and, second, 
that we have the responsibility for oversight for your 
implementation. So I want you to understand the relationship.
    Furthermore, let me just say that the Office of Fair 
Lending and Equal Opportunity is something that I am very 
concerned about. Mr. Mulvaney, the Consumer Bureau's Office of 
Fair Lending and Equal Opportunity has had many successes, 
including record court settlements for consumers who were 
illegally discriminated against in credit court mortgage and 
indirect lending.
    You recently made changes to gut the powers and undermine 
the role of this critical office. Why have you stopped experts 
in supervision and enforcement of our lending discrimination 
laws from doing their jobs?
    Mr. Mulvaney. We haven't. The Fair Lending Office has a 
supervision and enforcement function and an education function. 
And, prior to the changes that I made, all of it sat within our 
own Supervision and Enforcement. And all we did is split it 
into two pieces, so that supervision and enforcement was under 
Supervision and Enforcement, and education was actually 
elevated, Congresswoman, to the director's office. So we 
actually put them in more of a prestigious position in the 
office than existed beforehand.
    Ms. Waters. A recent investigative news report revealed--
suggested there is pervasive modern-day redlining going on 
throughout the country. Is it your view that fair lending and 
equal opportunity laws simply aren't a priority or aren't even 
important?
    Mr. Mulvaney. No, I absolutely think that discrimination is 
abhorrent, and we should fight against it. And we do intend to 
enforce the laws against discrimination at the Bureau.
    Ms. Waters. How will you ensure that lending discrimination 
is not a prevalent practice among lenders?
    Mr. Mulvaney. The same way it has been done since the 
Bureau was created. We do supervision, we do oversight, we do 
enforcement, we have folks on the ground. We have, I think, 600 
people today doing supervision.
    Ms. Waters. I yield back the balance of my time.
    Chairman Hensarling. The time of the gentlelady has 
expired. The Chair now recognizes the gentleman from Missouri, 
Mr. Luetkemeyer, Chairman of our Financial Institutions 
Subcommittee.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    Director Mulvaney, thank you again for being here. Director 
Cordray seemed to adopt a policy of regulation by enforcement. 
The director denied that when I asked him about it during one 
appearance before this committee, but the simple truth of the 
matter is that taking enforcement actions against a firm when 
no rule or guidance has been issued is, in actuality, 
regulation by enforcement. In fact, I could give you an example 
of the BCF fining an entity based on they were thinking about 
proposing a rule.
    In your January memo to the staff, you suggest that the 
days of regulation by enforcement were coming to an end. You 
wrote, ``When it comes to enforcement, we will focus on 
quantifiable and unavoidable harm to the consumer.'' Can you 
tell us about your goals for enforcement, and how you--and what 
do you believe the Bureau's enforcement authorities--how they 
should be used?
    Mr. Mulvaney. Yes, sir. Regulation by enforcement is done. 
We are not doing it any more. I believe very firmly that 
financial service providers should be allowed to know what the 
law is before they are accused of breaking it.
    Mr. Luetkemeyer. Very succinct.
    Mr. Mulvaney. I could talk more, if you wanted me to, but--
    Mr. Luetkemeyer. How do you--you outlined in the--in your 
strategic plan, the goal of ensuring that all consumers have 
access to markets for consumer financial products and services. 
How do you plan to accomplish this goal?
    Mr. Mulvaney. We are going to do, I think--and again, when 
I say a better job, I want to make it very clear that I was not 
there beforehand. So when you hear me say that we are going to 
do things differently, I don't want to automatically imply that 
the staff was not doing a good job before I got there. In fact, 
my experience has been that nothing could be further from the 
truth. I have been very impressed with the quality of the work 
that the staff has been asked to do.
    The question is what have they been asked to do by their 
leadership. And one of the things I have asked the staff to pay 
closer attention to, moving forward, is the cost benefit 
analysis. I was, quite frankly, surprised, Mr. Luetkemeyer, by 
the amount of qualitative cost benefit analysis that was done. 
In fact, my background is in numbers, economics, commerce, 
finance. I didn't realize you could do qualitative cost benefit 
analysis. I thought cost benefit analysis was supposed to be 
quantitative.
    I have come to accept, I think, that a certain amount of 
qualitative analysis is part--can be a valuable part of any 
analysis. But we are going to do a better job on quantitative 
analysis.
    So, to your point, we are going to take a close look at how 
consumers would be affected, in terms of services that would 
not be available to them, the impact on the markets, the 
impacts on availability of credit, the impacts of availability 
of capital, and the flow of capital to small businesses and to 
individuals. We are going to do more quantitative analysis in 
those areas.
    Mr. Luetkemeyer. Along that same line, right now there is 
discussion with regards to the small-dollar lending rule. And 
you have stopped the implementation of it, and I assume that we 
are in the process of trying to go back and have some--to re-
comment this and, again, look at the cost benefit of the rule 
that was proposed.
    My understanding is that when proposed there were 
significantly more folks who were supportive of allowing the 
small-dollar lending to continue, versus those who wanted to be 
very prescriptive and restricted even further. Would you like 
to comment on that?
    Mr. Mulvaney. And just to clarify, we have not stopped that 
rule. That is not the appropriate way you deal with things. 
What we have done is, by following the Administrative 
Procedures Act (APA), simply given notice of our intent to 
revisit the rule, which is exactly what the APA requires.
    We have not done any pre-judgment, we have not come to any 
pre-determined conclusions. We have simply given notice of our 
intention to do so, which is exactly what the APA implies. And 
we will go through all of the statutory requirements to do so--
notice and comment, so forth, analysis of all the data.
    Is it possible that I may come to different conclusions 
than my predecessor did, looking at the same sets of data? 
Absolutely. That is the nature of the discretion of the office. 
But we have not stopped the rule, we have simply given proper 
notice and comment under the APA that we intend to revisit it.
    Mr. Luetkemeyer. When you are looking at that rule, are you 
going to be looking at the access to credit for small-dollar 
needs of consumers as something that would be a priority to see 
how you can continue to allow the markets to provide that 
opportunity for people who want to take advantage of it?
    And then also, the cost benefit of allowing that to happen 
in a certain way, or whatever the rules--however they are, is 
this--these are two important points, I think.
    Mr. Mulvaney. We would be looking at anything that is 
relevant to an ordinary rulemaking, and those things are 
absolutely part of those--part of that data.
    Mr. Luetkemeyer. I know that you made--I was talking with 
some folks and there was a situation. I know that the Chairman 
talked a minute ago about some of the dollars that you were 
using. And you have some economic researchers here that--
something like 40 of them--and they are able to do some self-
directed research for you. And is that very productive?
    Mr. Mulvaney. I haven't found the productivity in it yet, 
Congressman. We could talk about that maybe a little bit 
further in another question. But yes, the self-directed 
research that is not aimed toward the mission of the Bureau is 
something that has caught my eye.
    Mr. Luetkemeyer. Thank you. I will yield back the balance 
of my time.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentlelady from New York, Mrs. Maloney, 
Ranking Member of our Capital Markets Subcommittee.
    Mrs. Maloney. Mr. Mulvaney, welcome. Thank you for being 
here. First I want to be clear that, just because I am engaging 
with you at this hearing, that it is not an acknowledgment that 
you are legally entitled to be the acting director of the 
Bureau. I believe Dodd-Frank was clear in this matter, and that 
Leandra English is the lawful acting director of the Bureau.
    That being said, I have some questions. First of all, how 
long have you been at the Bureau?
    Mr. Mulvaney. November 24th. So what is that? Five months, 
maybe.
    Mrs. Maloney. Yes. And under your predecessor, the Bureau 
was bringing about four enforcement actions per month to 
protect consumers. So let me ask you: How many enforcement 
actions has the Bureau initiated since you took over?
    Mr. Mulvaney. We have initiated none since I have been 
there.
    Mrs. Maloney. And so it is zero. The Bureau has brought 
absolutely zero enforcement actions in nearly 5 months since 
you have been there. And in your testimony you said, ``Our job 
is to enforce Federal consumer laws.'' But so far there is no 
evidence that you are enforcing any of the laws.
    You have also said that you are taking a ``new approach'' 
at the Bureau. Does your new approach involve bringing any 
actual enforcement actions, or are you telling me that every 
single financial institution in America has suddenly snapped 
into full compliance with every single consumer financial law 
since you took over last November? Because that would be the 
first time in history that that has happened.
    So what is your explanation? There has been no enforcement 
law, no law that has been violated, no abuse of consumers in 
the last 5 months?
    Mr. Mulvaney. Actually, nothing could be further from the 
truth, Congresswoman. We have--actively litigating 25 cases, 
which includes continuing to litigate things that were filed 
before I was there. We have only made one dismissal of lawsuits 
since I have been there, and that was without prejudice. We 
could talk about that more, if you want to, in another 
question.
    Mrs. Maloney. OK, that is good. May I ask that you submit 
the documents to the committee? Because I would like to read 
them.
    Mr. Mulvaney. What documents would that be?
    Mrs. Maloney. About the actions that you are continuing. If 
you are just continuing what was done before you, or have you 
initiated any actions under your leadership?
    Mr. Mulvaney. A couple different things. Keep in mind we 
really put them in three buckets at the Bureau, and I will 
handle this very quickly.
    There are investigations that are ongoing. There are about 
100 of those.
    Mrs. Maloney. OK.
    Mr. Mulvaney. And those could start and stop at any 
particular time, the senior staff--
    Mrs. Maloney. My question was what have you initiated, not 
what is ongoing.
    Mr. Mulvaney. And again--
    Mrs. Maloney. What have you initiated under your 
leadership?
    Mr. Mulvaney. In the ordinary course of business we could 
start new investigations every single day there, and I wouldn't 
be aware--
    Mrs. Maloney. But have you started any?
    Mr. Mulvaney. I wouldn't be aware of it, Congresswoman.
    Mrs. Maloney. Oh, you--
    Mr. Mulvaney. It is done in the field, and it is not 
checked on by me--
    Mrs. Maloney. Can you look into it and get back to us--
    Mr. Mulvaney. Sure.
    Mrs. Maloney. --if you have initiated anything--
    Mr. Mulvaney. And then there is--
    Mrs. Maloney. under your leadership to help consumers.
    Mr. Mulvaney. And there is the roughly--
    Mrs. Maloney. But under your predecessor I would like to 
make clear that the Bureau returned over $12 billion to 
American consumers who have been ripped off. And how much money 
has the Bureau returned to American consumers who have been 
ripped off by any financial institution in America since you 
took office?
    Mr. Mulvaney. $93 million.
    Mrs. Maloney. $93 million?
    Mr. Mulvaney. Yes.
    Mrs. Maloney. That you have returned to consumers?
    Mr. Mulvaney. Yes, ma'am.
    Mrs. Maloney. Please--
    Mr. Mulvaney. 92.6
    Mrs. Maloney. 92.6. Could you get that paperwork to the 
Chairman, so that all of us can see it?
    Mr. Mulvaney. Sure, and that is a public record.
    Mrs. Maloney. Was that of any initiation that you did, or 
was that again done by your predecessor?
    Mr. Mulvaney. It was a distribution that was approved while 
I was on the job.
    Mrs. Maloney. But was the project initiated by you to 
return this money?
    Mr. Mulvaney. The flow of money out of the--
    Mrs. Maloney. Let me make clear, and I can make this 
question in writing. I want to know how much you returned under 
your leadership that you initiated, not the prior one. And we 
can get that answer in writing, because I do feel that 
basically we have a Bureau that refuses to take any new 
actions, refuses to punish anyone for violating any existing 
rules, and refuses to provide tangible help to American 
consumers, the very people that the Bureau was created to help.
    This is not what Congress intended when we created the 
Consumer Financial Protection Bureau, and I am deeply 
disappointed, deeply disappointed that we have essentially 
taken the cop off the beat in terms of initiating new actions 
to help consumers, not just following up on your predecessor.
    Now, I read in the paper on Monday that Reuters reported 
that the Bureau--is my time up--is going after Wells Fargo. And 
do I have time to ask the question?
    Chairman Hensarling. I am afraid we are already 20 seconds 
over, so--
    Mrs. Maloney. Well, my apologies.
    Chairman Hensarling. --the time of the gentlelady--
    Mrs. Maloney. I yield back. I was just warming up and I ran 
out of time. All right.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    Mrs. Maloney. I yield back.
    Chairman Hensarling. The Chair now recognizes the gentleman 
from Michigan, Mr. Huizenga, Chairman of our Capital Markets 
Subcommittee.
    Mr. Huizenga. I have to tell you, Director Mulvaney, it is 
good to have you here. The last director that was here pretty 
much stalled, obfuscated, ran out the clock, and filibustered 
his entire time. We are actually getting answers, which is 
refreshing.
    Mr. Mulvaney. Apparently I didn't say enough in response to 
Mr. Luetkemeyer; I think I caught him off guard.
    Mr. Huizenga. So yes, you--exactly right. We weren't 
actually--we were expecting you to try to run out the clock 
like the last guy.
    But the--I want--I do want to congratulate you on your 
staff reduction of 0.0614 percent of your staff. So yes, that 
would be a sarcastic note to those that believe that you are 
gutting it all.
    I do want to give you an opportunity, though, to address a 
couple of things that were brought up. How many enforcement 
actions were taken under the former Bureau chief, Director 
Cordray in his first 6 months?
    Mr. Mulvaney. In his first 6 months, zero.
    Mr. Huizenga. Zero. OK. And your sense was you came in--I 
know, from a Michigan company that I have been in communication 
with, that was an ongoing action that has still continued to be 
dealt with. You are moving through with what had been in the 
pipeline. Is that right?
    Mr. Mulvaney. Let me make one thing very clear to 
everybody. We are still going after bad actors. In fact, I have 
actually taken the extraordinary step of ratifying action in 
order to clarify whether or not the constitutional issue has 
been handled. I have ratified actions in other litigation that 
is ongoing. We are still going after bad actors.
    Mr. Huizenga. And I think, as you had indicated, though, 
what practice that you are hoping to curb and eliminate is 
enforcement, or regulation by enforcement. And I think that is 
something we can talk about.
    One of my colleagues just said, has everybody snapped into 
compliance. There is always--benefit of being a realist here, I 
guess, we always know that there are going to be bad actors out 
there. What a lot of us had a concern about was that the last 
director of the Bureau, frankly, just made up violations. And 
these CIDs (Civil Investigative Demands) that would go out 
requesting information on activities that were perfectly legal, 
but they just didn't like, then they would fine people and try 
to curb everyone else's actions through those fines and those 
threats. And I would like you to address that.
    Mr. Mulvaney. Sure. We will take a specific example of an 
action that was brought. There was a financial service provider 
doing something that they had believed to be legal because it 
had been legal for a long time under guidance that had been 
issued by HUD. And, without notice, the CFPB popped them for 
what they considered to be violations. I just happen to think 
that that is wrong. That is that enforcement by--or regulation 
by enforcement that I talk about.
    I think you should be allowed to know what the law is 
before you are accused of breaking it.
    Mr. Huizenga. And then I think there was probably a few 
dozen press releases on that afterwards.
    Mr. Mulvaney. Again, I don't--I didn't follow a lot of the 
press releases under the previous leadership. I wouldn't be 
surprised--
    Mr. Huizenga. I know that a number--I know that they 
certainly were very eager after they would get these consent 
decrees to go out and tout those and use those to bludgeon 
things, to bludgeon other companies.
    I do want to also take a minute here and allow you to talk 
about these self-directed researchers in the economics 
departments of what you have been dealing with over at the 
Bureau.
    Mr. Mulvaney. There was a practice there that I was just 
made aware of in the last couple of weeks where our economists 
are allowed to take up to 50 percent of their time, paid--
    Mr. Huizenga. I am sorry, did you just say half of their 
time?
    Mr. Mulvaney. Up to half of their--
    Mr. Huizenga. Half of their taxpayer-sponsored time?
    Mr. Mulvaney. Yes sir, to do research, which on its face 
probably isn't that objectionable, I guess, until you realize 
that there is no requirement that the research be connected to 
the actual job that the Bureau does.
    Mr. Huizenga. So they could be researching--
    Mr. Mulvaney. The last time I saw--
    Mr. Huizenga. --climate change?
    Mr. Mulvaney. --was a research project on the impact of hub 
airports and urban growth that we paid for at the Bureau of 
Consumer Financial Protection.
    Mr. Huizenga. And that has what, exactly, to do with the 
Bureau of Consumer Financial--
    Mr. Mulvaney. I am still struggling with that one, myself.
    Mr. Huizenga. As would I. So how--are you--do you have the 
ability to go in and change that requirement?
    Mr. Mulvaney. I--yes and no. We are going to follow the 
rules. I operate under a collective bargaining agreement with 
the National Treasury Employees Union, so we have rules on how 
we would go about changing job descriptions, and so forth, and 
we are going to go through the proper processes. But we are 
going to look very closely at that practice.
    Mr. Huizenga. So logic dictates we could have half the 
number of economists, and do the exact same amount of work on 
consumer protection. So we might be able to grow that 0.00614 
percent up a little bit. If we are going to get the same amount 
of research out of half the number of economists, that might be 
a step that we might want to take.
    Mr. Mulvaney. It is not very efficient.
    Mr. Huizenga. No, it is not. So with that, Mr. Chairman, I 
yield back.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentlelady from New York, Ms. 
Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Mr. Mulvaney, I am very concerned about your dual roles at 
OMB and now at the CFPB. I do not understand how you are able 
to work and report directly to President Trump part of the time 
and then act as an independent director of the Consumer Bureau 
charged with protecting working Americans from the deceptive 
and predatory business practices.
    Mr. Mulvaney, I have a series of questions that I would 
like to get a yes-or-no answer. And if you feel you need to 
expand on them, will you please submit them in writing?
    Mr. Mulvaney. I will do my best.
    Ms. Velazquez. Mr. Mulvaney, do you maintain offices at 
both the CFPB and OMB?
    Mr. Mulvaney. Yes, ma'am.
    Ms. Velazquez. Have you ever conducted work for the CFPB 
while at the offices of OMB?
    Mr. Mulvaney. On the weekends I like to sit at my OMB 
office and do my reading--
    Ms. Velazquez. Yes or no?
    Mr. Mulvaney. The answer is yes, ma'am.
    Ms. Velazquez. Have you ever conducted work for CFPB while 
in the Oval Office?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Have you ever conducted work for the CFPB 
while in the Oval Office with President Trump?
    Mr. Mulvaney. No, ma'am. Since I--I don't get to go in the 
Oval Office when the President is not there.
    Ms. Velazquez. OK. So he is never there?
    Mr. Mulvaney. No. You asked me the first question, have I 
ever done it in the Oval Office, and the answer is no. So, by 
definition, I couldn't do it in the Oval Office with President 
Trump.
    Ms. Velazquez. Well, you could be with the President 
discussing some issues. Maybe you are asked a question about 
CFPB and you conduct the business right there.
    Mr. Mulvaney. Right, but I am saying no to both your 
questions.
    Ms. Velazquez. OK. Have you ever--thank you. Have you ever 
conducted work as director of OMB while at the offices of the 
CFPB?
    Mr. Mulvaney. I may have taken a phone call occasionally, 
but most of my OMB work is done at OMB.
    Ms. Velazquez. So you do. Do you receive separate paychecks 
from both OMB and the CFPB?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Do you receive only one total paycheck?
    Mr. Mulvaney. Yes, ma'am.
    Ms. Velazquez. Do you maintain different Government-issued 
email accounts for your roles at OMB and CFPB?
    Mr. Mulvaney. Yes, ma'am.
    Ms. Velazquez. Have you ever conducted CFPB business from 
your OMB email account?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Have you ever conducted OMB business from 
your CFPB mail account?
    Mr. Mulvaney. Not--again--
    Ms. Velazquez. Email.
    Mr. Mulvaney. No, ma'am. I don't think I have ever done 
either of those things.
    Ms. Velazquez. You don't think. But are you sure, or you 
are not?
    Mr. Mulvaney. I haven't gone back to check every email, but 
no.
    Ms. Velazquez. OK.
    Mr. Mulvaney. My practice is to do my CFPB work--
    Ms. Velazquez. So will you please go back, check, and then 
submit an answer?
    Mr. Mulvaney. Every single one of my emails, Congresswoman?
    Ms. Velazquez. No, it is not a--well, no. If you have two 
email accounts--
    Mr. Mulvaney. Right.
    Ms. Velazquez. --that belong to each one of your two 
positions, then why do you need to use one for the business 
while conducting business with the other?
    Mr. Mulvaney. My point is my practice is to do Bureau work 
on the Bureau email and OMB work on the OMB email. Bureau work 
on the Bureau phone and OMB work--I have three phones, and I do 
my OMB work on my OMB phone.
    Ms. Velazquez. Have you ever charged an OMB-related expense 
to your CFPB expense account, including travel?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Have you ever charged a CFPB-related expense 
to your OMB expense account?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Do you have an executive assistant for 
either of your roles at the CFPB or OMB?
    Mr. Mulvaney. Yes, ma'am.
    Ms. Velazquez. Have you ever instructed your executive 
assistant at OMB to carry out CFPB-related business?
    Mr. Mulvaney. No, ma'am, which causes a great deal of 
frustration for both of my executive assistants.
    Ms. Velazquez. That is why you shouldn't be there.
    Have you ever instructed your executive assistant at the 
CFPB to carry out OMB-related business?
    Mr. Mulvaney. No, ma'am.
    Ms. Velazquez. Mr. Mulvaney, the financial crisis and the 
great recession that followed led to five million Americans 
losing their homes to foreclosure, and a million more losing 
trillions of dollars in wealth. The CFPB exists to prevent 
families from surrendering their hard-earned dollars to the 
deceptive or unsavory business practices.
    What lessons did you learn from the financial crisis and 
the great recession, and how are you applying those lessons at 
the CFPB?
    Mr. Mulvaney. You want the lessons of the financial crisis 
in 35 seconds? I think the answer is that the financial crisis 
was a system failure of major proportion. And when any major 
system fails there is no one cause, one single cause. The 
financial crisis was caused by a variety of things, things--a 
bunch of things that happened at the same time.
    Was abusive lending in the housing market part of it? 
Absolutely. Can we do better on enforcing the laws? Absolutely. 
Do we look forward to doing that at the Bureau? Absolutely.
    Ms. Velazquez. That is very encouraging. Let's wait for the 
numbers to show that. Thank you.
    Chairman Hensarling. The time of the gentlelady has 
expired. The Chair now recognizes the gentleman from Wisconsin, 
Mr. Duffy, Chairman of our Housing and Insurance Subcommittee.
