[Senate Hearing 115-305]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-305


   THE CONSUMER FINANCIAL PROTECTION BUREAU'S SEMI-ANNUAL REPORT TO 
                                CONGRESS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                                   ON

  RECEIVING AND DISCUSSING THE CONSUMER FINANCIAL PROTECTION BUREAU'S 
SEMI-ANNUAL REPORT TO THE COMMITTEE ON RECENT ACTIVITIES, RULEMAKINGS, 
        SUPERVISORY ACTIONS, AS WELL AS FUTURE PLANS FOR ACTION

                               __________

                             APRIL 12, 2018
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: http: //www.govinfo.gov /

                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
31-195 PDF                WASHINGTON : 2019                  


            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                      MIKE CRAPO, Idaho, Chairman

RICHARD C. SHELBY, Alabama           SHERROD BROWN, Ohio
BOB CORKER, Tennessee                JACK REED, Rhode Island
PATRICK J. TOOMEY, Pennsylvania      ROBERT MENENDEZ, New Jersey
DEAN HELLER, Nevada                  JON TESTER, Montana
TIM SCOTT, South Carolina            MARK R. WARNER, Virginia
BEN SASSE, Nebraska                  ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas                 HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota            JOE DONNELLY, Indiana
DAVID PERDUE, Georgia                BRIAN SCHATZ, Hawaii
THOM TILLIS, North Carolina          CHRIS VAN HOLLEN, Maryland
JOHN KENNEDY, Louisiana              CATHERINE CORTEZ MASTO, Nevada
JERRY MORAN, Kansas                  DOUG JONES, Alabama

                     Gregg Richard, Staff Director

                 Mark Powden, Democratic Staff Director

                      Elad Roisman, Chief Counsel

                      Joe Carapiet, Senior Counsel

                      Travis Hill, Senior Counsel

                 Elisha Tuku, Democratic Chief Counsel

            Laura Swanson, Democratic Deputy Staff Director

           Corey Frayer, Democratic Professional Staff Member

                       Dawn Ratliff, Chief Clerk

                      Cameron Ricker, Deputy Clerk

                     James Guiliano, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, APRIL 12, 2018

                                                                   Page

Opening statement of Chairman Crapo..............................     1
    Prepared statement...........................................    40

Opening statements, comments, or prepared statements of:
    Senator Brown................................................     2
        Prepared statement.......................................    40

                                WITNESS

Mick Mulvaney, Acting Director, Consumer Financial Protection 
  Bureau.........................................................     4
    Prepared statement...........................................    41
    Responses to written questions of:
        Senators Brown, Warner, Van Hollen, Cortez Masto, and 
          Jones..................................................    47
        Senator Reed.............................................    62
        Senator Scott............................................    63
        Senator Sasse............................................    65
        Senator Warren...........................................    72
        Senator Cotton...........................................   184
        Senator Schatz...........................................   184
        Senator Cortez Masto.....................................   188

              Additional Material Supplied for the Record

The April 2018 Semi-Annual Report of the Bureau of Consumer 
  Financial Protection...........................................   205
List of bills cosponsored by Mick Mulvaney submitted by Senator 
  Warren.........................................................   261
Letter submitted by the National Association of Federally-Insured 
  Credit Unions..................................................   264
Letter submitted by the Consumer Bankers Association.............   269
Letter submitted by the Carolinas Credit Union League............   279
Letter submitted the American Council of Life Insurers, American 
  Insurance Association, American Land Title Association, and 
  other U.S. Trade associations..................................   280
Letter submitted by the National Association of Insurance 
  Commissioners and the Center for Insurance Policy and Research.   281
Letter submitted by the Credit Union National Association........   283

                                 (iii)


 
                   THE CONSUMER FINANCIAL PROTECTION
                BUREAU'S SEMI-ANNUAL REPORT TO CONGRESS

                              ----------                              


                        THURSDAY, APRIL 12, 2018

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:16 a.m. in room SD-538, Dirksen 
Senate Office Building, Hon. Mike Crapo, Chairman of the 
Committee, presiding.

            OPENING STATEMENT OF CHAIRMAN MIKE CRAPO

    Chairman Crapo. By a slim majority vote, the hearing comes 
to order.
    [Laughter.]
    Chairman Crapo. Today we will hear from CFPB Acting 
Director Mick Mulvaney on the most recent Semi-Annual Report of 
the Consumer Financial Protection Bureau and the Bureau's 
activities since his appointment in November 2017.
    On April 2nd, the CFPB released its fall 2017 Semi-Annual 
Report, which provides insights on the issues consumers face 
and primarily focuses on the CFPB's significant work between 
April and September 2017, including rulemakings, supervisory 
actions, and enforcement actions.
    The CFPB recently announced a series of requests for 
information on various functions, including its rulemaking, 
supervision, guidance, and enforcement processes.
    Consumer protection is vital for a properly functioning 
financial marketplace and is best determined by a robust, 
quantitative analysis.
    I look forward to learning what feedback the CFPB has 
received from stakeholders with respect to its requests and how 
consumers and the marketplace stand to benefit from changes 
being considered.
    I have long been concerned about the ever increasing 
amounts of ``big data'' collected by companies and the 
Government.
    In 2014, the Government Accountability Office issued a 
report in which it highlighted shortcomings in the CFPB's data 
collection process and privacy controls and recommended a 
number of improvements.
    The CFPB's data collection is especially concerning in 
light of a number of high-profile cyber attacks, such as last 
year's Equifax data breach and recent news about how outside 
groups have collected private information from Facebook users.
    I commend Acting Director Mulvaney for treating these 
concerns seriously by freezing the agency's collection of 
personal information while the agency reviews the ways it can 
improve its data security program.
    Today we should discuss how the CFPB's data collection 
process can be narrowed and enhanced to better protect 
consumers' personal information.
    While I am encouraged by today's testimony, the fundamental 
structure of the CFPB needs to be reconsidered to make it more 
transparent and more accountable.
    I continue to support a bipartisan commission instead of a 
single Director, a congressional funding mechanism, and a 
safety and soundness check.
    Given the changes taking place at the agency, now is an 
appropriate time to consider the future of the CFPB.
    Senator Brown.

               STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Mr. Chairman. Welcome, Director. 
Good to have you.
    The reason we are here today is that there was a financial 
crisis a decade ago caused by predatory lenders. That crisis 
cost millions of Americans their jobs, their homes, their 
savings.
    The St. Louis Fed looked at the subprime mortgages made 
from 2000 to 2007. It found that 70 percent--7-0--of those 
loans were refinances. That is important. It means that most 
subprime loans were not going to people who were ``buying too 
much house.'' These loans were going to people that had already 
paid off some of their debt and built some equity.
    Subprime refinance loans allowed shady lenders to steal the 
equity from homeowners with false promises of lower monthly 
rates under confusing payment plans. These loans, designed to 
steal wealth from hardworking families, overwhelmed the banking 
system and crashed the whole economy.
    There was no Consumer Financial Protection Bureau while 
this was happening in those years, from 2000 to 2007. There was 
no dedicated cop on the beat to be tough on predatory mortgage 
lenders or to warn consumers about these loans.
    The result was the biggest financial crisis and recession 
since the Great Depression. The lesson from 2008 is simple: If 
we do not protect hardworking Americans from powerful Wall 
Street banks and financial scammers, it can bring down our 
entire economy.
    That is why we created the CFPB. Its job is clear: to fight 
for hardworking families against unfair, abusive, and deceptive 
practices, the tricks and traps that some financial 
institutions design in order to line their pockets.
    It is a consumer-first agency. Before Mr. Mulvaney's 
arrival, the CFPB got