    Mr. Duffy. Thank you, Mr. Chairman.
    And welcome, Director Mulvaney. I would just note from the 
first part of this hearing there seems to be a bit of agitation 
coming from the other side of the aisle. And I understand the 
agitation, because Democrats don't have a lot of power or 
control over your directorship of the CFPB, and nor do we on 
the Republican side, because that was the intent of Congress, 
to make sure that Congress has no power or control over the 
CFPB.
    And so, when you are a party in power with a President who 
can appoint the director, this in line maybe with your view 
point, you applaud the director because you think they are 
great. But if you are not in power, there becomes a great deal 
of frustration. And again, I would just note that it is by the 
very structure of the CFPB that came from Dodd-Frank that my 
friends voted for that is the cause of that very frustration.
    I would just note to the gentlelady from New York when we 
talk about five million individuals losing their homes, I would 
argue there are a great number of those people who were getting 
loans that were subsidized by the Government because of 
Government policy that put people in homes they couldn't 
afford. And by the way, we really haven't modified or changed 
housing policy in America since the great recession.
    But I want to ask you. Mr. Huizenga brought up the issue of 
the economists. How many economists work at the CFPB? Are there 
400, roughly?
    Mr. Mulvaney. No, no, no, no. Congressman, it is 20, I am 
told.
    Mr. Duffy. Twenty? OK.
    Mr. Mulvaney. I thought it was 40, but--OK.
    Mr. Duffy. OK, 20.
    Mr. Mulvaney. I was saying--
    Mr. Duffy. In essence, you could--and are these well-paid 
individuals?
    Mr. Mulvaney. They are. I don't--I have the numbers 
someplace, if you really want them.
    Mr. Duffy. That is OK.
    Mr. Mulvaney. But the--
    Mr. Duffy. But no, no--but so--but you are saying you could 
reduce the economist staff from 20 to 10 if they spent 100 
percent of their time working on CFPB issues?
    Mr. Mulvaney. In theory, yes, sir. And the same amount of 
work would get done. It is very, very difficult to reduce the 
size of a Federal staff.
    Mr. Duffy. And I will ask you about that in a second. But 
if that is--if you are, on average, making $200,000 a year--and 
I imagine they might make more than that, we complain about the 
salaries at the CFPB, I will save that for a different time--
but 10 people, 200 grand, that is $2 million a year that you 
could save if you were able to reduce the staff and make them 
actually work on CFPB issues.
    Mr. Mulvaney. Yes. If you assume they are working 50 
percent for--that is exactly right, the math is right.
    Mr. Duffy. Thank you. I was never very good at it, so I 
appreciate your--so--but you can't fire or modify--you can't 
fire anyone at the CFPB, is that right?
    Mr. Mulvaney. It is--it would be--it is not accurate to say 
we can't fire anybody in any circumstances. It is 
extraordinarily difficult to reduce the size of a Federal 
bureaucracy.
    Mr. Duffy. And how about--
    Mr. Mulvaney. Harder at the Bureau than it is at an 
appropriated agency.
    Mr. Duffy. And hence how--you have reduced the staff by how 
much?
    Mr. Mulvaney. Ten people since I--
    Mr. Duffy. Ten people.
    Mr. Mulvaney. Out of 1,700.
    Mr. Duffy. So the great conservative Mick Mulvaney has 
reduced the staff by 10 out of 1,700 employees.
    Mr. Mulvaney. Taking a meat cleaver to it. Yes, sir.
    Mr. Duffy. OK. And if you wanted to redirect the work of 
those economists, could you do it?
    Mr. Mulvaney. Yes, I think we would be able to do that. We 
will have to jump through some hoops to do it with the union, 
and so forth, but I think we will be able to at least get those 
folks to spend their independent research time on things that 
pertain to the mission of the Bureau.
    Mr. Duffy. I want to go quick. You are a lawyer, right?
    Mr. Mulvaney. Yes, sir.
    Mr. Duffy. And we think that the Congress, when it crafts 
legislation, when it uses language in one part of a bill but 
not in another, they do it intentionally. So if the Congress 
says that people are to come to Congress and testify or appear 
and testify or appear and answer questions, they intend them to 
come and answer questions. But if for the director they say 
that you should just appear and don't specify, like they did in 
other sections, that you answer questions or you testify, it 
was done intentionally. Right? That is the way young lawyers 
learn on statutory construction. Am I correct on that?
    Mr. Mulvaney. Inside Dodd-Frank the director of FSOC 
(Financial Stability Oversight Council) is required to report 
and testify before Congress.
    Mr. Duffy. Testify.
    Mr. Mulvaney. The director of the Office of Financial 
Research is directed to appear and answer questions and 
testify. I am not required to do that.
    Mr. Duffy. And so it would be our belief that it was the 
intent of Dodd-Frank that you appear but not be required to 
answer questions.
    Mr. Mulvaney. And that is the interpretation the courts 
usually--
    Mr. Duffy. The holy text of Dodd-Frank and the CFPB, it is 
surprising that they would have that wrong.
    One--my time is almost up. I was the Chair of the Oversight 
Committee, and I asked Director Cordray countless times for 
information. And oftentimes I would be responded with news 
clippings or press releases from the CFPB. We know that the IG 
has done a number of investigations. With the transition from 
Cordray to Mulvaney, have you seen any evidence of requests 
that have been made by the IG or the Congress that were not 
complied with that you now have been able to comply with?
    Mr. Mulvaney. Yes, sir.
    Mr. Duffy. What were they? Quickly.
    Mr. Mulvaney. We have recently come across some documents 
that we believe to be responsive to previous IG requests that 
were not previously produced.
    Mr. Duffy. Documents in the basement, or were they readily 
available to you, as the director?
    Mr. Mulvaney. In the director's file.
    Mr. Duffy. In the director's file.
    Chairman Hensarling. The time--
    Mr. Duffy. I yield back.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from California, Mr. 
Sherman.
    Mr. Sherman. Mr. Mulvaney, welcome back to Congress. As you 
may have noticed, we on this side do not like your dual role. 
However--
    Mr. Mulvaney. I will take it better than not liking me, Mr. 
Sherman, but that is all right.
    Mr. Sherman. That is nothing personal.
    Mr. Mulvaney. I know.
    Mr. Sherman. Don't like the dual role. However, I will 
point out that right now I would assume the Trump 
Administration is trying to determine your successor, who will 
be a full-time person dedicated to being a handmaiden for the 
financial services industry.
    I have seen the full-time appointments that Trump has made 
to other positions, and we may wax nostalgic for this day, in 
that I am not sure that Trump will appoint a full-time 
successor that will be more--do things that the Democrats 
support.
    In the past, Democrats have been opposed to a commission 
and wanted a sole director. It is my understanding that the 
Chairman has changed his mind, and is now for a sole director, 
too, because he anticipates that your sole--that the sole-
director successor of yours will be the most efficient 
structure to rapidly repeal all the good work done by your 
predecessor. I would just say that what consumers and 
businesses want is not a lurch to the left or a lurch to the 
right and then another lurch to the left, but steady and 
ascertainable regulations.
    So there has been a concern that your agency has regulated 
through enforcement. What are you doing to make sure that more 
guidance documents are drafted and released, more regulations 
are published or defined, so that the people can know how to 
live with these rules, other than just looking at the 
enforcement action and trying to divine your policy through 
what action you have taken?
    Mr. Mulvaney. Actually, I think what we have done, 
Congressman, is to try and focus more on the formal rulemaking. 
It is easy to send a letter. It is a little bit harder to send 
guidance. It is hard to do rules. But it is the right way to 
regulate, to follow the Administrative Procedures Act, to go 
through the appropriate steps to do that, because it allows 
notice and comment, whereas guidance might not. Letters 
certainly do not.
    So we are trying to--
    Mr. Sherman. Well--
    Mr. Mulvaney. --simply go a little bit more by the book.
    Mr. Sherman. Where the regulation is unclear, and you are 
simply making--providing guidance, it is one thing to say--
    Mr. Mulvaney. Yes, sir.
    Mr. Sherman. --you don't know what the right policy should 
be, you need notice and comment. Another time you always meant 
to say this, but you said it in a way people can't fully 
understand. More guidance documents would be--
    Mr. Mulvaney. And I would agree with you, that is the 
appropriate use of guidance. Yes, sir.
    Mr. Sherman. --helpful. There is the Home Mortgage 
Disclosure Act. Are you going to be using your authority to 
provide a greater small-institution exemption from parts of 
that Act?
    Mr. Mulvaney. We have given notice of our intent to look at 
some changes--again, going through the proper administrative 
procedures. And I believe the two things we have noticed up 
were the scope of the data set--the statute only requires, I 
think, 11 data points; I think the previous leadership had 
asked for 25--and also look at the size of the--the scope of 
the financial institutions that might be covered.
    Mr. Sherman. Section 1022 was designed to give your Bureau 
the power to provide exemption from certain rules as to 
community institutions and smaller institutions. Are you going 
to use your authority under section 1022 to grant exemptions to 
community institutions, the smaller banks, the credit unions?
    Mr. Mulvaney. Again, it wouldn't be appropriate for me to 
say we are or are not going to do that, because we are going to 
go through the proper procedures. But I think our notice stated 
of our intent to look at the scope gives an indication that we 
are interested in collecting information on exactly the point 
that you just raised.
    Mr. Sherman. Finally, I would like to address this 
silliness of you being required to appear but not testify. I 
was here when Dodd-Frank was written. It was in this room, not 
Mount Sinai. Not every word is perfect. In any other statute 
where we require somebody to appear, they are expected to 
respond to questions.
    And Mr. Zuckerberg is across the hall right now, and there 
is no statute that requires him to appear, except he would be 
subpoenaed and--Mr. Mulvaney, you could have--you certainly 
remember sitting on this side of the dais. I am sure that if a 
statute required a Government official to appear, and that 
Government official appeared but refused to ask questions, a 
subpoena would be issued by the committee with bipartisan 
support. So I am glad you have decided to answer our questions.
    Mr. Mulvaney. And I appreciate that. It would be a 
fascinating question, though, Mr. Chairman, since we are 
getting into the legal technicalities, as to whether or not 
your rules, which is what the subpoenas flow from, bind third 
parties, which I am.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Kentucky, Mr. Barr, 
Chairman of the Monetary Policy and Trade Subcommittee.
    Mr. Barr. Thank you, Mr. Chairman, and welcome back, 
Director Mulvaney, to the committee. I appreciate your candid 
and refreshing testimony today, which continues to expose the 
breathtaking lack of accountability of the agency that you are 
now charged to lead. And I think you continue to make a 
powerful argument that your predecessor perhaps unwittingly 
made, and that is that there is a desperate need for a 
fundamental overhaul of the structure of this agency to make it 
much more accountable.
    Dodd-Frank, as you may know, authorized the Bureau to issue 
a rule that requires disclosure of fees and currency conversion 
rates for remittances. And that rule that was promulgated by 
your predecessor applies to institutions that execute 100 or 
more remittances annually.
    The Bureau's role, as it turns out, created a tremendous 
amount of paperwork for credit unions, and slowed down the 
process, adding additional expenses for those credit unions and 
customers.
    An example is in my home State of Kentucky, where the Fort 
Knox Federal Credit Union was forced to actually exit the line 
of services that they were offering to their 100,000 members, 
mostly service members and their families, because of the 
additional cost of executing these remittances. And that made 
it harder for active-duty military personnel--especially those 
who served at Fort Knox and who were deployed overseas on the 
front lines in South Korea, Germany, and other places in the 
Middle East, and that prevented those service members from 
executing those remittances through their Fort Knox Federal 
Credit Union back to their families.
    I asked your predecessor about this issue, this problem. I 
assumed that it was an oversight, and that your predecessor 
would have wanted to correct this because he talked a lot about 
helping our veterans and helping our service members. But when 
I asked Director Cordray if he would consider exercising his 
statutory discretion to fix this rule, here is what he said.
    He said that the Dodd-Frank statute constrained him, and 
mandated that he put a 100-remittances limit on it. And he 
actually--he didn't blame those of us on this side of the aisle 
for that. He actually was blaming Democrats on that side of the 
aisle for voting for Dodd-Frank, for tying his hands, and not 
allowing him to exercise any discretion to help our active-duty 
military personnel and their families.
    So, Director Mulvaney, would you disagree with your 
predecessor? Do you believe that, under the statute, you have 
the discretion to provide the relief to these credit unions? 
And will you exercise it?
    Mr. Mulvaney. We do not interpret the statute to say that 
we have no discretion as to the 100 number.
    Mr. Barr. And so thank you for that very different answer 
from your predecessor. Will you consider working with our 
office and our constituents, particularly the Fort Knox Federal 
Credit Union, to perhaps move that disclosure threshold from 
100 to 1,000 so that our men and women serving abroad can 
provide those remittances back to their families?
    Mr. Mulvaney. There is actually good news on that front, 
Congressman. As part of the statute, we are required to do a 5-
year lookback on various rules. This is one of them. We have 
actually already noticed that we are doing that here, and we 
have requested information as to exactly the points that you 
have raised.
    So I would encourage anybody who is interested in this 
issue to participate in that RFI assessment, that request for 
information, as we gather data to try and determine whether or 
not that rule needs to be changed--
    Mr. Barr. Well, I appreciate that we have leadership at the 
Bureau now that is actually working for our men and women in 
uniform, and not against them.
    And Mr. Mulvaney, as you know, the Bureau is not subject to 
the congressional appropriations process. I appreciate the fact 
that, in your third quarter budget request, you noted that by 
design this funding mechanism denies the American people their 
rightful control over how the Bureau spends their money, which 
undermines the Bureau's legitimacy, which of course may explain 
why you have all of these accountability issues at the agency 
that you now lead.
    I have consistently, year after year, term after term, 
introduced the TABS Act, Taking Account of Bureaucrats' 
Spending Act, a bill that would meet the recommendation in your 
semi-annual report to subject the Bureau to the congressional 
appropriations process. How do you think that legislative 
change would improve the efficiency and accountability of your 
agency?
    Mr. Mulvaney. Thank you for the question. And I will say 
this as someone who used to sit where y'all sit. Why y'all 
don't want to put me on appropriations, I just don't get it. I 
really don't. Why not have the opportunity to at least bring me 
in and ask me how I am spending money, if I am spending money 
to sponsor Dallas Stadium or what not?
    What is wrong with putting me on appropriations? It is one 
of the suggestions we make in our quarterly report. I may 
understand why it was set up that way in the first place, but 
why y'all would absolutely voluntarily give up the 
appropriations process for this Bureau I just don't understand.
    Mr. Barr. Director, a final question. Under the CFPB's 
high-cost loan rule, Americans now cannot finance a 
manufactured home loan. Manufactured home loans of $50,000 or 
less have dropped significantly. Will you consider revisiting 
the high-cost loan rule and increase the interest thresholds to 
help Americans realize the dream of home ownership?
    Mr. Mulvaney. Honestly, that is the first time I have heard 
of that one, Mr. Barr. I would be happy to get back to you on 
that one. I apologize.
    Mr. Barr. Thank you. I look forward to working with you on 
that, as well.
    I yield back.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from New York, Mr. 
Meeks.
    Mr. Meeks. Thank you, Mr. Chairman.
    Mr. Budget Director--
    Mr. Mulvaney. Mr. Meeks?
    Mr. Meeks. How you doing, Mr. Budget Director?
    Mr. Mulvaney. Doing well, sir.
    Mr. Meeks. Good. You are still the budget director, right?
    Mr. Mulvaney. Yes, sir.
    Mr. Meeks. Is that a full-time or part-time job?
    Mr. Mulvaney. It is a full-time job.
    Mr. Meeks. Full-time job. And the debt--my colleagues 
always put up the debt numbers and the budget, and we know--we 
have had these big numbers. And so are you focused on that at 
all?
    Mr. Mulvaney. Oh, I--
    Mr. Meeks. Any more?
    Mr. Mulvaney. I spend some time on the budget. Yes, sir.
    Mr. Meeks. On a full-time basis?
    Mr. Mulvaney. I have two full-time jobs. Yes, sir.
    Mr. Meeks. And two full. Is that--you think the--I don't 
know many people that work two full-time jobs and do both of 
them in a exemplary manner. If it is--especially when you are 
talking about a budget that is as big as the United States of 
America's is, and the issues that we have. I would think that 
the American people would want someone that is focused on the 
budget.
    And you were initially appointed by the President of the 
United States, from what I understand, to run the budget. Is 
that correct?
    Mr. Mulvaney. Yes, sir.
    Mr. Meeks. OK. Now, also I find--because, just as Mr. 
Kildee--you represented when you were in Congress, of course, 
my parents' home town, Rick Hill, et cetera--found you being 
pretty much an honest guy, whether we disagree.
    And in your statement you said earlier--and I think you 
have indicated to Ranking Member Waters that maybe it was--
sounded like something you had said--you said if--to be 
perfectly honest, you don't like the--didn't like the fact that 
the CFPB exists.
    Mr. Mulvaney. Correct.
    Mr. Meeks. Is that correct? And--
    Mr. Mulvaney. I think my comment was I don't remember 
specifically saying that, but I am not denying it.
    Mr. Meeks. That is not something that would be--
    Mr. Mulvaney. Right, exactly.
    Mr. Meeks. And you haven't changed your mind on that, have 
you?
    Mr. Mulvaney. No, sir.
    Mr. Meeks. OK.
    Mr. Mulvaney. Generally, no.
    Mr. Meeks. All right. That is right. And so you also said, 
certain things about it being a joke, that the CFPB really has 
been--and it is sad and it is sick. Those are your statements. 
And those have not changed, either, right?
    Mr. Mulvaney. I think the Bureau screams out to be 
reformed. Yes, sir.
    Mr. Meeks. So if, in fact, it would seem to me, that those 
statements are true, then what is the best way to get rid of 
the Bureau? Because you never were for the Bureau, you didn't 
want the Bureau, you thought it was sick.
    The best way to get rid of the Bureau would be to take it 
over to get rid of it, because that is what your point--it is 
not--it wasn't--you never were in support of it, you never 
thought that the Consumer Financial Protection Bureau needed to 
be. And so now you happen to be in power. The President 
appointed you as budget director. You make a--he makes a 
determination and you see the opportunity now to get rid of the 
Bureau.
    So what do you--how do you get rid of the Bureau? You stop 
doing what it does, helping consumers. So you stop then doing 
the investigations, you stop doing the enforcements, you stop 
doing the kinds of things that the Bureau was put into 
business, to create, to do.
    So then, it seems to me, what you do--illegally, if you 
have to, because you are doing your job as the budget director, 
the President can't see anyone else who is more intent on 
destroying the Bureau than a former Member of Congress who has 
specifically stated that he did not want this Bureau to exist.
    And so I don't know what it is with this Administration. It 
seems to want to put people, one way or another, into 
leadership when it doesn't believe in the Bureau itself or in 
institutions, which is what my problem is with this 
Administration. It seems as though it wants to undermine every 
institution that we have.
    Why do I say that? Well, we have a person that is now the 
Secretary of Education who doesn't believe in public education. 
You have a person now who is the head of Environmental 
Protection who doesn't believe in it, in environmental 
protection. So then it seems consistent that what the President 
would like to do is to put a person to be the head of the 
Consumer Financial Protection Bureau who does not believe, by 
his own admission, in the Consumer Financial Protection Bureau, 
unlike your predecessor, who believed and had a lifelong job of 
trying to protect consumers.
    Isn't the fact that you have never in your career protected 
consumers?
    Mr. Mulvaney. With respect, no, sir. That is not accurate. 
As I have mentioned before, we are protecting consumers in 25 
ongoing pieces of litigation--
    Mr. Meeks. But not you.
    Mr. Mulvaney. --against bad actors. Oh, no, no. Yes, sir.
    Mr. Meeks. I am just talking about prior to--even prior to 
this job.
    Mr. Mulvaney. To be perfectly--
    Mr. Meeks. There has not been a thing that you have ever 
said as a Member of this committee, as a Member of Congress, 
that was pro-consumer. And now you are in charge of the 
Consumer Financial Protection Bureau, or so you want to be--
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Mexico, Mr. Pearce, 
the Chairman of our Terrorism Finance Subcommittee.
    Mr. Pearce. Director, nice to see you here. Thanks for 
taking our questions. If you would like to respond--I saw you 
trying to respond. If you would like to give an answer you can 
take 45 seconds here.
    Mr. Mulvaney. Just very briefly, we are enforcing the law. 
To Mr. Meeks' point, I have it within my discretion--along the 
list of things that Mr. Hensarling went down that I could do 
that he didn't talk about in his opening statement, I could 
today, if I wanted to, dismiss every single one of those 25 
pieces of litigation. I could stop all 100 investigations that 
are ongoing right now. We have chosen not to do that, because 
we are still enforcing the law. We are just doing it 
differently and with more restraint than the previous 
leadership was doing.
    I will defend that. I have a different view of the world 
than my predecessor does, just like you have a different view 
of the world than the folks who sit on the other side of the 
aisle. But we are still enforcing the law. I am in the 
Executive branch of Government, and my job is to enforce the 
law. We are doing it. We are doing it differently than other 
folks might do it, because elections do have consequences.
    But to say that we are not enforcing the law or we are 
acting illegally--and I don't think Mr. Meeks implied that I 
was doing anything illegally--is just not accurate.
    Mr. Pearce. One of the charges of our predecessor--or your 
predecessor--was protection of the consumers. And beginning 
almost at his first day we kept pointing out how he was 
damaging some of the most fragile consumers, and those are the 
ones who live in my district.
    Fifty percent of the homes in my district are manufactured 
housing. And so, when they lumped--when they defined rural, 
they put one of the most--the least populated districts, 
counties in the Nation right in with New York City, and they 
implemented the same laws.
    And so I sat yesterday with a banker from that very county, 
and she said still the rules from that agency are choking off 
their ability to lend money so that most of the banks have just 
gotten out of the products.
    So the definition of rural has gone through many, many 
changes under the previous director. But if you would look at 
that and see if we can un-thread it a bit more, we would be 
happy to work with you.
    We are working with the minority in this committee to try 
to get up the language for the whole balloon notes. That became 
very problematic. Again, the balloons for manufactured housing 
are set in place so they can look at them. They don't re-
amortize, they just look at them every 5 years and continue on 
if the product is still in worthy condition.
    And so, if we get language, I would really like for you to 
use the language we have come up with in bipartisan fashion 
here with the Ranking Member's office and ourselves. So we have 
that question.
    So finance is another thing. Many times people live their 
lives, they will buy six, seven, eight of these manufactured 
houses. They will live in one, then they will--when they 
retire, they sell them, one at a time. And so the previous 
director put a cap on that at three. If we could extend that 
back out--what we have done, when they put that cap, is we 
limit finance to people who are very fragile, financially. They 
are usually at the bottom end of the economic spectrum. 
Usually, they don't have good credit ratings, and people will 
take a chance on them.
    So it is one of the ways that we make a rural, low-end 
economy work. And the previous director had closed off so many 
avenues to people just trying to get by. And so those things 
just make common sense.
    And we were in a year-long discussion with the previous 
director, and it is almost as if they couldn't hear, that they 
didn't want to hear that we were actually out there trying to 
get consumers protected and actually trying to do things that 
would help them out. So just--that is important.
    Now, one of the ways that the previous director really said 
he was working on was data, and I think that I would like for 
your perspective, now that you are in the office. How data-
driven were they? Because I could never see the correlation, 
myself. And then maybe explain which direction you are going 
in, in the use of data.
    Mr. Mulvaney. Here is how I would answer that question, is 
that, first of all, I think I mentioned before the role of 
qualitative analysis versus quantitative, which I think is 
substantively very different. Not to say that neither of them 
have any value, but clearly qualitative analysis can be 
somewhat subjective, by definition.
    If there is one complaint that I think I have heard from 
the financial services providers as a group, writ large, is 
that they felt like their input was always ignored. They felt 
like--and I am not saying this is, because I wasn't there, but 
they felt like the decision had been pre-cooked, and that the 
Bureau was just checking the box when they reached out to 
folks.
    To the extent anybody felt that way, from consumer 
advocates to industry advocates, we are hoping to do that 
differently under my leadership.
    Mr. Pearce. Thank you. My time has expired. I yield back.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Massachusetts, Mr. 
Capuano.
    Mr. Capuano. Thank you, Mr. Chairman.
    How are you doing, Mr. Director? I am not sure. I am 
hearing a lot of rumors today. My understanding is--I would 
like you, right from the horse's mouth. Is it true that you 
intend to run for the Speaker of the House next year?
    Mr. Mulvaney. It is interesting, because I don't think you 
have to be a Member to run, right?
    Mr. Capuano. You don't.
    Mr. Mulvaney. That is--
    Mr. Capuano. No, you can be--one more job, wouldn't hurt.
    Mr. Mulvaney. I have two jobs, that is enough for me.
    Mr. Capuano. Two is all you want? We might actually be able 
to throw in a few extra bucks for you.
    Mr. Mulvaney. Would you vote for me?
    Mr. Capuano. It depends. We could talk.
    It depends what you do with the CFPB.
    Mr. Mulvaney. No, I am happy with the two I have. Thank 
you, sir.
    Mr. Capuano. All right. Thank you, Mr. Director. Mr. 
Director, I just want to follow up on what Mr. Meeks had to 
say. And I think the litany of people in this current 
Administration and their beliefs really proves beyond a shadow 
of a doubt, in case anybody wonders, that elections have 
consequences.
    And I am not surprised that any of those appointments--or 
at least the philosophy shared by any of them--by the Trump 
Administration. He doesn't believe in Government, and he won 
the election. I don't like that, but it is a fact, and I think 
people at home need to know that.
    I want to talk about a little issue, a smaller issue, a 
different item. I am just curious. At one point you earlier 
said that discrimination is abhorrent. Do you believe that 
women should be paid equally for the same work as a man?
    Mr. Mulvaney. Actually, I do, and I think that is the law.
    Mr. Capuano. I think it is the law, but I am just curious 
what--your beliefs.
    Mr. Mulvaney. Yes, sir.
    Mr. Capuano. Do you believe that African-Americans should 
be paid the same as white people?
    Mr. Mulvaney. Yes, sir. Again, I think that is the law--
    Mr. Capuano. And Hispanics and on and on and on.
    Mr. Mulvaney. Yes, sir.
    Mr. Capuano. People should be paid the same when they do 
the same work.
    Mr. Mulvaney. Again, I think that is the law, yes, sir. And 
I agree with that.
    Mr. Capuano. That is what I want to know. And I am glad. I 
thought you did, but I wanted to hear it.
    Then when that happens, in order to have not just the law, 
but to actually fulfill it, how do we know what is happening if 
we refuse to take information from employers as to how they pay 
their people?
    Mr. Mulvaney. I am sorry, I am hard pressed, Mr. Capuano, 
as to how this ties to what the Bureau is doing, helping--
    Mr. Capuano. Well, what it ties to is a direction that you 
took last September to stop the EEOC from instituting a new 
form that they worked on for 7 years--7 years--to try to find 
out--to try to prove, one way or the other, whether employers--
and I think most of them are, but some employers are not 
fulfilling their legal requirement. Some employers may be doing 
it intentionally, may be doing it unintentionally. But how 
could you possibly know, without the information?
    Mr. Mulvaney. And Congressman, I am sorry, I don't mean to 
dodge the question, but I believe that is a--that you are 
talking about something I did in September. It must be OMB. And 
I recall a little bit of something about the changes that we 
made to the--I think it was the EEO1 form, or--
    Mr. Capuano. Yes, that is correct.
    Mr. Mulvaney. The EO1 form, or something like that. But in 
all fairness, I have not looked at that since September. And I 
am not trying to dodge, I would be happy to answer that 
question--
    Mr. Capuano. That is a fair answer. But that is also 
troubling, that you haven't looked at it since September. If 
you are going to have two full-time jobs, two full-time jobs is 
what you have, which means if you stop something, which you 
actively took active action to prevent this new provision from 
coming in place, then I think you have an obligation to take a 
look at it, since between September and now, especially when it 
impacts millions upon millions of women and African-Americans 
and Hispanics--we all know the numbers. Women make $.80 on the 
dollar. African-Americans, I think, it is $.57 or $.63. 
Latinos, 54 cents on the dollar.
    We all say that we want to do something about it, yet the 
one time we take a step toward doing it, you proactively 
stopped it. And I am just wondering. When are you going to get 
around to looking at it, so you can actually do something about 
it?
    Mr. Mulvaney. And again, Congressman, I am not trying to be 
evasive, but I have not been asked that question, I don't 
think, since September. And I have done 15 press conferences, 
and I have been in front of Congress 3 or 4 times. So I 
apologize, I am just simply not prepared to talk about that.
    I am not saying that what you said is inaccurate, but I am 
also not admitting that it is true. And I look forward to 
talking to you about it.
    Mr. Capuano. It is fair, I am not trying to do a gotcha 
type of thing. And to be honest, I am a little surprised nobody 
has asked you.
    Now, it is, to me, surprising in this day and age that we 
can have a whole group, several classes of people, being 
intentionally or even unintentionally paid less, and yet this 
Government refuses to do anything about it. And I--again, I 
appreciate it. I am not trying to get you today. But at some 
point in the near future, I would like to hear from you as to 
when you or your agency plan on taking action to correct the 
situation.
    Mr. Mulvaney. Yes, sir. Thank you.
    Mr. Capuano. With that, I--
    Mr. Mulvaney. And if I suggest--if you want to send me a 
letter at the OMB office, I would be happy to respond to you in 
writing.
    Mr. Capuano. We shall be doing just that.
    Mr. Mulvaney. Thank you, sir.
    Mr. Capuano. With that I yield back my 18 seconds 
remaining.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from Pennsylvania, Mr. Rothfus.
    Mr. Rothfus. Thank you, Mr. Chairman. Welcome back, 
Director Mulvaney.
    Mr. Mulvaney. Yes, sir, Mr. Rothfus.
    Mr. Rothfus. Talk a little bit about this regulation by 
enforcement, the CFPB with the UDAP, the Unfair, Deceptive, and 
Abusive Acts and Practices authority it has, it--you mentioned 
in your op ed about how the CFPB was ``pushing the envelope.''
    While there is some precedent that can provide us with an 
interpretation of what is unfair or deceptive, it is still 
unclear what ``abusive'' means. This allowed your predecessor 
to regulate by enforcement on a case-dependent basis. It also 
created uncertainty for market participants about what the 
rules actually were.
    I am wondering if you can comment on why it is important 
that market participants have a clear understanding of the 
rules.
    Mr. Mulvaney. Yes, I am--thank you for that. And I tell you 
if I wanted to add to the list of things that y'all could help 
me with, help me with the definition of ``abusive.'' Give me 
some legislative guidance on that, because it is full of gray 
areas in the way the statute is written right now. It is--it 
can be abusive if it materially interferes with the ability of 
a consumer to understand a term or condition of a consumer 
product, financial product, or takes unreasonable advantage.
    For the lawyers in the room, they will know that those are 
all very, very subjective terms: ``materially unreasonable'' 
and ``materially reasonable.'' It is throughout the statute, 
which gives a great deal of discretion to my predecessor, and 
now a great deal of the discretion to me. What I think might be 
material could be very different than what Mr. Cordray 
intended, and I am not sure that was the intent of what 
Congress wanted to do.
    It is the statute, but if y'all could help me with some 
guidance on what that means, that I think would provide clarity 
for everybody, because right now you are in the exact 
circumstance that I think Mr. Meeks may have mentioned before, 
about swinging wildly from one interpretation on the left to 
another on the right, depending upon who is in charge. That is 
never a formula for certainty in the marketplace--
    Mr. Rothfus. Well, certainty and due process. Where does 
due process come out in the mix on that?
    Mr. Mulvaney. Not on that piece of paper.
    Mr. Rothfus. I understand the Bureau has published a 
request for information regarding the public reporting of 
consumer complaint information. This is an important issue, and 
I applaud the Bureau for taking it up.
    Like many on this committee, I am concerned about consumer 
privacy and the potential for consumer complaints to be 
misinterpreted or misused. This information could be a helpful 
public resource, if presented correctly. But it could also 
mislead the public if not properly handled.
    I urge you to carefully consider what information should be 
published and how it should be presented, going forward. I 
understand that you may need to be somewhat constrained in your 
remarks, since the process is still ongoing. But any insight 
you could provide on this issue would be helpful.
    Mr. Mulvaney. I do share your concerns, and maybe we can 
talk, if somebody wants to, about some of the data security 
issues that we face, as an agency. I haven't had that question 
yet. I would be happy to talk about that. But I am very much 
concerned about the privacy of that data, about the use of that 
data, about the unverified nature of some of that data. So we 
are taking a long, hard look at it within the Bureau.
    Mr. Rothfus. What would you expect to see if the CFPB were 
subject to an appropriations process?
    Mr. Mulvaney. That we act a lot more accountably to you 
folks.
    Mr. Rothfus. You would have to justify things like an 
economist who might not be spending half of their time on CFPB 
work?
    Mr. Mulvaney. Let me put it to you this way. This Bureau 
has been around for what, now, 6, 7, 8 years? Something like 
that? Did y'all know about that before today? I didn't. It took 
me--I found out about a month ago. Do you think if I had been 
on--if the Bureau had been under appropriations that someone 
may have found out about that before today? Probably so.
    And you may decide it is a great use of money, and that is 
fine. But my point is an appropriations process helps shed 
light on things, and y'all are voluntarily choosing not to do 
that, and I do hope you would remedy that situation.
    Mr. Rothfus. Maybe we could shed some light on the 
construction of the workspace at the CFPB and the kind of--
    Mr. Mulvaney. The construction accounts, the average 
salary. I got--what is it, 380, 381? I think 381 people who 
work for me that make more than you do. Did y'all have any idea 
about that? Would you have known about--and again, you may 
think that is completely fine and justifiable, but it is 
knowledge that you have not had for the last several years, 
because there is simply a lack of transparency into the Bureau 
that would be brought to the fore by going through the 
appropriations process.
    Mr. Rothfus. With that, Mr. Chairman, I would yield you 
time, if you would like to ask any questions.
    Chairman Hensarling. I do want to return back to this use 
of the term ``abusive.'' I am sorry, Mr. Director, is there a 
clarification?
    Mr. Mulvaney. No, the number was 370 folks who work there 
who make more than you, not 381. I apologize.
    Chairman Hensarling. So with respect to the term 
``abusive,'' your predecessor could never answer the question. 
You gave us the statutory definition, which shed absolutely, 
positively no light.
    So we have the UDAP terms of unfair and deceptive. There is 
long case history on what those mean. We know that the Bureau 
has moved to find some products abusive. But can a product be 
abusive without either being fraudulent, deceptive, or unfair?
    Mr. Mulvaney. Given the definition, I don't know the answer 
to that question.
    Chairman Hensarling. So do you consider it to be absolutely 
redundant?
    Mr. Mulvaney. I consider it to be almost entirely 
discretionary, which frightens me probably even more.
    Chairman Hensarling. The time of the gentleman from 
Pennsylvania has expired. The Chair now recognizes the 
gentleman from Missouri, Mr. Clay, Ranking Member on the 
Financial Institutions Subcommittee.
    Mr. Clay. Thank you, Mr. Chairman. And welcome back, Mr. 
Director. Hopefully your golf game has not suffered over the 
last few months.
    Mr. Mulvaney. It is miserable. Mr. Gowdy beats me regularly 
now, which I can't stand.
    Mr. Clay. Let me say that I welcome your discussion this 
morning. And I would like to talk about the semi-annual report 
of the CFPB and your role to address the fair lending mission 
of the Bureau.
    I want to turn your attention to a February 2018 article 
published by the St. Louis Post Dispatch--my staff will share 
it with your staff--about a couple wanting to purchase a home 
in a predominantly African-American community, but was 
encouraged by the loan officer of U.S. Bank to look in other 
neighborhoods. So a bank loan officer is virtually steering 
borrowers to other neighborhoods, as the article stated. I 
believe that is redlining, and is breaking the law.
    This being the 50th anniversary of the Fair Housing Act, 
how will you ensure that lending discrimination is not a 
prevalent practice among lenders?
    Mr. Mulvaney. The same way it has been done since this 
Bureau was created. Like I said, we have 100--the reason I 
turned around to ask the question is I did not know if we have 
an active investigation of U.S. Bank going right now, and we 
are not really sure. Again, there is--
    Mr. Clay. OK.
    Mr. Mulvaney. --nearly 100 of them. But that process has 
not changed. I have not changed the investigative process, we 
have not changed the sue-or-settle process. We are continuing 
to enforce the law.
    And if it turns out--granted, we both know that sometimes 
things we read in the newspaper aren't entirely accurate--
    Mr. Clay. Sure, sure.
    Mr. Mulvaney. But under certain facts and circumstances, 
that would be perceived as being illegal activity, and 
something that we would pay attention to and seek to remedy.
    Mr. Clay. Thank you for that response. Well, the Bureau's 
Office of Fair Lending and Equal Opportunity has had many 
successes, including record court settlements for consumers who 
were illegally discriminated against in credit card, mortgage, 
and indirect auto lending. And you recently made changes to 
diminish the powers and role of their critical office.
    Is it your view that these laws simply aren't a priority, 
or that you don't intend to enforce--
    Mr. Mulvaney. Neither of those things. And I would 
actually--I don't agree with the representation that we are--
diminishing the powers. I have mentioned before it does--it has 
two functions. It does a supervision enforcement, which is part 
of the Office of Fair Lending, and then it does an education 
component.
    Within CFPB, those things traditionally have been 
separated. We have an Office of Supervision and Enforcement, 
and an Office of Education. And all I did was simply put the 
two things within fair lending under what I considered to be 
the appropriate branch of the organization.
    Mr. Clay. And you still believe--
    Mr. Mulvaney. Did not lay off a single person, did not 
change anybody's job description. I think they may change who 
they answer to, but their duties have not changed. It is simply 
a re-organization within the Bureau.
    Mr. Clay. OK. Final point, then. Appraisals of real estate 
appear to be a contributor to discrimination in our housing 
market. And as you are probably aware, African-American family 
wealth is one-tenth of white American family wealth. Do you 
think the CFPB has a role to play in eliminating racial 
discrimination in our housing market?
    Mr. Mulvaney. We absolutely have a role to play in 
eliminating discrimination in the housing market. Yes, sir.
    Mr. Clay. And you know, having served with you, I have 
always found you to be a straight shooter. And if you see--and 
you call balls and strikes. And if you see something wrong, you 
don't shy away from it. So hopefully, in this instance, we can 
work with your Bureau to try to root out discrimination.
    Mr. Mulvaney. Thank you, sir.
    Mr. Clay. Thank you, and I will share the article with you.
    I yield back, Mr. Chairman.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from Texas, Mr. Williams.
    Mr. Williams. Thank you, Mr. Chairman, and Acting Director 
Mulvaney. It is good to see you here today. It is always a 
pleasure to welcome a former Member of this committee to 
testify, and we miss having you sit amongst us. And I also miss 
you and will miss you at the baseball practice that--our team 
has always been better with you on it.
    Mr. Mulvaney. Still hoping to be invited to a couple of the 
practices.
    Mr. Williams. Be nice to me, then. All right.
    You are right when you say that the CFPB is far too 
powerful with precious little oversight of its activities. Far 
too long the Bureau has taken actions which unfairly target 
businesses, hurt customers, and impose big-government policies 
with far-reaching implications for the financial market. Your 
leadership, as acting director of the CFPB, has become a 
welcome change from that of your predecessor. I am glad, too, 
that our friends on the other side of the aisle are finally 
recognizing you as the rightful acting director.
    First question, I applaud the important work that this 
Administration has done to roll back some of the 
unconstitutional overreaching authority of the Bureau, but I 
also recognize that more needs to be done. So what can be done 
to ensure that under any new director or Administration the 
CFPB cannot reverse course and again enact failed policies that 
harm American consumers and businesses?
    Mr. Mulvaney. You have to change the statute. The way the 
statute it written now, in order to prevent that pendulum 
swinging from the right to the left, from the right to the left 
with alternating Administrations, you have to change the 
statute. That is why I say that it is the DNA, it is the 
structure of the Bureau that needs to be fixed.
    I can fix things the way that y'all want me to fix them, 
OK, and would upset those folks. And then, if a Democratic 
Administration comes in, they will fix them the way these folks 
would like to see it and it would upset you folks. But it 
wouldn't bring very much constancy or certainty to the markets. 
Markets--including certainty for the consumers.
    So that is why I say, in order to fix it, you have to take 
the discretion away from the Bureau--most specifically away 
from the director--and take back the authority as the 
legislature of the country. And that is why we have made the 
specific--the four specific recommendations in the semi-annual 
quarterly report. We would love to take you up on those things.
    That is why we support a lot of the work that this 
committee has done on a bipartisan basis to reform the Bureau. 
But it needs to change in the law. Otherwise, it will go back 
and forth and back and forth and back and forth.
    Mr. Williams. The next question I have for you concerns the 
Bureau use of discretion rulemakings. Congress gave the CFPB 
the authority under section 1022 of Dodd-Frank to exempt 
institutions based on size. Yet in the past it has not 
exercised that authority.
    In fact, I have a bill, the Community Financial Institution 
Exemption Act, that would strengthen section 1022 by exempting 
credit unions and community banks under $50 billion in assets 
from the CFPB rulemakings, unless the CFPB and other Federal 
regulators have cause to include them.
    So should the Bureau take better advantage of its authority 
to exercise 1022 authority in future rulemakings?
    Mr. Mulvaney. And I think we have already indicated an 
interest in doing that. As I discussed earlier, on the--our 
notice of what we are going to review in the Home Mortgage 
Disclosure Act, the HMDA rules, are the scope and what 
financial institutions are covered. The size of the financial 
institutions that we are going to cover is exactly one of the 
things we want to gather information on and take a look at. And 
it is pursuant to the authority you have just referenced.
    Mr. Williams. Good. Third, since your arrival you have 
brought about a starkly different mission and culture at the 
Bureau than your predecessor. What steps have you taken to 
right-size the organization, and what bureaucratic hurdles 
prevent you from hiring, firing, or changing the role of 
personnel and office structure as needed to fulfill the 
Administration's vision for the CFPB?
    Mr. Mulvaney. Nothing limits my--well, nothing. Almost 
nothing limits my ability to hire. The only limitation I have 
on hiring people is the amount of money I am allowed, by law, 
to draw down from the Federal Reserve.
    There are significant restrictions on my ability to reduce 
the size of the force, significant restrictions on my ability 
to re-assign people. There is a restriction on where this 
office can physically be located. So there are a bunch of 
restrictions on the actual operation of the Bureau itself.
    Mr. Williams. OK. Mr. Chairman, I yield my time back to the 
Chair.
    Chairman Hensarling. I thank the gentleman for yielding to 
the Chair.
    Mr. Mulvaney, I am curious, as I look at some of the 
rulemaking that has occurred prior to you coming to the 
committee--I am sorry, to the Bureau.
    For example, this committee, as you probably know, since 
you were here, put out several staff reports indicating how 
CFPB's indirect auto lending guidance was essentially unlawful, 
how it hurt consumers, how many consumers were forced to pay 
over $500 more in interest. And indeed, our investigations 
revealed that the CFPB's own attorneys questioned their own 
legal theories. Perhaps this was part of that pressing the 
envelope. How come this guidance hasn't been formally 
withdrawn?
    Mr. Mulvaney. We are reviewing it.
    Chairman Hensarling. That is the answer?
    Mr. Mulvaney. We are reviewing it now, yes, sir. And I 
usually don't go into the internal discussions between us and 
our lawyers and stuff, so--
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Massachusetts, Mr. 
Lynch.
    Mr. Lynch. Thank you, Mr. Chairman. And Director Mulvaney, 
welcome. Thank you for appearing before this committee to help 
us with our work.
    I do want to touch upon a couple things. One is I know that 
there is some contest about the appropriateness of your 
appointment, and so I don't want any of my questions or my 
engagement with you to count against those who might challenge 
the appropriateness of that appointment.
    Mr. Mulvaney. Understood. Thank you, sir.
    Mr. Lynch. However, I do want to touch on one thing that 
you mentioned at the outset, and that is that you are not 
required to come before this committee and testify, that you 
could--I think I am quoting you--sit there and twiddle your 
thumbs.
    I do want to point out--first of all, do you--were you 
saying that in jest? I know that you are fairly comfortable 
here, having been a Member.
    Mr. Mulvaney. No, sir. And I hope I have proven by my 
responses that I am interested in answering--
    Mr. Lynch. Oh, yes, yes. I am just--
    Mr. Mulvaney. So--
    Mr. Lynch. I am just--I know you are not standing on that 
point.
    Mr. Mulvaney. Yes.
    Mr. Lynch. I am just questioning whether you actually 
believe in it.
    Mr. Mulvaney. No, I do. I--any lawyer will tell you that 
when you are faced with competing language, similar language in 
two sections of a statute, and one says X and one says X plus 
Y--
    Mr. Lynch. All right, OK.
    Mr. Mulvaney. --we assume that there is--
    Mr. Lynch. I just wanted to test that. You realize it is 
the same language that is in the Federal Reserve Act, where we 
have the Chairman of the Federal Reserve come up here and 
testify. He is just required to appear, as well. And I would 
say on behalf of Congress and you as a Member, we never would 
allow the Chairman of the Federal Reserve Board to come up here 
and just sit there and twiddle his thumbs and not respond to 
Congress. We have an oversight responsibility.
    And I hope it is not reflective of your view of our role 
here, that you could somehow resist or refuse to engage with 
us, especially where you have the responsibility over the 
Consumer Financial Protection Bureau. And, maybe that is 
something for the lawyers to fight out later on, but I 
certainly want to maintain Congress' ability to have you engage 
in a meaningful way.
    On top of that, we know--I served with you. You served 
honorably, and you stuck to your guns, no question about it. 
But you were clearly, clearly one of the people who was most 
hostile to the creation and operation of the Consumer Financial 
Protection Bureau.
    Mr. Mulvaney. I wasn't here for the creation. But yes, sir, 
it is fair to say that I was hostile to the existence of the 
Bureau.
    Mr. Lynch. Yes. So it shouldn't come as a surprise that 
many on our side of the aisle, those who have the highest hopes 
for consumer protection, would see you the fox in the hen 
house, right?
    Mr. Mulvaney. Doesn't surprise me at all. No, sir.
    Mr. Lynch. Yes. There is some credence to that. And before 
you took over, we had about one investigation a week that was 
going on, we had--we still have a million complaints to the--
outstanding to the portal, the CFPB website. We got stuff like 
Wells Fargo, where they are actually robbing their customers, 
creating false accounts and--so the need for enforcement has 
not gone away. And I know you say you have only laid off 10 
people.
    Mr. Mulvaney. I have not laid off anybody, but the--we 
have--
    Mr. Lynch. All right, so you got 10--I am just wondering. 
Since you are not doing enforcement like Cordray was doing, 
your predecessor, what are the enforcement people doing?
    Mr. Mulvaney. Again, I don't think it is fair, Congressman, 
to say we are not doing enforcement. You mentioned one 
investigation--
    Mr. Lynch. Well, you haven't initiated any enforcement 
actions. We had, like, one a week before you got there. And 
then you got there and, as I said before, you are hostile to 
the operation of the CFPB, you are not into protecting 
consumers, and all of a sudden the investigations stop.
    Mr. Mulvaney. Yes, I--
    Mr. Lynch. They stop. So we got a goose egg. We got 
thousands before, you get in there and now we got zero. The 
clear implication is that the people who were enforcing before 
are not enforcing any more. And all I want to know is what the 
heck are they doing now, because they are not enforcing the 
law.
    Mr. Mulvaney. And I will respectfully disagree with some of 
the representations there. But here is how it works. If you 
give me just a moment, I will do this very quickly.
    There is a process, OK? It is a tunnel. And at the 
beginning of the tunnel--
    Mr. Lynch. I know. You got three buckets. I heard that 
already. But one bucket is--
    Mr. Mulvaney. But I never actually explained it, though.
    Mr. Lynch. That is the enforcement initiation bucket--is 
empty. You are not doing that--
    Mr. Mulvaney. No, sir.
    Mr. Lynch. --any more.
    Mr. Mulvaney. And that is what I am trying to tell you, 
sir. It is not empty. It is simply--when you look at the--
    Mr. Lynch. It is what Cordray left you, but you are not 
doing any initiation of any enforcement. You testified to that 
earlier, sir.
    Mr. Mulvaney. I answered a question, Congressman, which is 
have I filed any lawsuits since I have been here. The answer is 
no. That does not mean we are not doing supervision or 
enforcement. And again, I would be happy to explain that in 
writing to you, if I need to, about how the process works--
    Mr. Lynch. You initiate--tell me--all right. Give me one 
case that you have brought since you got there.
    Mr. Mulvaney. As I said we have not filed any lawsuits--
    Mr. Lynch. There you go.
    Mr. Mulvaney. --since I have been there.
    Mr. Lynch. All I can say. All right.
    Chairman Hensarling. The time of the gentleman has expired.
    Mr. Lynch. My time has expired. Thank you, Mr.--
    Chairman Hensarling. The Chair now recognizes the gentleman 
from Maine, Mr. Poliquin.
    Mr. Poliquin. Thank you, Mr. Mulvaney.
    Thank you, Mr. Chairman, very much, for the time.
    Mr. Mulvaney, over here. Thank you very much. Mr. Mulvaney, 
just to make sure I understand this and everybody watching 
understands this, you do not have a directive to come here and 
answer our questions. Is that correct, sir?
    Mr. Mulvaney. I am sorry?
    Mr. Poliquin. You do not have the directive in statute to 
answer our questions today.
    Mr. Mulvaney. I believe that the statute is written in such 
a way that allows me not to--
    Mr. Poliquin. OK. So you could come here and just tell us 
to pound sand.
    Mr. Mulvaney. I believe that to be the case. Yes, sir.
    Mr. Poliquin. OK. Second of all, we don't appropriate--
    Mr. Mulvaney. And so could anybody else who sits in this 
chair.
    Mr. Poliquin. Yes, I understand, sir. Congress, i.e. the 
people's representatives, do not appropriate any money to CFPB. 
You get your earnings from the Fed.
    Mr. Mulvaney. Correct.
    Mr. Poliquin. OK. And I remember when Ms. Yellen was here, 
Chair Yellen was here about a year ago, Mr. Barr asked her 
specifically, ``Do you oversee the budget at all of the CFPB,'' 
and she couldn't answer the question.
    Mr. Mulvaney. I think the answer is no.
    Mr. Poliquin. OK.
    Mr. Mulvaney. The statute certainly does not provide for 
any oversight by the Federal Reserve over the budget of the--
    Mr. Poliquin. And you don't report to any board?
    Mr. Mulvaney. No, sir.
    Mr. Poliquin. OK.
    Mr. Mulvaney. No, I don't report to anybody.
    Mr. Poliquin. So we don't appropriate any money to you, you 
don't report to any board. The head of the CFPB can be removed 
for cause from--with the--by the President, but only for cause. 
Correct?
    Mr. Mulvaney. That is what the statute says. Yes, sir.
    Mr. Poliquin. OK. Mr. Mulvaney, I remember--and we agree on 
a lot of things here--I remember my time as State treasurer in 
Maine, and we ran into a certain type of organization in the 
affordable housing space called Maine State Housing Authority. 
And as State treasurer, I was on that board, along with others. 
I will never forget this as long as I live.
    We had an executive director with a 5-year term appointed 
by the Governor that could not be replaced, except for cause. 
The individual did not report to any board, including the board 
that I sat on, which was their board. She didn't report to us, 
or he didn't report to us. And there was no appropriation of 
State funds.
    Now, what we found, lo and behold, was you had an 
organization very similar to yours that you now head, and the 
problem we had with Maine State Housing Authority was many, one 
of which was they were spending about $300,000 of taxpayer 
moneys for 1-bedroom apartments, when the average single family 
home with 3 bedrooms, a bath-and-a-half on a quarter acre of 
land was about 160 grand, and we had 6,000 people on a waiting 
list to come in out of the cold.
    So you are coming to us today and saying--thank goodness 
you are there. You run an organization that is not accountable 
to the American people, has no appropriation of funds, and you 
can tell us to pound sand whenever we ask for something. 
Correct?
    Mr. Mulvaney. I believe that to be the case. Yes, sir.
    Mr. Poliquin. OK. Now, Mr. Barr mentioned--
    Mr. Mulvaney. If I want to spend $300,000 like that, I 
probably could.
    Mr. Poliquin. By the way, how are you doing with your 
downtown office building? What have you folks spent on that so 
far?
    Mr. Mulvaney. $242 million.
    Mr. Poliquin. Do you own the building?
    Mr. Mulvaney. No.
    Mr. Poliquin. OK. I remember myself asking that question of 
the former director a couple years ago. That hasn't changed. 
You finished the building yet?
    Mr. Mulvaney. No.
    Mr. Poliquin. OK. Wow. Do you have multiple offices, or is 
this your only office, Mr. Mulvaney?
    Mr. Mulvaney. We have two office buildings in this city, 
and then we have regional offices in New York, Chicago, and San 
Francisco.
    Mr. Poliquin. Are you able, under statute, to consolidate 
operations to save money?
    Mr. Mulvaney. Yes.
    Mr. Poliquin. Why don't you do that?
    Mr. Mulvaney. We are exploring that possibility right now.
    Mr. Poliquin. Got it.
    Mr. Barr a short time ago mentioned that--and I will give 
you the numbers here--in 2014 there were roughly 56,000 loans, 
small-dollar loans, that were extended for folks that want to 
buy manufactured housing. Two years later, there were about 
36,000 loans that were extended for the small-dollar loans for 
manufactured housing. That is a drop of about a third of the 
number of loans extended to buy manufactured housing in an 
economy that was improving.
    Do you think that has anything to do with the enforcement 
of the CFPB and scaring the daylights out of businesses, 
meaning that we are not going to go as much by rulemaking, 
which we make up as we go along, but instead, if we don't like 
what we see, we will just threaten enforcement?
    Mr. Mulvaney. I certainly think that we run the risk, when 
we pass rules and regulations, of chilling the providing of 
credit to consumers. Yes--
    Mr. Poliquin. What is the one thing, Mr. Mulvaney, you can 
come to us today and ask Congress to help you fix the mess you 
have inherited?
    Mr. Mulvaney. Put me on appropriations.
    Mr. Poliquin. Meaning that the taxpayers will appropriate 
money to you and then ask you questions about why and how you 
are spending the money?
    Mr. Mulvaney. It is sloppy, and we know it can be nasty, 
and I recognize why it was done like this, but that is your 
job. That is what you are supposed to be doing. You are 
supposed to be spending taxpayer dollars--I cannot believe I 
can walk down the street and get $700 million and not have to 
explain to anybody. That is just wrong.
    Mr. Poliquin. In January you released the fall of 2017 
rulemaking agenda to the fall 2017 united--excuse me, unified 
agenda of Federal regulatory--de-regulatory actions issued by 
the Office of Information and Regulatory Affairs.
    Mr. Mulvaney. Yes, sir. That is over at OMB.
    Mr. Poliquin. Good. Among the key rulemaking initiatives is 
one relating to overdraft services, which set out the 
requirements for overdraft-related disclosures. Will this 
overdraft be included in the spring rulemaking agenda?
    Mr. Mulvaney. I have just been informed that our spring 
agenda won't include that line item.
    Mr. Poliquin. Will not include that?
    Mr. Mulvaney. Correct. Yes, sir.
    Mr. Poliquin. When you go down that path, Mr. Mulvaney, I 
implore you to make sure you get voices from everybody. This is 
incredibly important to our community banks and credit unions.
    Mr. Mulvaney. Thank you, sir.
    Mr. Poliquin. Thank you.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now declares a 5-minute recess.
    [Recess.]
    Chairman Hensarling. The committee will come to order. The 
Chair now recognizes the gentleman from Georgia, Mr. Scott.
    Mr. Scott. Thank you very much, Mr. Chairman, Mr. Mulvaney. 
Good to have you back. Enjoyed working with you on the 
committee, when we worked together. Over here.
    Mr. Mulvaney, first of all, I want to point out that what 
you see coming from our side of the aisle and our questions, 
our concerns, they are not just ours. They are not just 
Democratic concerns. These are concerns and worriations (sic) 
of the American people. The whole business of your undermining 
the Office of Fair Lending and Equal Opportunity, that is real, 
Mr. Mulvaney. And something has to be done about it immediately 
to correct it. That is what the American people feel.
    The fact that you had two very vital important agencies--is 
this Nation so weak in executive management leadership that we 
have to have you over two critical agencies that handles--one 
handles the budget and finances of the Federal Government, the 
other protecting the financial transactions and activities of 
the American people? Come on. Somebody is suffering there.
    You are a very talented young man, but no matter--
    Mr. Mulvaney. I am just glad to be described as young, Mr. 
Scott.
    Mr. Scott. These agencies are being disrespected, they are 
being demeaned, the fact that they do not have a person at the 
top of each of these agencies.
    But then, on top of that, you are clearly out to destroy 
the CFPB. And you really make no bones about it. There is a--
there--I don't like the CFPB. It turns up being a joke. And 
that is what the CFPB really has been in a sick, sad way. And 
some of us would like to get rid of it. That is what you said. 
And that is wrong.
    But here is the point. The point is that you are the prime 
example of why we, when we passed Dodd-Frank, when we passed 
the CFPB, we made it a commission for this very purpose. The 
fact that you are in there with the mission from your President 
to dismantle and destroy the CFPB--now, hey, I am not jumping 
on you for doing what your boss wants to do.
    All I am simply saying is that that is why we made it a 
commission pointing out. And we have to come to Jesus on that 
moment and understand going forward why it is important, why we 
do not need to have the management and the protection of the 
financial transactions of the American people changing every 4 
years at the whim of the wind of changing Administrations. And 
so I hope that we can get that.
    But anyway, I wanted to get those points out so you 
understand this is real serious here.
    This is a--and let me tell you I represent Democrats and 
Republicans. I have one of these huge crossover districts. I go 
one county over from the Alabama line. So what I am trying to 
tell you is this is a concern of the American people, and that 
we have to deal with it.
    But I do want to--I tell you what I am disappointed in more 
than anything else is the fact that in your report you mention 
nothing about your Operation Catalyst, this catalyst group that 
you have that is designed to go in here and develop rules and 
regulations for Fintech, our very innovative and new frontier 
of working in the--combining our financial services with our 
emerging and fast, rapidly changing technology. And you have 
that.
    Could you tell us--could you give us an update on this 
catalyst project that you have there? The reason I want you to 
do that is my staff and I, we are working on legislation--I am 
the Democratic Chair of the Fintech Caucus--so we can bring 
some harmonization. But tell us what you are doing with 
Fintech, and tell us about this catalyst project.
    Mr. Mulvaney. Thank you, Mr. Scott. Very briefly, just 
because it is not in the quarterly report or semi-annual report 
doesn't mean it is not a priority. When we wrote the semi-
annual report, what we did is we went to the statute that said 
the semi-annual report should contain the following things, and 
we followed the statute, and the Fintech catalyst is not part 
of the statutory requirements. So that is why it is not in the 
report. It doesn't mean it is not important to us. And it is.
    I don't know if you remember this or not. I am actually the 
co-founder of the Blockchain Caucus here in my time.
    Mr. Scott. Yes, you were there, and that is why--
    Mr. Mulvaney. So I am very interested in--
    Mr. Scott. Yes, that is why I was surprised.
    Mr. Mulvaney. We are spending a good bit of time trying to 
figure out a way to create--it is called, for lack of a better 
word, a Fintech sandbox, a new technology sandbox, to try and 
figure out a way to allow these new industries to develop 
without the type of regulation that stifles them, while still 
protecting consumers at the same time.
    It is a balancing act, but we do--it is a priority for us, 
we are spending time on it--
    Mr. Scott. Very good.
    Mr. Mulvaney. --we have some really good people on it.
    Mr. Scott. Well, I would like for you to have my staff, 
or--my staff, who is helping to put this legislation together 
to meet with yours.
    But what about the no-action letters that are--do you 
attend--
    Mr. Mulvaney. We are--we continue to look at that as a 
potential tool.
    Mr. Scott. All right, thank you.
    Chairman Hensarling. The time--
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Illinois, Mr. 
Hultgren.
    Mr. Hultgren. Thank you, Chairman.
    Director Mulvaney, thank you. I am over here. Good to see 
you. And grateful for your service. I really enjoyed serving 
with you here, and grateful for the work that you are doing at 
CFPB and OMB. I know it has just got to be a ton of work. I 
can't imagine. But grateful for your willingness and the good 
things that are happening.
    And overwhelmingly, the response I am hearing from my 
constituents is gratitude. A lot of my community banks, others, 
really recognize the good work you are doing of bringing some 
accountability to a Bureau that has been totally unaccountable. 
So thank you for that.
    Two specific things. I want to thank you for revisiting the 
Home Mortgage Disclosure Act regulations. I agree with the 
principle of reporting this information to fight against 
discrimination in housing, but our rules should also recognize 
the cost. In this case, potentially unnecessary and burdensome 
reporting of information and also potential privacy issues if 
this information were made public.
    I also want to thank you for revisiting portions of the 
pre-paid card rule, and extending the effective data. I believe 
some regulation is appropriate, especially consumer-friendly 
disclosures. But that doesn't mean we should have regulations 
that preclude consumer-friendly financial products. So thank 
you for your work, especially in those two.
    I want to start off. Earlier you were being asked about 
your enforcement posture, and you mentioned three buckets. You 
didn't get--have a chance to finish. I wonder, in 30 seconds or 
a minute, if you could clarify what is happening.
    Mr. Mulvaney. Sure, real quickly. There is a transition, 
there is a pipeline when it comes to enforcement actions, 
which--we are running, at any particular time, about 100 
investigations. And we maintain that, which means that roughly 
two roll on, two roll off a week, on average, right? We 
maintain about 100.
    Chairman Hensarling. Director Mulvaney, could you pull the 
microphone a little closer to you?
    Mr. Mulvaney. Yes, sir. When the investigation turns up 
wrongdoing that we believe rises to the level of having to move 
to an enforcement action, then it moves into the bucket that we 
call sue or settle, where we sit down with folks and say, 
``Look, you have misbehaved, we think we have you,'' and we are 
either going to file suit or you are going to settle and you 
are going to pay us, just like you would in any particular 
litigation. And if we are unable to resolve it there, then it 
moves into litigation.
    And the only thing that has been different or--the only 
thing that has happened that seems to be noteworthy in my 5 
months there is we just don't have anything move out of sue and 
settle into the actual litigation.
    Once there is a litigation we then pursue it to the end, 
and those are the 25 ongoing pieces of legislation that we--
excuse me, of litigation that we continue to pursue under my 
leadership.
    Mr. Hultgren. Thank you. That is helpful. Let me move on to 
some other questions.
    You have spoken at length about the need for structural 
reforms at the Bureau. I absolutely agree with you, especially 
the focus on bringing CFPB under the appropriations process. 
And with your semi-annual report you propose a lot of great 
ideas, many of which we advocated together when we served 
together on the Financial Services Committee.
    There is one specific structural change that I am hoping 
you might be able to speak to after having spent a few months 
running the CFPB, and that would be a bipartisan commission to 
oversee the agency. As I know you remember, Randy Neugebauer 
had a bill calling for this, and Dennis Ross recently 
introduced a bipartisan bill
    Is it still your belief a commission structure for the CFPB 
provides greater certainty to market participants and 
consumers, and would it make the agency more technical and less 
partisan in nature?
    Mr. Mulvaney. It does. I still believe that, and I think I 
was a cosponsor of that bill when I was here.
    Mr. Hultgren. Yes, thank you. During your time on the 
committee we spent a lot of time discussing issues with the 
CFPB's Qualified Mortgage rule, and the Washington-centric 
underwriting criteria prescribed for lenders. Ironically, the 
rule provides special treatment for mortgages backed by Fannie 
and Freddie, which arguably obstruct private capital from 
entering the mortgage market by giving Government loans a 
distinct regulatory advantage.
    The so-called QM patch is set to expire on January 20, 
2021. I wonder, do you plan to let the QM patch expire? If so, 
have you thought at all about how to make sure that there is a 
smooth transition for private capital to step up and fill the 
void?
    Mr. Mulvaney. Congressman, this falls into the same bucket 
that I have--I mentioned a couple times on a couple of other 
things. This is part of our statutory 5-year look-back, and we 
are currently reviewing that, per the statute, collecting data, 
and so forth. So it is not appropriate to--me to tell you where 
I think it is going to go, because we don't look at that with a 
pre-determined outcome, but we are reviewing those issues, and 
the merits that you just raised will be considered.
    Mr. Hultgren. Good. That is all we can ask.
    Under the past leadership of CFPB one person was both the 
student loan ombudsman and the head of this Office of Students. 
The former is appointed by the Treasury Secretary and the 
latter is hired by the CFPB director. In general, do you 
believe it is important for an ombudsman to be impartial and 
independent, and will you commit to separating these two 
positions? I believe this will contribute to a more balanced 
approach for regulating private lenders of student loans.
    Mr. Mulvaney. I am not sure I am in a position to commit to 
it, but I share some of the concerns, and we are currently 
reviewing the role of that particular personnel.
    Mr. Hultgren. Great. Last couple of seconds. In general, do 
you believe the House could improve on S. 2155, the Senate 
regulatory bill? I think we all believe it is full of a number 
of important provisions, but do you believe there is an 
opportunity for the House to improve it before it is sent to 
the President's desk for--
    Mr. Mulvaney. I do, and I look forward to talking about 
that more perhaps later in the hearing.
    Mr. Hultgren. Thank you very much. My time has expired, I 
yield back.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from Missouri, Mr. Cleaver, 
Ranking Member of the Housing and Insurance Subcommittee.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. Mulvaney, thank you for being here. Can--do you have 
any idea how long you are going to be director of OMB and the 
head person over at the CFPB?
    Mr. Mulvaney. Here is what I--the OMB position I will stay 
as long as the President will have me. That is not a term-
limited type of position. So that is a separate question.
    The CFPB, which I think is what most people ask me about, 
here is what I know about that role, Mr. Cleaver, which is that 
I am allowed under the Vacancies Act to stay for 6 months, 
which I believe ends--expires June 22nd. And if the President 
has not formally nominated somebody by that point, then I would 
have to leave.
    If, however, the President has formally nominated someone 
prior to that date, then I am allowed to stay until such time 
as that person is confirmed by the Senate.
    So the bottom line is I don't know the answer to your 
question. We tell folks, we plan--given how long it's taken the 
Senate to take up confirmations, probably well into the fall or 
the end of this year.
    Mr. Cleaver. Yes, my guess is that there won't be a nominee 
by June. And so I--
    Mr. Mulvaney. Then I would have to leave on June 22nd.
    Mr. Cleaver. Yes. But you can stay there until there is a 
nominee.
    Mr. Mulvaney. No, sir. If there's no nominee made, I must 
vacate the office June 22nd.
    Mr. Cleaver. OK. Because, a concern I had--and thank you 
for the clarification. Because I do believe that Confucius, 
about 25 centuries ago, said, ``The person who chases two 
rabbits catches neither.'' And I believe that. And somebody 
else said something, ``No one can have two masters.'' And I 
believe that as well.
    And in my real life, I'm a United Methodist pastor. And the 
Catholic and Methodist churches actually have bishops who can 
send them places, whether they want to go or not. And I would 
never, ever become the head of the AAI, the American Atheist 
Institute, because I just--I don't like what they do, what they 
stand for. So I just wouldn't go. That just, that would be the 
end. Because it would be difficult for me to go into a place 
when I disagree with the premise of its existence.
    So I'm trying to understand the complexity. You're a smart 
person, and so I'm sure you've done the cerebral analysis of 
this. So help me understand how you could accept going 
someplace where you have a disdain for the existence of that 
place.
    Mr. Mulvaney. Sure. That's actually fairly easy. This is 
how I explain it to people. It's my job. I'm a member of the 
Executive branch of Government. I don't get to change the law. 
My job is to enforce the law. The President has asked me to go 
over and run the Bureau of Consumer Financial Protection. There 
is a statute that says what it shall and shall not do, and I am 
doing those things.
    Mr. Cleaver. I know. But is there--you don't feel a 
conflict that you're going to a place that you are completely 
alien to its very being? You don't have any kind of internal 
conflict to do that?
    Mr. Mulvaney. In fact, I've never thought about this, 
Congressman, but I guess I could make the argument that a 
healthy skepticism might make me a better manager.
    Mr. Cleaver. Well, I think we all--we have to have a 
healthy skepticism about, I think, a lot. I think that helps 
us, our humanity. But to get up every day and go to a place 
that you wish did not exist seems to me would be some kind of 
internal conflict that you that's not easy to resolve.
    Mr. Mulvaney. That's a fair point. I want to make this 
clear, I really enjoy the job. The people there have been 
really, really good to work with. Yes, there's a small minority 
of people who hate me and try and undermine my leadership. But 
for the most part, some of the best quality bureaucratic work 
that I have seen since I've been in the Administration comes 
out of the Bureau. So no, I actually enjoy doing it. I just do 
it differently than my predecessors.
    Mr. Cleaver. Yes. My time is out. It would be a great 
theological argument. Thank you.
    Chairman Hensarling. Time of the gentleman has expired, 
sir. Now, I recognize the gentleman from Colorado, Mr. Tipton.
    Mr. Tipton. Thank you, Mr. Chairman. Thank you, Director, 
for taking the time to be able to be here. I wanted to follow 
up a little bit on my colleague, Mr. Hultgren's question in 
regards to the Senate regulation bill. And you'd indicated that 
you'd like to be able to point to some of the legislation that 
we passed out in the House, how we might be able to improve 
that to make sure that we're getting sensible regulations in 
place. And would you like to address that?
    Mr. Mulvaney. I'm a big fan of regular order, and the way 
that I think it's supposed to work, or at least it used to work 
when I watched it on television as a kid, was that the Senate 
would pass a version of a bill. The House would pass a version 
of a bill. And they'd try and work out the differences to see 
if they could compromise. I think that is the best formula for 
arriving at the best result.
    I happen to like just about everything in the Senate bill. 
I also recognize the fact it doesn't contain several dozen if 
not more bills that have passed out of this chamber on a 
bipartisan basis and the larger House chamber on a bipartisan 
basis, which does make me wonder, why can't we add that to the 
Senate bill?
    There's some really good things, that y'all--and I was here 
when you did some of it--worked together to try and improve 
Dodd-Frank. And I think it makes complete sense to continue the 
debate on whether or not that bipartisan support can translate 
into bipartisan support across on the other side of the Hill. 
So I applaud what the Senate has done. I know it's not easy to 
pass a piece of bipartisan legislature anywhere, let alone in 
the Senate. And I think they've done an excellent job. I don't 
think that necessarily needs to be the end of the analysis.
    And to the extent that y'all have done really good work to 
find ways, on a bipartisan basis, to improve Dodd-Frank, God 
bless you. And let's see if we can't add that to the Senate 
bill. If not, the Senate bill is a great fall back. But if it 
can get better, why wouldn't we accept that as a really good 
outcome?
    Mr. Tipton. And I appreciate that. So if we had a bill that 
came out of this committee with unanimous support, unanimous 
support on the House floor, you don't see that as a poison 
pill?
    Mr. Mulvaney. I know how hard it is to get unanimous 
support in this chamber and on the House floor. So that means 
that the bill might actually have a chance of passing in the 
Senate. So I welcome any efforts to fix, to reform as much of 
the Dodd-Frank, especially the parts that pertain to the 
Bureau, as you possibly can.
    Mr. Tipton. Right. Well, and when you're talking about 
Dodd-Frank, I think one thing we've certainly heard from home, 
particularly from our small community bankers, our small credit 
unions, is the one-size-fits-all approach out of Dodd-Frank. 
And you embrace, I assume, the ability to be able to tailor 
those regulations to be able to meet the size of the 
institution, the applicability of the issues they face?
    Mr. Mulvaney. Yes. I spoke to a group of community bankers 
just this week. And accepting for sake of the discussion that 
the Bureau was created in order to prevent the next financial 
crisis--we can have a really interesting conversation about 
whether or not it could do that, whether or not it's the proper 
role, but let's assume that for sake of this discussion. I 
don't think anybody in this chamber would suggest that the 
community banks or the credit unions were the cause of the 
financial crisis and they should be treated the same as the 
large financial institutions, which in many circumstances is 
what we do, what Dodd-Frank does and what the Bureau does. And 
I'm going to try really hard to try and fix that, to tailor 
regulations to the size and the sophistication of the various 
entities that we oversee, because I just think that makes 
sense.
    Mr. Tipton. Well, and I want to applaud that. I think that 
that's a little change in direction from the previous director, 
just to be able to apply the actual law. I think, could you 
give a little more detail when you're talking about some of the 
quantitative analysis that you're looking at, when you're 
making some of your decisions? Maybe expand on that a bit for 
us.
    Mr. Mulvaney. No, I just want more data. I've read through 
a copy of the cost-benefit analyses on a couple of the previous 
rules that we put out, and I was just not--it would not have 
met my test. And that's how I look at things, is that the 
lawsuit we dismissed, OK, the only one by the way--the filter 
that I ultimately came down to, there's a lot of factors that 
went into it. But the ultimate filter was, would I have brought 
that lawsuit if I were the director at the time it came time to 
file. And that was the only one I said no to, and that's why we 
dismissed. And I bring the same analysis to the cost-benefit 
analysis that I see, which is, I look at the stuff and say, if 
I had been the director, when this came across my desk, would 
this have satisfied me to be sufficient to make a final 
decision, the answer would have been no. And I want to do 
better with that moving forward to where we get better and more 
cost-benefit analysis before we make final determinations.
    Mr. Tipton. Great. Thank you. And Mr. Chairman, I will 
yield to you for any further questions you may have.
    Chairman Hensarling. I thank the gentleman for yielding. 
With respect, among other things, to the QM rule, the 
University of Maryland researchers issued a paper last year 
that said, quote, ``Dodd-Frank aimed at reducing mortgage fees 
and abuses against vulnerable borrowers. The lending 
regulations of Dodd-Frank actually triggered a substantial 
redistribution of credit from the middle class households to 
wealthy households.''
    Under section 1022 of the Dodd-Frank Act, with respect to 
the CFPB, it says, ``In prescribing the rule under the Federal 
consumer financial laws, the Bureau shall consider the 
potential benefits and costs to consumers and covered persons, 
including the potential reduction of access by consumers to 
consumer financial products or services resulting from such 
rule.''
    Let's see. We are well over time. But perhaps one of the 
other individuals on our side of the aisle could let you 
address that issue.
    Chairman Hensarling. The Chairman now recognizes the 
gentleman from Minnesota, Mr. Ellison.
    Mr. Ellison. Thank you, Mr. Chairman. Welcome to the 
Committee, Mr. Mulvaney.
    Mr. Mulvaney. Mr. Ellison, it's good to be back.
    Mr. Ellison. You know what the Doctrine of Absurdity is in 
statutory construction?
    Mr. Mulvaney. I'm sorry--
    Mr. Ellison. Remember law school?
    Mr. Mulvaney. --it's been a long time.
    Mr. Ellison. Yes.
    Mr. Mulvaney. So help me on that one.
    Mr. Ellison. So you started out by saying that under the 
law you could just come in here and sit there.
    Mr. Mulvaney. I think that's one interpretation. Yes, sir.
    Mr. Ellison. Right. Well, under the law of statutory 
interpretation, which I know you know, if an interpretation 
would lead to an absurd result, then you don't apply it that 
way. And you sitting there playing Candy Crush, as the Chairman 
has pointed out, or twiddling your thumbs, as you pointed out, 
that would be an absurd result. So anyway, we start out with 
that. Let me ask you.
    Mr. Mulvaney. And I hope--
    Mr. Ellison. Let me ask you a question. When you got to the 
CFPB, was the glass clear in your office?
    Mr. Mulvaney. Yes, sir.
    Mr. Ellison. Is it frosted now?
    Mr. Mulvaney. Part of it is.
    Mr. Ellison. Is that your office up there on the screen?
    Mr. Mulvaney. Yes, sir.
    Mr. Ellison. So when somebody walks by your office, they 
are obscured from seeing what you're doing? Yes, they are.
    Mr. Mulvaney. Yes. I'm sorry--
    Mr. Ellison. That's the whole point, right?
    Mr. Mulvaney. Yes, no, it is the point, yes.
    Mr. Ellison. That would be the point. And yet you are the 
champion of transparency, right? You're the one who's saying 
that you're the transparency champion. You said, ``We're going 
to spend a little bit more time on things like accountability 
and transparency.'' You said that, right?
    You said a lot of things to that effect. I think one of the 
things you said as well is to various agencies, various 
speeches you've given. Even today you talked about 
transparency. And yet you have obscured yourself physically. 
And I find that to be ironic, sir. And it just occurs to me 
that as we're talking about transparency and all that, and how 
we have to be more accountable, and yet you're obscuring 
yourself. Well, you also got your own VPN, right?
    Mr. Mulvaney. My own what?
    Mr. Ellison. VPN.
    Mr. Mulvaney. I don't think so. Did I?
    Mr. Ellison. OK. Now, I don't know. Maybe we'll see. I 
guess the reporter out there will look into it. But my point is 
that--
    Mr. Mulvaney. I'm on the same email system, I think, but my 
email address is @CFPB, so I think--
    Mr. Ellison. You know what--
    Mr. Mulvaney. --they're the same system.
    Mr. Ellison. --the point is though, is that as you are 
describing how everyone else needs to be transparent, you are 
literally making it more difficult for yourself to be seen.
    Mr. Mulvaney. All right, Mr.--
    Mr. Ellison. I think it's legitimate to raise this issue.
    Mr. Mulvaney. How many times have you seen a witness 
actually answer yes or no questions in this room? And I did it 
to Ms. Velazquez for 10 minutes.
    Mr. Ellison. No, no, no. And let me tell you this. I've 
seen you--I've seen you really make yourself out to be some 
champion of transparency as you are obscuring yourself 
simultaneously. I think that's ironic. How much did it cost for 
you--
    Mr. Mulvaney. Do you believe in transparency?
    Mr. Ellison. How much did it cost for you to put the 
frosting up there?
    Mr. Mulvaney. Thirteen offices were frosted, for a total of 
$3,500. And I've just been informed, by the way, this was the 
original plan, under Mr. Cordray's design, for this office.
    Mr. Ellison. Yes, yes. And yet you're the one who did it, 
not Mr. Cordray.
    Mr. Mulvaney. Do you believe in transparency?
    Mr. Ellison. And he'd been there for quite a while.
    Mr. Mulvaney. How transparent is your door on your office, 
Mr. Ellison?
    Mr. Ellison. You know what, I'm not a witness today. You 
are. Now, you're the witness.
    Mr. Mulvaney. I've been to your office. I can't see into 
it.
    Mr. Ellison. No, wait a minute. You are--
    Mr. Mulvaney. You believe in transparency, don't you? I 
know that you do.
    Mr. Ellison. No, you're the one--it's my--I'm reclaiming my 
time. You're the one who's offering yourself as some champion 
of transparency. This is your reason for being over there at 
the office that you shouldn't even hold right now. And the 
office that you hold, the public can't see it. Even your staff 
cannot see it. Who knows what you're even doing in that room 
right there. How many days a week are you at the CFPB?
    Mr. Mulvaney. Generally, we try to shoot for Tuesdays, 
Thursdays, Saturdays. The way it's worked out, Congressman, is 
that I'm there just about every day for a period of time, and 
across the street about every day for a period of time. It's 
not been nearly as cut and dry as I'd hoped that it would be.
    Mr. Ellison. Right. And let me ask you this as well. Are 
you, you may have meetings in your particular office with your 
staff?
    Mr. Mulvaney. I do. I do. I also have meetings in the 
conference room, which is to the left of that photo, which is 
not frosted.
    Mr. Ellison. Yes. So given the nature--given the decoration 
changes that you've made, I think it's pretty clear that you're 
not applying the same rules to yourself as you are to the 
agency that you hope to represent. I think that's too bad. And 
I'll yield back.
    Chairman Hensarling. Thank you, sir. The gentleman yields 
back. The Chair now recognizes the gentlelady from Utah, Ms. 
Love.
    Ms. Love. Thank you so much. It's great to see you, 
Director Mulvaney, and I appreciate your candid questions and 
answers to those questions. I really--it's refreshing to be 
quite frank. As you know, on this committee, we get a lot of 
information. We know at least a week in advance when somebody's 
going to be coming in and when we're going to be doing these 
hearings. And we get a book that talks about what's been 
happening in your reports. And I put the book aside and went to 
my district, and I spoke to some of the small banks in my 
district.
    I had a roundtable. Went around. Because I knew I was going 
to have this meeting with you. Instead of asking some of the 
questions that may be in here, I literally gave them the 
ability to ask you these questions. So one of the issues that 
they wanted me to talk to you about is the fact that they are 
willing and interested in making small-dollar loans. And I 
wanted to know, and they wanted to know, what your initiatives 
are in respect to small-dollar loans and payday lending and 
what the end result is that you're hoping to achieve.
    Mr. Mulvaney. Congresswoman, I have to get into more detail 
on small dollar across the board. The first thing that comes to 
mind is, we're revisiting the payday rule, which is often a 
small dollar rule. But I'd have to get you more specifics on 
what we're doing across the board on small-dollar, because 
that's more than just payday.
    Ms. Love. Right. So they--like I said, they were interested 
in making sure that they had the ability to do these small 
dollar loans.
    Mr. Mulvaney. Exactly. And I--
    Ms. Love. And I think the more options, obviously, the 
better.
    Mr. Mulvaney. It's a shame that Ms. Velazquez is not here, 
because when I was on the Small Business Committee, when I 
first got here, she and I were Chair and Ranking Member of one 
of the subcommittees on small business and actually did a field 
hearing on just that, micro lending to small business. So we 
know it's important. We know it's got bipartisan support. And 
to the extent we can help you folks make that more readily 
available, we'd look forward to doing that.
    Ms. Love. OK, great. The other question that they wanted to 
me ask you is this. How powerful are you?
    Mr. Mulvaney. Too powerful.
    Ms. Love. Too powerful. If someone had an issue--if a small 
bank, for instance--say the Bureau was going after a small bank 
for some issue.
    Mr. Mulvaney. Right.
    Ms. Love. Who do they go to for protection?
    Mr. Mulvaney. Nobody.
    Ms. Love. Who are you accountable to?
    Mr. Mulvaney. Nobody. I could make the decision to bring 
the lawsuit. I could make the decision not to bring the 
lawsuit. I could make the decision to--
    Ms. Love. If you go and send a handwritten note to ask the 
Federal Reserve for $700 million, are they required to give 
that to you?
    Mr. Mulvaney. Yes, on October 1st, they--
    Ms. Love. Do they--can they ask you questions about what 
that's needed for?
    Mr. Mulvaney. I don't think so. The statute doesn't say 
that they can.
    Ms. Love. Do you have a statute that explains exactly how 
you are to spend and if you are to spend that $700 million?
    Mr. Mulvaney. Oh, it just says ``in the operation of the 
Bureau.''
    Ms. Love. Here's the problem that we have. I think the 
American people and Members of Congress have false choices 
here. The problem that we have is, depending on who's in that 
seat, one side or the other is going to be frustrated, which 
means that the American public is going to be frustrated, which 
tells me that there's a problem with how this was set up. Can 
you imagine if we actually had a Bureau that worked well and 
worked well for people?
    Mr. Mulvaney. Look at it this way, Congresswoman. You don't 
get the same sense of frustration about the SEC (U.S. 
Securities and Exchange Commission) or the FDIC or the FSOC. 
You might have some complaints about it, but it doesn't rise to 
the same level as this. We are not the same as the other 
financial regulators. We need to have a more down-the-middle 
approach so that we are taken seriously as regulators and we're 
not perceived as being the brainchild of one particular 
ideologue. And that's one of my biggest frustrations with this 
as an institution is that we do not have the same credibility 
as those other regulators do, and I hope that we can work to 
get to that, so that we're no longer perceived as that, which 
is either you love us or you hate us. We just want to be good 
bureaucrats and implement the law. That's what I'm hoping to do 
with the Bureau.
    Ms. Love. And let me tell you who else wants you to be that 
way too, the people who go to these small banks. The people 
that have lost their ability to be able to get the resources 
that they need for their communities. And I know this because I 
was the mayor of one of those small cities that are in--that 
these banks are in, and that serve that community. And I have 
to say that these policies make this position more political 
than policy oriented. And I think that that's the problem that 
we have. Both sides of the aisle will continue to be frustrated 
and the American public will not be given the ability to be 
protected, actually get protected, if these statutes and these 
policies remain the same. So I'm hoping that we can at least do 
one thing, put this Bureau on appropriations. And I think that 
that will solve quite a few problems. I yield back.
    Chairman Hensarling. Time of the gentlelady has expired. 
The Chair now recognizes the gentleman from Texas, Mr. Green, 
Ranking Member of our Oversight and Investigations 
Subcommittee.
    Mr. Green. Thank you, Mr. Chairman. I thank the Ranking 
Member as well. I thank the witness for appearing. And to be 
quite candid with you, I have some degree of appreciation for 
your candor, because it makes it clear to me where you are. So 
let's you and I be candid with each other. I am a person who 
has seen the world from the bottom up. I know what invidious 
discrimination is like. I've had to sit in the back of the bus. 
I have consumed from the colored water fountain. I have had to 
go to back doors. So I'm very much interested in invidious 
discrimination and the elimination thereof. And as a result, I 
want to talk to you about testing. My assumption is that you're 
aware of the testing process. And if you're not, I'll give a 
brief explanation. Are you aware of the testing process?
    Mr. Mulvaney. I may know it by another name.
    Mr. Green. Well, testing is the means by which we can send 
persons into a facility. Three people. Two may be African 
Americans, or one African American, two Anglos. And see if 
they're treated similarly, see if they're treated the same. 
It's called testing. Banks in the main do not favor testing. As 
a matter of fact, the laws are written such that it is very 
difficult to accomplish testing.
    Testing is the means by which we can acquire the empirical 
evidence to prove that discrimination exists. So my question to 
you is, do you support testing in banks to determine whether or 
not there is discrimination?
    Mr. Mulvaney. Thank you, Congressman, for bringing it to my 
attention. I wasn't familiar with it, but I've just been 
informed that we've done it in the past. We continue to do it. 
And I have no reason to think we would change it.
    Mr. Green. You would support testing to make sure--
    Mr. Mulvaney. We do it as part, right now, of our--
    Mr. Green. I believe you do it now. I believe you do it 
now. But I'm asking you to just go on record saying you will 
support testing to acquire--
    Mr. Mulvaney. I see no reason to change the policy, 
Congressman. And by the way--and I don't want to cut you off, 
but there was--
    Mr. Green. I'll allow you to.
    Mr. Mulvaney. Someone asked a question before about the 
annual report. I wanted to point out that we specifically 
mentioned our role in preventing and rooting out 
discrimination, in the semi-annual report that we just sent to 
you. Someone had asked me if it was in there, and I didn't get 
a chance to respond to that. So we do take that seriously, and 
seriously enough to put in our semi-annual report.
    Mr. Green. Well, here's what I will do. Many times when I 
have persons who equivocate I have to resort to this. Am I 
correct--
    Mr. Mulvaney. Did I just equivocate?
    Mr. Green. You did.
    Mr. Mulvaney. OK.
    Mr. Green. Am I correct in assuming that your testimony is 
as follows, that you will continue to test banks to determine 
whether or not invidious discrimination exists?
    Mr. Mulvaney. And I'm telling you yes, I have no reason to 
change the--
    Mr. Green. That is sufficient for me. No, I appreciate your 
answer of yes. That means something to me. And I appreciate 
your being candid. Now--
    Mr. Mulvaney. Let me ask you this, Congressman.
    Mr. Green. Sure.
    Mr. Mulvaney. Is it an effective tool? Because I'm not that 
familiar with it.
    Mr. Green. Is it an effective tool?
    Mr. Mulvaney. Yes, sir.
    Mr. Green. Absolutely, it is. It's used in housing. It is 
the most efficacious methodology available to us. There is 
nothing that I know of that's better. And I would challenge 
anyone who would just dare to engage in a colloquy with me 
right now to, let's talk about something that's better than 
testing. Other than a person confessing. And that rarely 
happens. So yes, it's very, very much effective.
    And by the way, notwithstanding its effectiveness, this 
committee has fought allowing it to continue and be expanded 
into certain areas. The committee has. No disrespect to anybody 
on the committee. But that is the case.
    Because I remember trying to get some legislation to move 
forward that included testing, and there were all kinds of 
contingents about how it would not work and why it would not 
work. But I'm bringing it to your attention because the 
gentleman that is with you--and I appreciate you referring to 
persons who are with you for assistance, I would do the same 
thing--Mr. Carson unfortunately would not--the testing is 
something that makes a difference for people who have been 
denied access to capital.
    And it is access to capital that makes a difference in the 
lives of people. And believe it or not, and I believe you do--
discrimination exists in banking. Do you agree?
    Mr. Mulvaney. I believe there are bad actors. I do, sir.
    Mr. Green. OK. Thank you, Mr. Chairman.
    Chairman Hensarling. The time on the gentleman has expired. 
The Chair now recognizes the gentlelady from Missouri, Mrs. 
Wagner, Chairman of the Oversight and Investigations 
Subcommittee.
    Mrs. Wagner. Thank you, Mr. Chairman. And welcome back, 
Acting Director Mulvaney. I have long been interested in 
understanding the decisionmaking surrounding the Bureau's 
headquarters renovation. Under your predecessor, I didn't, 
let's say, get meaningful answers to simple questions on the 
topic. And unfortunately the committee is still in the process 
of investigating whether its oversight on this topic was indeed 
obstructed. My understanding is that the Bureau's current 
calculation is that it will spend all $242.8 million renovating 
the building to a Class A luxury office space. Now, a building 
that it doesn't even own, it rents, I believe, Acting Director.
    Mr. Mulvaney. That's correct.
    Mrs. Wagner. I understand that some improvements to the 
building may have been needed, but can you explain to me, 
briefly, because I have several other questions, why it was 
necessary to spend a quarter of a billion dollars on luxury 
offices for the CFPB?
    Mr. Mulvaney. It's a real short answer, because I don't 
know.
    Mrs. Wagner. Stunning. Let me unpack this just a little 
bit. Acting Director, as you know, Members of the committee 
have long sought to understand who made the initial decision to 
renovate the headquarters building. And the committee 
repeatedly requested, and I did also, requested records 
relating to this issue. But then Director Cordray repeatedly, 
and I quote indicated that he, ``did not know the identity of 
the individual who made the initial renovation decision.'' Is 
that correct?
    Mr. Mulvaney. I'm sorry, could you repeat the question? 
Someone was--
    Mrs. Wagner. We've sought for some time to understand who 
made the initial decisions to renovate. And then it was 
Director Cordray at the time who repeatedly said that he didn't 
know the identity of the individual who made the initial 
decision; is that right?
    Mr. Mulvaney. I do believe that's--I was in this committee, 
and I think I asked similar questions of Mr. Cordray and got 
similar answers.
    Mrs. Wagner. So that's right. Now it's my understanding 
that we know from the Inspector General that the decision to 
renovate was made after January 21, 2011. And we know the 
decision was publicly announced on February 18, 2011. So it 
stands to reason that the initial decision to renovate was made 
during that 28-day timeframe, is that correct?
    Mr. Mulvaney. Again, that's an assumption you can draw from 
IG's report, yes, ma'am.
    Mrs. Wagner. Now, in response to a recent letter about the 
building, you undertook a supplemental records search, and I 
thank you for that, and have sent us a supplemental records 
production, under a detailed cover letter, which I now ask, Mr. 
Chairman, be placed in the record, with appropriate redactions 
to protect personal information.
    Chairman Hensarling. Without objection.
    Mrs. Wagner. Now, this production contains records that I 
am shocked were not previously produced. It contains a January 
24, 2011 Decision Memorandum and Information Memorandum that 
appears to have been placed in Elizabeth Warren's briefing book 
for a staffing meeting. Now, I remind you that she served as 
assistant to the President and Special Advisor to the Secretary 
of the Treasury on the Bureau at the time. They recommend in 
this briefing book that she approve entering into contracts for 
design work to prepare for renovations to the headquarters 
building. The production also contains staff communications and 
calendars that circumstantially indicate that Ms. Warren 
approved this recommendation. Do I have that right, Acting 
Director Mulvaney?
    Mr. Mulvaney. I think that's certainly a conclusion you can 
draw from those materials, yes, ma'am.
    Mrs. Wagner. Were the Memorandums to Ms. Warren located in 
some hard to search location?
    Mr. Mulvaney. It was not.
    Mrs. Wagner. Were these Memorandums ever subsequently 
circulated within the Bureau?
    Mr. Mulvaney. That I don't know. All I know is that we 
found them. We thought that they were responsive to the 
previous request. And we've disclosed them.
    Mrs. Wagner. Where were they?
    Mr. Mulvaney. They were in the director's file.
    Mrs. Wagner. The director's--
    Mr. Mulvaney. The office of the director's file, I think.
    Mrs. Wagner. Office of the director's file.
    Mr. Mulvaney. Yes. You want to ask me if that would have 
been--
    Mrs. Wagner. So this committee--
    Mr. Mulvaney. --if that would have been the first place I 
would have looked for stuff? Yes.
    Mrs. Wagner. This committee asked repeatedly. We have 
oversight and investigation responsibilities. $242 million, a 
quarter of a billion dollars spent on luxury renovations on a 
building we don't even own, the Bureau rents. We asked 
repeatedly for 6 solid years, and we find out that they're in 
the Director's office file. Mr. Chairman, I have further 
questions about these records that were not previously produced 
or referenced, and about the issue revealed by these records. I 
trust that the Bureau will cooperate with any future committee 
oversight on this topic, sir?
    Mr. Mulvaney. Absolutely.
    Mrs. Wagner. I thank you. Mr. Chairman, my time has 
expired. I yield back.
    Chairman Hensarling. The time of the gentlelady has 
expired, and the Chair now recognizes the gentleman from 
Maryland, Mr. Delaney.
    Mr. Delaney. Thank you, Mr. Chairman. Mr. Mulvaney, it is 
nice to see you back here.
    You have probably gotten a lot of detailed questions about 
what is going on at the CFPB, so I wanted to more focus on how 
you think about it because we are often confronted with a lot 
of false choices here in Congress, as you well know, having 
served here. We either have to completely repeal Dodd-Frank and 
every aspect of it, or we have to defend every single word of 
it.
    Same thing with the Consumer Finance Protection Bureau. It 
either has to be repealed or eliminated, as you have advocated 
for in the past, or every single word of the statute that 
creates it is perfect.
    So have you thought about approaching this in a way where 
you actually come out very strongly supporting the Consumer 
Financial Protection Bureau, saying you believe in its mission 
and it is an important institution, and you hope it endures 
across the long term; however, to over-compensate for some of 
the comments you have made in the past that obviously make 
people suspicious about your intentions with respect to this 
agency, but at the same time you put forth a list of very 
constructive improvements you would like to make? Have you 
thought about approaching this that way?
    Because maybe I have missed it, but I have not heard you 
come out strongly in support of both the mission and the 
importance of the institution across the long term, and that 
you will not do anything to undermine its existence or its 
ability to function, both in the short term and long term; 
however, you do see some reforms that need to be made?
    Mr. Mulvaney. Yes. I hope that is what you would take away 
from the recommendations, which is the recommendations are not 
that we repeal Dodd-Frank. y'all want to do that, that is your 
prerogative. Right? I am a bureaucrat. I am a member of the 
Executive branch. I am working at the Bureau. The Bureau shall 
exist. I cannot change that. So if it is going to exist, this 
is what could be done to improve it. And that is what I have 
tried to do.
    As to sending the larger message about whether or not I--
how I feel about it, I have always been a strong believer, 
especially in what we do for a living, or what I used to do for 
a living when I sat out there, which is look at what folks do 
more than what they say. I have not blown the place up.
    Mr. Delaney. But sometimes what you say matters because--
    Mr. Mulvaney. It does.
    Mr. Delaney. --the tone at the top is actually really 
important in any organization.
    Mr. Mulvaney. I absolutely agree.
    Mr. Delaney. And other than in your prior life here sitting 
among 435, that is one thing. But now you are in a leadership 
position in the White House.
    Mr. Mulvaney. Right.
    Mr. Delaney. You are obviously getting an expanded 
portfolio. And what is so--if you were to say here, for 
example, and I would like to hear you say this if you agree 
with it, that you support the mission of the Consumer Financial 
Protection Bureau, and you would like to see it endure and 
exist across the long term.
    Mr. Mulvaney. I support consumer financial protection. And 
let me tell you what I have told the people--
    Mr. Delaney. But that is--
    Mr. Mulvaney. Let me tell you what I have told the people 
who work there, and you can draw your own conclusions, which is 
that I said, ``Look. This is a brand-new agency. OK? And right 
now this agency is associated with one person. And you cannot 
be taken seriously as a regulator if you are the brainchild or 
baby of one particular person on one side of the aisle. And if 
you want to be taken seriously as a regulator, you have to be 
able to be more than that.''
    This is the very first transition that the Bureau has ever 
gone through. OK? From one party to another. And they have to 
learn how to do that if they are going to be taken seriously. 
Rather than--
    Mr. Delaney. But can you--reclaiming my time.
    Mr. Mulvaney. Yes, sir. Yes.
    Mr. Delaney. Rather than supporting consumer finance 
protections generally, which is what I heard you say just then, 
do you support the existence of the Consumer Financial 
Protection Bureau as an enduring part of our Government looking 
out for the best interests of consumers, being funded by the 
Federal Reserve, but with some reforms to make it more 
accountable, more transparent and maybe--
    Mr. Mulvaney. I absolutely think there are better ways to 
protect consumers than we are doing today. I recognize the fact 
that there is and can be a role for the Federal Government in 
protecting consumers. This is especially true when you are 
dealing with Federal financial institutions. It would seem to 
fall to the Federal Government to oversee them.
    Mr. Delaney. So I am interpreting your answer, 
respectfully, to say that you cannot say you support the 
existence of this Bureau across the long term. But you support 
the concept of consumer financial protection.
    Mr. Mulvaney. I think that is what I--
    Mr. Delaney. Very quickly, one of the concepts I have put 
forth is the notion of a nonprofit bank to serve distressed 
communities. Banks are not allowed to be nonprofit right now.
    Mr. Mulvaney. Yes. I am not--
    Mr. Delaney. And it seems to me that if you could allow a 
nonprofit bank so that it could raise philanthropic dollars to 
support its mission, it could actually be a positive force in 
some of these communities.
    While that is not specifically under your purview, do you 
support a concept like that?
    Mr. Mulvaney. Would the not-for-profit be a Government 
institution or a--
    Mr. Delaney. No. It would be a nonprofit like anything 
else.
    Mr. Mulvaney. What you do with your money is your business.
    Mr. Delaney. So you would support regulatory changes to 
allow nonprofit banks?
    Mr. Mulvaney. I would be happy to take a look at it. But 
again, what I am faced with is--
    Mr. Delaney. This is an enterprise that could actually be 
the kind of thing we need to help consumers in some of these 
markets because it would have a double bottom line, self-
sustainability but also a mission.
    Mr. Mulvaney. If you want to--if you want to lend money to 
people and take a lower-than-market rate of interest, that is 
your business.
    Mr. Delaney. Thank you.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Arkansas, Mr. 
Hill.
    Mr. Hill. I thank the Chairman. I appreciate the hearing. 
It is good to have Director Mulvaney before us today, and I 
appreciate his public service. It is a 7-day-a-week job just to 
be one of your jobs, so we appreciate the sacrifice from your 
family, stepping away from the house.
    Mr. Mulvaney. It keeps me off the street. The triplets are 
teenagers now; they do not care to see me, anyway.
    Mr. Hill. A fair point. I will not go there.
    But I do want to visit about TILA-RESPA (Truth in Lending 
Act-Real Estate Settlement Procedures Act). This is something 
you know I have had a keen interest in since I came to Congress 
after 3 decades in the industry. And Mrs. Warren, when she was 
making the rounds before the formation of the agency you are 
the acting director of, she said, ``Well, one of the key things 
we are going to do is make forms simpler for consumers and 
simpler for banks.'' That was a goal of the agency, at that 
time unnamed, I guess, the Consumer Bureau.
    Mr. Mulvaney. How did we do on that?
    Mr. Hill. Well, the exhibit A for that was a merger of the 
truth-in-lending statement and the real estate settlement 
statement. We are going to make it one form. It is going to be 
simpler. Consumers are going to be benefited by faster closing, 
lower costs. It is going to be easier for community 
institutions to loan them mortgage money. And I would argue, 8 
years later, that that is not the case, Director Mulvaney, and 
it has been made worse by the rulemakings by your Bureau.
    This merger is called TRID (TILA-RESPA Integrated 
Disclosure). It cost the agency $1.5 billion in trying to get 
computer programs to work. It still does not work. I still have 
complaints about it, extending mortgage closing, raising the 
cost of mortgages. And one thing I have heard time and time 
again, and Director Cordray and I have had candid conversations 
about this, why can't the agency issue legally binding guidance 
to mortgage originators that they can interpret this rule, and 
title companies, safely and be held safe from prosecution or 
from action of the Bureau's investigation? That passed the 
House overwhelmingly.
    And I asked Director Cordray, who was generally supportive 
of that, ``Why don't you do no-action letters, like we have at 
the IRS or at the sector, where a lawyer can write you and say, 
if we do X and Y about a closing related to the TILA-RESPA 
form, that they have certainty, legal certainty.''
    Do you support the concept of no-action letters as 
guidance?
    Mr. Mulvaney. I will say this. We have--I certainly believe 
that is within our authority to do exactly that. Toward that 
end, we have made what is called a request for information on 
TILA-RESPA, on TRID, to try and get the type of input that you 
have just suggested because I do believe that is within our 
authority to do, and that it can bring clarity to the law and 
to the regulations in a way that would be beneficial to both 
financial services providers and consumers.
    Mr. Hill. We want to lower these costs. We do want it 
simpler, and it is not.
    Mr. Mulvaney. I used to--
    Mr. Hill. And we want it less costly, and what the Bureau 
has done for all these years is offer webinars that are 
confusing, hard to find, not informative, and unhelpful to 
market participants. So I hope you will consider this as an 
official comment.
    Mr. Mulvaney. Just by pure coincidence, we are also 
reviewing our webinar process as well.
    Mr. Hill. Good luck with that if you can find it on your 
website.
    Let me change subjects to data breaches. I noted in some of 
the material in this hearing that the Bureau has 233 confirmed 
breaches of consumers' personally identifiable information 
(PII) within the Bureau, and that in the consumer response, 
another 840 suspected PII breaches by financial institutions 
using your portal, and that you have investigated that.
    Do you support a data security breach notification? If Mr. 
Luetkemeyer's bill is made law, do you support a breach 
notification standard?
    Mr. Mulvaney. I think it is a good practice.
    Mr. Hill. And what have you done specifically to protect 
our consumers' information?
    Mr. Mulvaney. A couple different things. This has gotten a 
little bit of attention, and I think it was--a lot of it was 
inaccurate. We immediately stopped data collection once I took 
over, once I was assigned to the office, for the purpose of 
analyzing our data security.
    We have made certain accommodations within the enforcement 
areas to allow data collection to continue. For example, we 
will use other agencies' systems and so forth. We will collect 
data onsite but not offsite. I am--the rule is this: I am not 
going to hold somebody to a higher standard than we are willing 
to hold ourselves, and I am not satisfied with our data 
security right now at the Bureau.
    Mr. Hill. Well, I appreciate that. It is an important area. 
I want to be on record supportive of your four ideas for 
improvement in the agency: Putting it on appropriations, and 
having an IG. And I would also encourage you, on behalf of the 
people you oversee, to have an ombudsman so that someone you 
regulate can have someone to call besides your office and have 
guidance on whether they have done right or wrong.
    Thank you. I yield back.
    Mr. Mulvaney. Thank you, sir.
    Chairman Hensarling. At this point the gentleman has 
expired.
    For what purpose does the Ranking Member seek recognition?
    Ms. Waters. Mr. Chairman, pursuant to Clause (d)(4) of 
Committee Rule 3, I request that the gentlelady from Ohio be 
recognized to question the witness for an additional 5 minutes 
upon the conclusion of the time allotted under the 5-minute 
rule.
    Chairman Hensarling. Pursuant to Clause (d)(4) of Committee 
Rule 3, the Chair recognizes the gentlelady from Ohio for a 
total of 10 minutes.
    Mrs. Beatty. Thank you, Mr. Chairman and Ranking Member. 
And to our witness today, Mr. Mulvaney, thank you for being 
here today.
    Today is a meeting that is heavy on my heart. April should 
be an exciting time for me as we celebrate the 50th anniversary 
of the Fair Jobs Act, led by then-Martin Luther King. And 
people embraced, and President Johnson signed it because of 
much of the unrest and discriminatory practices and consumers 
being mistreated. So I echo the comments of my colleagues 
before me. But you are here, so I am going to ask you the 
questions.
    It has clearly been established that you have two full-time 
jobs. In my world, to have two full-time jobs, one that you 
found was a joke and the other one you wished it did not exist, 
and to get paid for doing a full-time job that it is impossible 
to do two full-time jobs in the world that we live in and for 
the type of work that is expected, not only by our consumers 
but by your colleagues on both sides, I think that is the 
reason why we cannot work being two full-time jobs, being paid 
at those salaries.
    But with that said, you have brought some people with you 
today. Are these part of your top staff team--
    Mr. Mulvaney. Yes, ma'am.
    Mrs. Beatty. --that is here? Do you have any African 
Americans in top positions?
    Mr. Mulvaney. No, ma'am.
    Mrs. Beatty. That is a problem, and that is a problem for 
me. Do you know what section 342 is of the Dodd-Frank Act?
    Mr. Mulvaney. No, ma'am. I do not know it by heart.
    Mrs. Beatty. That is even great--you are going to sit here 
and tell me that you came before this committee, and you sat 
here on this committee, and you know that for the 6 years I 
have been here, the question that I have asked of every single 
person coming here--I have asked them about OMWI and section 
342. You are the only one to say that you had no knowledge of 
what it is, and you were a former Member of Congress. I find 
that appalling, insulting, and unacceptable.
    Now, tell me what you are going to do about not 
understanding what 342 is?
    Mr. Mulvaney. I know what the OMWI is, ma'am. It is just I 
did not recognize it as section 342. We do have an Office of 
Minority and Women Inclusion.
    Mrs. Beatty. So if you know what OMWI is, explain to me--
you just told us that you have 300--or your staff informed you 
since you wanted to bring it to our attention--that there were 
370 high-paid people. How many women are in those high-paid 
positions? How many African Americans and Hispanics are in 
those high-paid positions?
    Mr. Mulvaney. I have that breakdown for you, ma'am, if you 
want to give me a chance to get it to you. I have the breakdown 
by race. I have the breakdown by gender in terms of who makes 
what at the agency--at the Bureau.
    Mrs. Beatty. Well, I would definitely like it.
    Mr. Mulvaney. By the way, and to your opening point, you 
know that I only get paid one paycheck. Right?
    Mrs. Beatty. I do.
    Mr. Mulvaney. You seemed to imply that I was taking two, 
and I am not. I have only--I only get paid my OMB salary. I do 
not get paid an additional salary.
    Mrs. Beatty. And I fully understand that. I guess the 
question is, I do not know how you get paid for a full-time job 
when you have two full-time jobs. I find it hard to believe 
that for the two types of jobs that you have, that you would be 
able to do due diligence in full-time on either one of them.
    So you get paid a full-time salary for doing 50 percent, if 
that, on each of the jobs. And I am just saying, consumers 
would love to have a job where they could only work half-time 
and be paid full-time.
    Mr. Mulvaney. Actually, I would suggest to you that I work 
more than 100 percent of the time. But that is fine.
    Mrs. Beatty. Well, let me just also move on and say--
    Mr. Mulvaney. In theory, I would only have to--
    Mrs. Beatty. --and say earlier, as my colleagues wanted 
to--we get into this comparison thing. We come here, and 
whether it is Rich Cordray as the former, or whether it is 
spending time, if it is President Obama, and as my colleague's 
open--and one of my colleagues in their opening remarks started 
talking about the former director, Director Cordray from my 
home town running the clock out, well, I think it is good to 
run the clock out when you have substantive things to say, and 
you have facts and answers.
    So maybe when you do not run the clock out, it is because 
you do not have a lot to say or you do not have a lot of 
knowledge to say about it. So I guess I would like to ask you, 
what is the number one thing that you are going to do to change 
to help consumers? You have not filed cases. We know what we 
have heard in the past, being able to put billions of dollars 
and returning to some 12 million consumers.
    So what is it, very quickly, that you are going to be able 
to do that I can go back home and say to my constituents who 
are confronted with the high loans of payday lenders, that I 
can go back and say to my minority communities that somebody is 
fighting for you? How do I tell them that when you do not have 
people who look like me in high positions, you do not readily 
know what those numbers are for women?
    We know right now that women in general and women of color 
make lesser on the dollar than our white male counterparts. You 
know that we have a Ranking Member who has worked tirelessly in 
her entire career fighting for the underdog and the consumers. 
And you come here absent of that and absent of readily having 
answers?
    Mr. Mulvaney. No, ma'am. Not at all. In fact, I think I 
got--I think I have tried to answer every one of your 
questions, and you have raised a couple different things.
    The senior career staff does include African Americans and 
women. We will continue to do what the Bureau has done in the 
past, which is to enforce the 18--18 consumer financial 
protection acts that we are charged with by the statute. That 
is not changing. The fact that we might not try to push the 
envelope the same as the previous Administration did--
    Mrs. Beatty. I am not comparing it to the previous. I am 
only asking you what you are going to do.
    Mr. Mulvaney. That is what we are going to do. I have sat 
here all day--
    Mrs. Beatty. I asked the same question to Director Cordray.
    Mr. Mulvaney. I have sat here all day and said I am going 
to enforce the law. I am going to follow the statute. I am not 
going to shirk those obligations. I am going to try to be a 
good bureaucrat and try to encourage the folks who work at the 
Bureau to do the exact same thing.
    For that reason, we still have 100 investigations of 
potential violations of those 18 laws ongoing. We have a dozen 
or so that might turn into lawsuits that might get settled. We 
have 25 that are actively being litigated. That is still 
ongoing at the Bureau. So you asked me what I am going to do, 
is I am going to enforce the law because that is what I get 
paid to do.
    Mrs. Beatty. OK. Mr. Chairman, I would like to yield back 
the balance of my time to the Ranking Member.
    Ms. Waters. Thank you very much.
    I would like to--last year, former Director Cordray of the 
Consumer Bureau ordered Fay Servicing to pay harmed consumers 
up to $1.15 million for its illegal mortgage servicing 
practices. In addition to other remedial actions, the Bureau 
found that Fay kept borrowers in the dark about crucial 
information. They needed to receive foreclosure relief and stay 
in their homes.
    Mr. Mulvaney, I have constituents who were harmed by Fay 
Servicing's failure to provide them with the protections 
against foreclosure that they were entitled to by law. Can you 
give us an update on the status of how many affected consumers 
have received remedial compensation to address this wrongdoing? 
Can you provide copies of both the compliance and redress plans 
required by the consent order and what more is being done to 
make sure Fay has corrected its practices?
    Mr. Mulvaney. I can provide you with that all that 
information. I cannot do it as I sit here, Ms. Waters. I will 
say that that was a matter I think was concluded before I got 
there, so that is why it is not readily available to me.
    Ms. Waters. OK. I would like to have that information as 
soon as possible.
    Mr. Mulvaney. I would be happy to do that.
    Ms. Waters. Let me go on further. I am concerned about 
payday lenders. And you have said that payday lenders have no 
influence over you. As you are aware, Janet Matricciani, I 
believe is her name--
    Mr. Mulvaney. I do not know how to pronounce it, either.
    Ms. Waters. --is a former chief executive at World 
Acceptance Corporation. She is one of your contributors. I know 
you know her. She is one of the Nation's biggest payday 
lenders. Under Director Cordray, the Consumer Bureau started an 
investigation into World Acceptance Corporation for its abusive 
practices.
    After you showed up at the Consumer Bureau, that 
investigation was dropped. Just 5 days after the information 
was dropped and 2 days before she stepped down as CEO of her 
payday lending company, she reached out to you at your personal 
email address about her interest in becoming the head of the 
Consumer Financial Protection Bureau.
    So what is all of this?
    Mr. Mulvaney. Well, actually, I do not think it is entirely 
accurate, is what it is.
    Ms. Waters. What is not accurate? Which part?
    Mr. Mulvaney. The part about I dropped the investigation.
    Ms. Waters. Did you have anything to do with the 
investigation?
    Mr. Mulvaney. No, ma'am.
    Ms. Waters. Did you at all weigh in on it?
    Mr. Mulvaney. No, ma'am.
    Ms. Waters. Did you know about it?
    Mr. Mulvaney. No, ma'am. Oh, no, that is not true, because 
I--they had been going on for, I think, several years.
    Ms. Waters. OK. Let's go back. So you did know about it. It 
was brought to your attention. Did you say anything? Did you do 
anything? Did you take any action at all?
    Mr. Mulvaney. No, ma'am. Zero. None.
    Ms. Waters. No involvement whatsoever?
    Mr. Mulvaney. No, ma'am.
    Ms. Waters. Has it been dropped?
    Mr. Mulvaney. Yes.
    Ms. Waters. Who did it?
    Mr. Mulvaney. Career staff recommended that it be dropped 
about the time that I took over--
    Ms. Waters. Recommended to whom?
    Mr. Mulvaney. That actually does not get reported up to the 
director's office; they make that determination themselves.
    Ms. Waters. So they did it without your knowing anything 
about it?
    Mr. Mulvaney. Yes, sir--ma'am.
    Ms. Waters. Are you sure you want to answer that way?
    Mr. Mulvaney. Yes, because it is the truth.
    Ms. Waters. Well, that creates some real suspicions that 
you would have this corporation--
    Mr. Mulvaney. Only on your--only on your part, ma'am.
    Ms. Waters. Well, it would with you because if the fact 
that you do not like the Consumer Financial Protection Bureau 
that you--
    Mr. Mulvaney. I could look you in the eye, and would look 
you in the eye--
    Ms. Waters. On my time.
    Mr. Mulvaney. I had nothing to do with that action.
    Ms. Waters. On my time. I am reclaiming it. It does raise a 
lot of questions because of the fact that you have stated more 
than once that you do not like it. You do not want it to exist. 
And we are going to delve further into what happened with this 
decision that you claim you have no knowledge of that was made 
by you. We will find out more about this. I yield back.
    Mr. Mulvaney. And you will only find out that I told you 
the exact truth.
    Chairman Hensarling. The gentlewoman's time is expired. The 
gentlewoman's time is expired.
    The gentleman from Minnesota is recognized for 5 minutes.
    Mr. Emmer. Thank you, Mr. Chair, and thank you, Director 
Mulvaney, for being here. It is good to see you. I will get 
right to it since you have been here for a long time already 
and we hope to have this wrapped up soon.
    In 1975, Congress enacted the Home Mortgage Disclosure Act. 
This important law exposed and helped eliminate discriminatory 
lending practices, particularly against minorities. In short, 
HMDA, as it is commonly referred to, helped more Americans 
realize their dream of owning a home.
    Over the years, the disclosures required by Regulation C 
have expanded away from the original intent and have actually 
become an obstacle, preventing small, medium, and local lenders 
from helping aspiring homeowners.
    In 2015, your predecessor at the CFPB demanded from lenders 
more than double the amount of data originally required by 
HMDA. The change to Regulation C was supposed to take effect 
last January, but before it did, in December 2017, you provided 
relief for financial institutions trying to comply with the 
proposed changes, essentially delaying compliance until 2019.
    Now, could you agree with me that this actually helps 
smaller lenders in the marketplace?
    Mr. Mulvaney. It does. We determined, Congressman, from 
talking to folks that they were having a great deal of 
difficulty implementing the rules. We provided the additional 
time.
    Mr. Emmer. And you were opening--you announced you were 
going to reopen the rulemaking process?
    Mr. Mulvaney. On a couple different points, including, as 
you mentioned, the fact that the previous director had almost 
doubled, in fact more than doubled, the data sets beyond what 
was required by the statute; and then also going to take a look 
at the size and the complexity of the financial institutions 
that are covered by the rule.
    Mr. Emmer. Right. Director Mulvaney, do you agree that the 
focus of the disclosures in Regulation C of HMDA should focus 
on the original intent of the law?
    Mr. Mulvaney. I do.
    Mr. Emmer. To expose and help eliminate discriminatory 
lending practices?
    Mr. Mulvaney. Absolutely.
    Mr. Emmer. Do you agree also that it is important for 
consumers that smaller, local community banks, community 
lenders, credit unions, that they are important to ensure 
consumers have full and fair access to home mortgages and other 
covered loans?
    Mr. Mulvaney. I do.
    Mr. Emmer. And are you aware that many small banks in my 
State of Minnesota and other smaller lenders were reconsidering 
their ability to actually even offer home mortgages and other 
covered loans because of the additional compliance costs 
created by this rule?
    Mr. Mulvaney. And that is what is so frustrating is it is 
so oftentimes what we do is I do not think we give enough 
consideration to what the intended or unintended consequences 
are, which is that people are not going to have access to the 
credit and the capital they need, which is extraordinarily 
important, especially to folks who are on the lower end of the 
economic spectrum because it is the way you get up on the 
economic spectrum. So we have had several examples of that here 
today, especially where it comes to HMDA.
    Mr. Emmer. The rule proposed by your predecessor would have 
cost lenders an additional $326 million in compliance costs. Do 
you know if your predecessor received any qualitative or 
quantitative cost-benefit analysis on this topic?
    Mr. Mulvaney. I am sure there is a cost-benefit analysis on 
file. I have no idea as to how efficacious or sufficient it 
was.
    Mr. Emmer. Now, this additional cost--again, I asked you 
earlier if the relief you provided did not help more 
proportionately the smaller lenders. That is because the 
additional cost, larger lenders can absorb those additional 
compliance costs.
    It is these small family owned community banks, member-
driven credit unions, they are the ones on Main Street in my 
State, Minnesota, and I suspect all across the country, that 
get hit the hardest with these additional costs. And just 
rephrasing, I think what you just said, so I understand it in 
my simple Minnesota way, the additional costs, you can protect 
the consumer. But what are you protecting them from if they do 
not have any option to get a loan for a new house, a new car? 
Shouldn't that be part of the concern?
    Mr. Mulvaney. It is. In fact, that is hard-wired into the 
statute that we are supposed to do that.
    Mr. Emmer. Right. Representative Hill discussed the data 
issues that have come up. You had testified to Senator Warren 
back in January of the 233 confirmed breaches and the 840 
suspected breaches of the CFPB portal. Doesn't this cause you a 
concern, with this double the data rule, going to your 
testimony today that you are not comfortable with the data 
security at the agency?
    Mr. Mulvaney. The more we take in, the more we can lose. 
And that is why I am very much concerned about both the scope 
of the rule and about our cyber-security.
    Mr. Emmer. So with all the additional costs, the potential 
loss in the marketplace of opportunity for consumers, the data 
problems, why not just get rid of the rule? Why reopen the 
process?
    Mr. Mulvaney. Well, because that is the law, and you need 
to go back to your folks back home and encourage them to 
participate in that process because we will go through notice 
and comment. We will do it the right way. And I need to hear 
from those folks. I need to hear folks all across the spectrum, 
from consumer advocates, consumers themselves, financial 
institutions. They need to participate in that process because 
that is the way the system is supposed to work.
    Mr. Emmer. Thank you.
    Mr. Trott [presiding]. The gentleman's time has expired. I 
now recognize myself for 5 minutes.
    Director Mulvaney, thank you for being here. It is actually 
productive to have someone here who listens to our questions 
and tries to answer them. And you have been criticized for 
having two full-time jobs. I, for one, thank you for your work 
and your service. And someone as bright and with your work 
ethic, I wish you had two other full-time jobs in addition to 
that.
    But with respect to your office, I have to say that for 
$250 million, I am not all that impressed with your office. And 
I am curious: How long is the lease on that building?
    Mr. Mulvaney. Oh, I forget. I have five different leases we 
track, Congressman. I am sorry. I cannot remember off the top 
of my head how long the lease is. The lease is with--is it the 
OCC or OTS? It is 20 years with two 5-year options, and it is 
with the OCC. The Office of Comptroller of the Currency owns my 
building.
    Mr. Trott. Thank you. Before we dive into the CFPB, I would 
be remiss if I did not take this opportunity just to put a plug 
in for the Great Lakes Restoration Initiative Fund. From 
Michigan, the Great Lakes are important to the Midwest and to 
our country. The Great Lakes have over 20 percent of the 
world's fresh water supply, and the funding is critical. And in 
the grand scheme of things, I do not think it is even as much 
as the CFPB's budget, so--
    Mr. Mulvaney. Point well taken. I will mention that to the 
OMB director next time I see him.
    Mr. Trott. Thank you. I want to clarify one point. You have 
been beat up a little bit today by the Ranking Member and Mr. 
Sherman and Mr. Ellison for your initial comments where you 
suggested that the statute just requires that you appear and 
not testify.
    And I think maybe your subtlety has been lost because you 
were not here saying that in asking for a gold star for being 
willing to testify, and get kudos for that. I would like to 
make this point and make sure you agree with this. You are here 
saying that you want to be accountable. You want to be on 
appropriations. And you do not believe the statute, the way it 
is written today, makes a lot of sense in terms of our job as 
Members of Congress. Is that a fair summary of your position?
    Mr. Mulvaney. Look at it this way. Let's say that the next 
director comes in and takes the position, you know what? So 
many folks have talked about how independent this agency has 
been. In fact, its very founding was supposed to be 
independent. It was supposed to be explicitly removed from 
oversight by Congress. We were not supposed to be micromanaged 
by Congress.
    There is a lot of language out there--it is from Elizabeth 
Warren, Senator Warren, amongst other people--who go exactly to 
that point. If you take that and combine that with the actual 
language of the statute, I think you could make a very 
compelling case that I do not have to answer your questions and 
neither does that person. I think that is wrong.
    Mr. Trott. Do you think the President should be able to 
fire you without cause?
    Mr. Mulvaney. I do.
    Mr. Trott. OK. So I really enjoyed your January 23rd 
article in the journal, and I underlined three sections of it. 
In one, you said, ``The Bureau's previous governing philosophy 
was to push the envelope aggressively under the assumption that 
we were the good guys and the financial service industries were 
the bad guys.'' And I could not have said it better myself.
    Under the prior tenure of Director Cordray, his attitude 
was, business is bad, particularly banks. And if you are in the 
banking business and you are profitable, then you must be 
taking advantage of consumers. And my concern is there are 
numerous articles out there, there was a great 1-1/2 years ago 
in ``The Atlantic'' magazine, about the culture of the CFPB and 
the politically motivated culture there and this mind set. And 
you have said great things about the bureaucrats there and how 
talented and dedicated they are this morning, and I appreciate 
those comments. But can you comment on the culture? Are you 
able to change that culture so that this mantra of business is 
bad is not the prevailing thought of the bureaucrats?
    Mr. Mulvaney. I think if he were still here, Mr. Delaney 
and I would agree on more than he probably recognizes, which I 
do agree that the personality of an organization often takes on 
the personality of the person, the man or woman in charge. And 
to an extent that Mr. Cordray had that attitude about business 
and about banking and about the role of the CFPB, the Bureau, I 
think that pervaded the operation of the Bureau.
    I have an entirely different attitude toward what financial 
services are and what they can do to help people. So we are 
going to look at this with a healthy balance of the folks who 
make loans and the folks who take loans and try and do our best 
to protect consumers without removing choices from consumers.
    Mr. Trott. In the editorial you also talk about the CID 
process, and you say where do the people charged go to get 
their time, their money, their good names back? If a company 
closes its doors under the weight of a multiyear CID at the 
CFPB, what about the workers that are laid off as a result?
    In my prior life, I can tell you I know of a thousand 
people that lost their jobs because of the CID process. It 
really--when the Federal Government comes in, there are not 
many good things that happen, even for good actors. And my 
question is, have you changed the CID process or have you 
looked at it such that if it is a bad actor--if it is a bad 
actor, who cares what happens to him? If it is a good actor and 
there is no finding and the file is closed, the company 
shouldn't be put out of business.
    Mr. Mulvaney. Mr. Chairman, I can change the way the place 
is run while I am there. Only you folks can change the 
underlying DNA of the Bureau. That means changing the statute.
    Mr. Trott. Great. Well, I appreciate your comments. I also 
thought giving guidance is important because, as it existed in 
the prior Administration, the CFPB acted more like the Mafia 
than a consumer protection agency.
    My time has expired. I recognize the gentleman from 
Georgia.
    Mr. Loudermilk. Thank you, Mr. Chairman. And thank you, 
Director Mulvaney, for being here today. Listening earlier, 
when you were talking about the statute and how--the 
interpretation, I think you are exactly right. The way the 
statute was written doesn't compel you to answer any questions 
here, but you are here answering the questions.
    Mr. Mulvaney. Right.
    Mr. Loudermilk. And I think that is a testimony to you 
wanting to do good government--governance. And the testimony 
that you want to operate the organization in the way it should 
be operated in protecting consumers. And I think that is what 
we are really here to get at, is to have this flow of 
information. And I apologize that some have turned this into 
just trying to be a gotcha moment, when I think Americans are 
really tired of that.
    There is something that you said a little while ago that 
resonated with me, and it--you said, the more we take in, the 
more we have to lose, which goes back to something, a principle 
that, when I worked in the military and with 20 years in the IT 
industry was, you don't have to protect what you don't have. In 
other words, if you don't need data, don't have the data, don't 
collect the data.
    And I appreciate that you had mentioned to Mr. Hill earlier 
that you stopped the Bureau's collection of consumer 
information, as you came in. Again, data collecting that you 
don't have to have, you don't necessarily need to have, but 
becomes a risk to be compromised in the future.
    And can you elaborate a little more on the specific items 
that you are looking into to improve CFPB's cybersecurity? 
Because that is a big concern to a lot of Americans today, 
especially with agencies that do hold a lot of data.
    Mr. Mulvaney. Well, what we did was prioritize and triage, 
Congressman Loudermilk. And what we did is we treated the data 
within our enforcement area one way, because we have to have it 
in order to enforce the law. You have to have some information. 
So we have tried there to make accommodations. We have worked 
with some of our sister agencies whose systems are a little bit 
more robust than ours are to hold our data for us. We have 
limited some of the stuff that we take in. We have done some 
more onsite, where we look at the data but don't collect it. To 
your point, we might need it but we don't need to keep it. So 
we have tried to make accommodations there.
    We have not had as much--it has not been as quick over in 
the supervision area. Another thing that we do there, which is 
different from enforcement. They are related but not the same. 
Because we have those preexisting relationships with, say, the 
Department of Justice when it came to enforcement, did not have 
those preexisting relationships when it came to supervision. So 
it has been a little slower there.
    I will also tell you that we have undertaken to do some 
let's say third party--we have hired folks to see if they can 
hack into our system.
    Mr. Loudermilk. Good.
    Mr. Mulvaney. I don't want to go into any more detail than 
that. I have talked to you about it privately. But we have 
done, I think, that which you would have done under the same 
circumstances to try and make sure that our systems are 
protecting the data so that we don't have the same type of 
problems that we sometimes accuse people of having in the 
marketplace.
    Mr. Loudermilk. I highly commend you because of all the 
agencies that I have dealt with on this issue, you are the 
first one who has laid out a plan that actually hits what we 
should be doing, and I commend you for that.
    I would like to follow up on something that Chairman 
Hensarling asked earlier about the CFPB's Qualified Mortgage 
rule, but you didn't have time to fully answer that.
    During your required 5-year review of the rule, will you be 
looking at both the costs and the benefits for consumers in 
this rule?
    Mr. Mulvaney. That is what the statute says to do, so we 
will be doing it.
    Mr. Loudermilk. Well, thank you. And while we are talking 
about the statute, I have looked at the statute and I don't see 
CFPB in the statute anywhere, Consumer Financial Protection. 
What is the name of the organization and why do we call it 
CFPB?
    Mr. Mulvaney. I don't know why we call it the CFPB, but 
that is not the name of the organization. The organization is 
the Bureau of Consumer Financial Protection. That is the name 
of the statute, Title X. That is the subheading under the 
Bureau. That is the defined term under the Bureau. The Consumer 
Financial Protection Bureau does not exist.
    Mr. Loudermilk. So I assume if there are any legal filings, 
it is all done under the name of the statute, not the CFPB?
    Mr. Mulvaney. The stuff that we send to the Federal 
Registry--Federal Register is done in the name of the Bureau of 
Consumer Financial Protection. I was surprised to find out that 
our lawsuits are actually brought in the name of the Consumer 
Financial Protection Bureau, which surprised me, and it is a 
practice we are going to change. But the CFPB technically does 
not exist.
    Mr. Loudermilk. Wow. One closing thought. Dealing with 
transparency, that has been brought up and a lot of accusations 
have been made about your transparency here. What I have seen 
is a lot of transparency from this organization. In the 
previous leadership of this organization, there was a high lack 
of transparency when it came to this committee asking for 
information that we needed. And I believe and I hope that that 
will be different under your directorship, that we will get 
information that we request and ask for.
    Mr. Mulvaney. I have said this to the Chairman, I will say 
it to the Ranking Member. Ask us for stuff, because I think you 
might be surprised once you know more about what we are, you 
might be more inclined to work together to help reform the 
place.
    Mr. Loudermilk. Thank you for your work.
    Chairman Hensarling. [presiding.] The time of the gentleman 
has expired.
    The Chair now recognizes the gentleman from Ohio, Mr. 
Davidson.
    Mr. Davidson. Thank you, Mr. Chairman.
    Director Mulvaney, I want to thank you for doing two jobs 
very well, and I appreciate you for taking on that extra task. 
And, frankly, I appreciate your family for supporting you in 
doing that. So thank you.
    Would you say the CFPB or the Bureau of Consumer Financial 
Protection--so we are talking about the same place--is a 
nonpartisan agency?
    Mr. Mulvaney. In what sense?
    Mr. Davidson. Is it affiliated with a particular political 
ideology or political party?
    Mr. Mulvaney. I understand. I think it is fair to say that, 
as of this point in time, the Bureau of Consumer Financial 
Protection is probably perceived as being closely aligned with 
Senator Elizabeth Warren.
    Mr. Davidson. And so in some ways, is it acting in a way 
that is different than an Executive branch agency?
    Mr. Mulvaney. I think since I have gotten there, things 
have changed. I think certainly I have run the place 
differently than Mr. Cordray did, if that answers your 
question.
    Mr. Davidson. Well, I think it gets at it. But culture is 
really important. And, frankly, the Executive branch, as you 
have highlighted, its job is to execute the law, the law as 
passed not necessarily the law as its director wishes existed. 
And I am particularly concerned about the culture that was 
created there by the former director. It seems to perhaps be 
hyper-partisan, to be in some ways well outside the scope of 
the statute and beyond the limited authority that it has, in 
the sense of a charter, but as you have highlighted, the 
authority is massive. And so you can really flesh out what is 
at the heart of the ideology of the person leading the 
organization.
    And so just to highlight that, do you feel that a 
nonpartisan agency, why would they need to spend money on a PR 
firm?
    Mr. Mulvaney. That is a great question. Not really sure. If 
you are speaking of the GMBB contract?
    Mr. Davidson. Well that would be in the abstract. But, yes, 
particularly they chose GMBB which isn't just a PR firm, they 
are a particular brand of PR firm. What do you know about that 
brand?
    Mr. Mulvaney. What I know is that we have canceled that 
contract, we are in the process of canceling that contract.
    Mr. Davidson. Thank you. And I appreciate you for that. Do 
you feel--I don't want to draw a conclusion based on the fact 
that you have canceled it. Do you feel that the American people 
were getting a good value for the $43 million that CFPB was 
spending with GMBB?
    Mr. Mulvaney. If I thought I were getting good value for my 
$43 million, I would not have sought to cancel the contract.
    Mr. Davidson. Do you feel like they were effective at 
conveying the mission of the Bureau?
    Mr. Mulvaney. Let me put it to you this way. I don't think 
that our statutory mission was being served. I am not sure why 
we have to--the SEC does not advertise that it exists. The FDIC 
does not advertise that it exists.
    I guess you could make the argument that in the very early 
days, when you are going from nothing to something, maybe you 
could make the argument that you should let people know you do 
exist. But that is an argument for a declining expenditure on 
advertising over the course of time, not an increasing line 
item on advertising.
    So, like I said, we are in the process of canceling the 
contract and I think it was the right decision.
    Mr. Davidson. Thank you for your stewardship on that. And I 
just find it particularly odd that an agency, even with the 
size of budget--and thank you for reigning that in as well--
that CFPB has had, 3 percent, the highest of any agency in this 
decade in spending on PR. Not that no agency spends money on 
PR, but way out of bounds. And with a hyper-partisan, Hillary 
Clinton-affiliated PR firm, a firm that Barack Obama spent 
millions and millions of dollars with when he was a 
Presidential candidate.
    Mr. Mulvaney. I want to make one thing perfectly clear, Mr. 
Davidson, just so--and this is particularly aimed at my 
colleagues across the aisle. That $242 million that I spent on 
the building, I could take that and hire Breitbart. I could 
take that and hire the Drudge Report to do marketing that I 
like for the Bureau. I am not going to do it, because it is the 
wrong thing to do. But I have that kind of flexibility. I could 
hire the Heritage Foundation to do education. I could hire AEI 
to do the same type of thing. It is a tremendous amount of 
discretion. I am not going to abuse that. But the statute 
certainly permits it.
    Mr. Davidson. Yes, and so I think to your point there, the 
wide-open nature of the statute really does more to highlight 
the views and ideologies of the person making the decisions. In 
this case, Director Cordray had a very different value system 
than the one you have carried there, and I thank you for your 
stewardship and I have a couple other questions with a little 
bit of time remaining, but my time has indeed expired. So thank 
you, Director Mulvaney, and I yield.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Tennessee, Mr. 
Kustoff.
    Mr. Kustoff. Thank you, Mr. Chairman. And thank you, 
Director Mulvaney, for coming to testify this afternoon. We 
appreciate it very much.
    First of all, let me say that I appreciate the tone and 
candor that you have expressed today on both sides to all 
questions across both aisles. I think that we both share the 
common belief that the heart of real consumer protection means 
returning the power of the Bureau to the hands of the consumer 
rather than one single bureaucrat. Certainly, that is something 
you have talked about today. And again, I do appreciate your 
tone.
    By increasing the transparency of the CFPB, I don't think 
there is any doubt that the consumer benefits by having 
increased economic freedom. Part of this was discussed in the 
Bureau's strategic plan, as one of your primary objectives to 
``identify and address outdated, unnecessary and unduly 
burdensome regulations in order to reduce the unwarranted 
regulatory burdens.''
    Director Mulvaney, could you elaborate on some of the 
changes that you will impose or you have imposed to ensure that 
all consumers have access to markets for financial products and 
services?
    Mr. Mulvaney. Sure. And keep in mind, the reason we are 
doing that is that is a specific mandate of the statute. I was 
always surprised, I don't think that appeared in the strategic 
plans in the past, even though it is in the statute. I may be 
wrong, it may have been in there. But I think for some reason I 
seem to remember that in previous strategic plans, the previous 
management did not isolate that, did not draw attention to the 
fact that this is part of our job. Part of the statutory 
mandate is to look at overly burdensome and unduly burdensome 
regulations.
    So what we are doing is exactly that. We go through--one of 
the primary tools for that, Mr. Kustoff, is the 5-year lookback 
that we do. And you have heard me mention that several times 
here today, that stuff that has been on the books for 5 years, 
we will go back and take a look at and see if it is working out 
the way we thought it would, did it have unintended 
consequences, did it have good consequences, does it need to be 
revisited, those types of things. And that is--that is one of 
the primary things we have been doing.
    You have also heard us talk about just going ahead and 
announcing that we are going to be revisiting certain rules, 
revisiting the payday rule, revisiting the HMDA rule under the 
argument that I want to see the information myself. I want to 
go through the Administrative Procedures Act. I want to collect 
the data, I want to get the notice and comments, and I want to 
see what the cost/benefit analyses look like to see if I would 
have made the same decision that my predecessor did.
    So I think in a variety of different places, we are doing 
everything we can to try and bring some common sense back to 
the way the Bureau is run and how it interacts with both 
consumers and the providers of capital.
    Mr. Kustoff. And by doing that, does that adequately strike 
a balance, if you will, between the industry concerns and 
consumer needs?
    Mr. Mulvaney. I hope so. That is what we are shooting for 
is a balance. I have met with as many consumer groups as I have 
met with industry groups. It is about balance and it is about 
listening to all the sides of the equation before making a 
determination, not going into an analysis with a predetermined 
outcome and just checking the box, well, I know I'm going to do 
this but I know the law says I have to talk to that bank so I 
go talk to that bank. I don't care what they say but I have to 
say that I talked to them. That's not the right way to do what 
we do. And to the extent it happened in the past, it's not 
going to happen in the future.
    Mr. Kustoff. You generally this morning and this afternoon 
talked about what you walked into, the employees that you have 
encountered at the CFPB. How would you characterize their tone 
and ethic, if you will?
    Mr. Mulvaney. I tell you, it has been one of the most 
pleasant and positive surprises. The overwhelming majority, 
overwhelming majority of the folks I think who work there just 
want to be good bureaucrats. They want to be good Government 
workers. And they are working just as hard under my new 
direction as they were under Mr. Cordray's. And that has been a 
pleasant surprise. The quality of the work, especially the 
legal work that I have seen, is as good as I have seen from any 
place in my adult career. That has been very, very encouraging, 
that folks have been able to switch gears. And I think that 
speaks well of our ability to be a credible regulatory body 
going forward.
    That said, is there a very small minority of people who 
would like to see me fail because they are ideologues and they 
are activists? Yes, they are there. And we will just have to 
deal with it. That is life in Washington, D.C. in the 21st 
century.
    Mr. Kustoff. One concern that people have had under the 
prior director was overreach by the CFPB. Do you feel like now, 
now that you are the director or the acting director, that 
there is not the concern that people like me would have in 
terms of overreach by the CFPB?
    Mr. Mulvaney. If it is in the statute, we are going to do 
it. Beyond that, we are going to be very reserved in the 
execution of our authority.
    Mr. Kustoff. Thank you. I yield back the balance of my 
time.
    Mr. Mulvaney. Thank you.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from New Jersey, Mr. Gottheimer.
    Mr. Gottheimer. Thank you, Mr. Chairman.
    Thank you, Mr. Mulvaney. Per the AP, a review of the CFPB 
database obtained by the AP through a Freedom of Information 
request shows that the Bureau issued an average of two to four 
enforcement actions a month under former Director Cordray, the 
last appointee. But the database shows zero enforcement actions 
have been taken since November 21, 2017, 3 days before Mr. 
Cordray resigned. Except for enforcement actions strategically 
announced yesterday, there has been nothing coming out of the 
CFPB.
    Mr. Mulvaney, reports indicate that you have scaled back 
the investigations--
    Mr. Mulvaney. I hate to interrupt you, Congressman.
    Mr. Gottheimer. Yes, sir.
    Mr. Mulvaney. We did not announce any enforcement actions 
yesterday.
    Mr. Gottheimer. OK, so I will just get to my question then.
    Mr. Mulvaney, the reports indicate that you have scaled 
back the investigation of Equifax. And while Equifax's 
regulatory filings note the investigation still exists, the AP 
recently reported from three sources that the agency has not 
ordered subpoenas against Equifax or sought sworn testimony. 
These are preliminary and common steps in any investigation, as 
you know, and it seems you have also abandoned plans to test 
data protections at Equifax.
    More than 143 million people were affected by this, a 
service that they didn't even sign up for. Their handling of 
the response was flawed, from providing immediate information 
to victims to providing services to address their failures. In 
my opinion, the agency has clear jurisdiction. Why is the 
agency failing to aggressively address this issue which 
affected so many Americans?
    Mr. Mulvaney. A couple of different things, and I have 
mentioned this. I know that you haven't been here for the rest 
of the hearing.
    Mr. Gottheimer. Sorry. Sorry, yes.
    Mr. Mulvaney. I have mentioned this a couple different 
times, but I will go back and do it again.
    Most of what you just said is wrong. It is not your fault, 
because it was reported, but it is--
    Mr. Gottheimer. I am eager to get the facts, so thank you.
    Mr. Mulvaney. It is inaccurately reported.
    We do not comment, generally, on ongoing investigations. So 
I will say this about Equifax.
    At the end of their last 10-Q filing, they disclosed that 
they were being investigated by the Bureau of Consumer 
Financial Protection. And the story broke, I think that Reuters 
broke the story that said we had done what you just described.
    Mr. Gottheimer. AP.
    Mr. Mulvaney. I am not in a position to correct that, 
because I am not allowed to comment, or our practice is not to 
comment on the existence or nonexistence of ongoing 
investigations. Clearly, folks knew it was ongoing because 
Equifax chose to disclose it. I was not in a position to 
clarify anything. And I think the folks who leaked the 
inaccurate information knew that. So all I said was, I 
encourage folks to go look at the 10-Q--the 10-K filing that 
will come, I think, at the end of the first quarter. And, sure 
enough, when Equifax filed their 10-K, they once again 
disclosed the fact that they were being investigated by the 
Bureau of Consumer Financial Protection.
    So most of what you said is wrong. It is not your fault, 
because it is the media. But I will--
    Mr. Gottheimer. I assume you are disturbed, like the rest 
of us, about obviously what's been found and the millions of 
people whose lives were affected.
    Mr. Mulvaney. Again, I was one of those folks. But I do not 
comment on ongoing investigations.
    Mr. Gottheimer. Thank you. If we could switch gears 
quickly, prior to taking over the CFPB, the agency was 
proactively protecting first responders. Director Cordray at 
the time was making sure first responders awaiting payments 
from the 9/11 Zadroga Fund weren't being scammed. Of course, 
these are the police and firefighters that responded for us 
after the 9/11 terrorist attacks and that were being scammed, 
and they are the people that were moving rubble and helping 
those injured, and helping our country recover after a 
terrorist attack.
    But now there is at least one company, and among others, 
trying to take advantage of these heroes and scam their 
payments. One company allegedly misled police officers, 
firefighters, and other first responders about the terms of 
advanced payments. In some cases, the transactions were 
equivalent to rates of more than 250 percent. The company's 
convoluted contracts confused consumers and charged unlawfully 
high interest rates for advances. USA TODAY wrote about one 
former officer who was disabled by respiratory illness after 
responding to Ground Zero. The officer received $355,000 in 
advances as he waited for his settlement, thinking it would be 
a mere 19 percent interest. Instead, the company charged 
roughly--sought roughly $860,000 in total repayments.
    Do you think, A, do you know if the Bureau is still going 
after companies like this? And do you think the Bureau is 
appropriate to go after companies like this?
    Mr. Mulvaney. I am not exactly sure if the facts and 
circumstances you mentioned relate to the one lawsuit that I 
know is public, so I am going to assume that it is. If it is 
not, I apologize, we will have to straighten it out--
    Mr. Gottheimer. Yes, speak just broadly about this.
    Mr. Mulvaney. It is similar enough.
    Mr. Gottheimer. Yes.
    Mr. Mulvaney. It is publicly disclosed we filed a lawsuit 
against a company called RD Legal. That is an ongoing piece of 
litigation. We did not dismiss that. We are actively pursuing 
the causes of action against RD Legal.
    Mr. Gottheimer. And so taking out that specific case 
because I know you can't comment on specific cases, in general, 
companies that are taking actions against victims of first 
responders of 9/11 and who were victims of companies like 
these, what is the opinion, what is your opinion on it?
    Mr. Mulvaney. Folks that we catch breaking the law will be 
pursued by the Bureau.
    Mr. Gottheimer. OK. Thank you very much and thank you for 
your time.
    Chairman Hensarling. The gentleman yields back.
    The Chair now recognizes the gentleman from New Jersey, Mr. 
MacArthur.
    Mr. MacArthur. Thank you, Chairman. And Director Mulvaney, 
thank you for your presence here today and your candid answers.
    I wasn't here when Dodd-Frank was passed, I wasn't here 
when CFPB was started. And maybe I don't feel any reflexive 
need to either defend or attack this institution. I just want 
to see the agency do its best for consumers.
    I know there are bad actors out there. I spent a life in 
business and I encountered some of them. And so I am a strong 
advocate for consumer protection.
    I am concerned though about second-order effects of some 
things that I have seen CFPB do. And I am concerned that it 
might hurt the very consumers that it is purportedly trying to 
protect.
    Enforcement penalties have an effect on companies that, in 
my view, should be commensurate with what they have done. If 
they have done some egregious act, then the penalties should be 
commensurate with that act.
    The reality though is, for public companies, their value is 
some multiple of their earnings. And a million-dollar reduction 
in earnings can be a $15 million effect. The mere suggestion 
that a company has acted badly can destroy its reputation in 
the public markets and it can drive it into a tailspin. And 
that worries me, because these companies are owned by Main 
Street investors, 401(k) funds, pension funds.
    Are you familiar with the PH&H case?
    Mr. Mulvaney. I am, yes, sir.
    Mr. MacArthur. I spent a good deal of my time 1 year or 2 
years ago questioning your predecessor about that case. PH&H is 
domiciled in my district. They employ 3,500 people in my 
district. And tell me if I am getting any of these facts wrong. 
They were tried inside the CFPB. The result was a $6.4 million 
judgment, which ignored the statute of limitations. But that 
aside, that was the judgment.
    Your predecessor, then-Director Cordray unilaterally 
increased that to $109 million. And the company subsequently 
lost over a billion, with a B, over a billion dollars in market 
valuation.
    Is that case resolved? Was it finally adjudicated? Or is 
that still pending?
    Mr. Mulvaney. I am going to be careful here. There was a 
decision handed down by an appellate court. I do not believe 
the time for filing appeals has run out yet. So it is 
technically still ongoing; either side can still appeal. But 
there was a decision handed down by the court of appeals.
    Mr. MacArthur. But it is fair to say, and I am not trying 
to litigate that case here--it is complicated and I think my 
own view is that CFPB overreached and hammered a company that 
was relying on guidance from two different agencies. But that 
aside, the point I am trying to make is a billion dollars of 
value was wiped out, and that affected Main Street investors, 
pension fund holders, 401(k) investors, the employees of that 
company. And it has been bouncing around the courts now because 
there was overreach. And the director's unilateral judgment of 
$109 million was challenged and that challenge has been 
sustained.
    Mr. Mulvaney. Go back to the Chairman's opening comments 
about what the director can and cannot do. And I hope the 
Ranking Member pays attention to this. Because what you just 
described is an accurate factual representation of what 
happened.
    I am the court of appeals from the administrative law 
judge.
    Mr. MacArthur. And that is my point. So my question to you, 
Director, is do you look--does any part of CFPB look at the 
effect on companies' valuations, on second-order effects from 
the penalties that you impose? Is there that kind of analysis 
to see whether the effect is really, really commensurate with 
the offense?
    Mr. Mulvaney. Honestly, I don't know, because I haven't 
been called upon to do that yet. But to the point you're 
making, which is should we consider what is going to happen? 
Absolutely.
    Mr. MacArthur. I would urge you to do that.
    In my remaining seconds, I just want to thank you for doing 
two jobs. There has been much fuss made today about the fact 
that you are filling this role temporarily until June 22. There 
is not a company in the world, when they lose the senior 
executive, which happened when Richard Cordray stepped down to 
run for Governor. That is his prerogative. I am not faulting 
him, but he created the vacancy. It takes time to fill 
vacancies. And the President asked you to do this temporarily. 
It is a lot of work and I, for one, appreciate your efforts in 
getting it right.
    Mr. Mulvaney. Yes, sir.
    Mr. MacArthur. Thank you. I yield back.
    Chairman Hensarling. Does the Ranking Member seek 
recognition?
    Ms. Waters. Unanimous consent to enter into the record, 
sir, two communications. One from Consumers Union in support of 
the Consumer Financial Protection Bureau, and U.S. PIRG, also 
in support of the Consumer Financial Protection Bureau.
    Chairman Hensarling. Without objection.
    The Chair now recognizes the gentleman from North Carolina, 
Mr. Budd.
    Mr. Budd. Thank you, Mr. Chairman. Thank you, Mr. Mulvaney, 
as well. I appreciate all you do for service in this Nation and 
your vision for the CFPB is one that I support, transparency 
and objectivity. So thank you. Thanks also for doing two jobs 
for the price of one. We could sure use a lot more of that in 
this city.
    So last year a Wall Street Journal investigation found that 
a large number of public comments that were submitted to 
Federal agencies, including the FCC and the agency that you 
head up, CFPB, that those are actually fraudulent submissions 
using stolen identities of real people to mimic actual 
grassroots support. All this according to the Wall Street 
Journal.
    Does the CFPB have text analytic measures in place to 
separate and identify legitimate public comments from bot and 
other computer-generated IDs? And if not, why?
    Mr. Mulvaney. I think--I am going to do my best to answer 
that question and then I am going to get back to you with more 
details. I think we do have systems in place that would filter 
out what are obviously form responses. If a bunch of them are 
the exact same, we know about that. I don't know what we do to 
get to the more sophisticated stuff, to actually track down if 
it is a real person or not. But I do know that we have some 
protections in place to make sure that we know if someone wrote 
in their own answer or if someone was sending in a response 
from somebody else.
    Mr. Budd. OK. So I want to switch over to data security and 
discuss some of the efforts you have taken to improve the 
Bureau's data security program. Can you tell me how many 
confirmed breaches of consumer personally identifiable 
information have occurred within the Bureau's consumer response 
system and in the company portal?
    Mr. Mulvaney. Yes, it is just north of 200. I don't have 
the exact number. We think there are another 800 that we 
suspect might have been lost, but we haven't been able to nail 
that down.
    Mr. Budd. How many complaint narratives have been published 
in the consumer complaint portal with unredacted consumer or 
third-party names?
    Mr. Mulvaney. A couple hundred. Your point is this, we are 
supposed to redact that information and those fall through the 
cracks and the unredacted stuff ends up on the publicly 
available portal, which is wrong.
    Mr. Budd. I understand.
    What specifically has the Bureau done under your leadership 
to improve data security? I think that was one of your stated 
goals when you stepped up to the role.
    Mr. Mulvaney. We are taking a long look at it, doing a 
bunch of different things, including asking some of our sister 
agencies to help us manage data while we fix our systems. And 
the primary thing we are doing right now is actually working 
with the Department of Defense to test our own vulnerabilities.
    Mr. Budd. To shift gears a bit, and this may have come up 
earlier in the hearing. But you have discussed previously the 
number of well-paid economists that work there, 40 or 50 or so, 
and it is hard to do a reduction in force the way it is 
constructed, the way the statutes are for your agency. Is there 
a way to take well-paid key employees and perhaps do an 
interagency loan of these employees?
    Mr. Mulvaney. Yes, it is called detailing, and we have 
actually reached out to some folks to see if they are 
interested in doing that. If there are folks that we have that 
we could be getting a better return on our investment in them 
in another agency, we are exploring that possibility.
    Mr. Budd. Thank you again for your time.
    Mr. Chairman, I yield back.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentlelady from New York, Ms. Tenney.
    Ms. Tenney. Thank you, Mr. Chairman. Thank you, Mr. 
Mulvaney, for your service and for withstanding all this 
exciting testimony today while we have another--
    Mr. Mulvaney. It's just I don't remember the room being 
this cold. Is it colder down here than it is up there?
    Ms. Tenney. It is cold in here. That's why I have my coat.
    But I do want to say, I enjoyed reading some of your 
preparatory materials, including referencing Madison in the 
Federalist Papers. And I always--when I think about who is in 
charge, I always think about Madison's Federalist 10, which 
says enlightened Statesmen will not always be at the helm. And 
I think we are prepared for that.
    And that is one of the reasons I want to ask you, I know 
you have been asked this. But again, going back to the 
importance of transparency and the importance of accountability 
in this body. And if you could just say one more time, and I 
know that you have had this, and I apologize if you have said 
it in another way.
    How can we make CFPB more accountable? I know we are doing 
that under your leadership. But to understand that if we are 
going to have unenlightened Statesmen someday at the helm 
again, how do we prevent that from happening using the checks 
and balances in our constitutional system? And I knew you 
alluded to the appropriations process and bringing us back to 
the Congress for that. Can you highlight just maybe a couple of 
things that you would do as Chairman to make sure that in the 
event that you aren't the Chairman and we have someone that is 
not as enlightened as you are, how we protect the people?
    Mr. Mulvaney. Thank you for the opportunity. We'll skip 
over the appropriations, because we talked about that. And if 
there is one thing you could do to bring some transparency and 
accountability to the Bureau, it would be that. But beyond 
that, I made a couple suggestions and I will talk about some 
other ones.
    I would love to have an independent IG. I have gotten 
tremendous service from the inspector general. I do not mean to 
denigrate their work at all. I think we have worked with them 
extraordinarily well. But they do share us with the Federal 
Reserve Board. It's actually a cost savings to us to have our 
own IG.
    By the way, I am going to go down this list a little bit, 
and I think y'all have voted on just about all of these and I 
think most of them have passed on a bipartisan basis. I would 
love to see myself, this position, answerable to the President 
and removable at will, as opposed to just for cause. I think 
that makes it a lot more accountable.
    I think what we call applying the REINS Act to our rules 
would help bring some consistency across various agencies. Keep 
in mind, one of the things that I think is important is to make 
sure that when we put out a rule or a reg, we are not doing the 
exact opposite of what one of the other regulators is doing, so 
that we don't say you have to do A and the FDIC saying you have 
to do the exact opposite of A. And right now, I don't think 
there's a very robust method to do that. If we had more 
oversight from you folks in terms of the OIRA rules, if we were 
brought under OI, for example, in terms of coordinating across 
various agencies, that would be helpful.
    So there are a lot of things that we could do. We talked 
about the five-person commission to smooth things out so you 
don't get these wild swings between me and Mr. Cordray and 
whoever comes next.
    So there are a bunch of things that you can do, a bunch of 
things you have already done. And I do encourage you to 
continue to push those reforms as you look at your version of 
the banking bill, the Crapo bill, that the Senate has passed. 
Because I think now is the time to do it. If you don't do it 
now, my guess is it could be a long time.
    And I didn't have a chance to say this earlier, so I want 
to say this. I don't think that we are in a rush. I don't think 
that we have to have a bill by the end of this week from the 
Senate. I think we need to go ahead and do it right, because I 
don't think you get a chance to do it again for a long time.
    Ms. Tenney. Thank you very much. I appreciate the 
testimony. And I think that down the road, I do think we have 
to do it right this time. I think we have an opportunity. We 
have an opportunity, of course, hopefully to get the Senate to 
act on many of the bills that we have that you have cited and 
to make sure these things go through. But I think we are on the 
road.
    But I do appreciate your leadership and your willingness to 
come here and be very honest and frank with our committee 
today. It was really a pleasure to listen to you. It is very 
unusual to see someone in Government that is just so honest and 
transparent and we appreciate it.
    Mr. Mulvaney. Thanks very much.
    Ms. Tenney. So thank you so much for your service.
    Mr. Mulvaney. I appreciate it.
    Ms. Tenney. Thank you. I yield back.
    Chairman Hensarling. The gentlelady yields back.
    The Chair wishes to inform all Members that votes are 
currently taking place on the floor. There being no other 
Members in the queue, I would like to thank the witness for his 
testimony today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing stands adjourned.
    [Whereupon, at 1:44 p.m., the Committee was adjourned.]

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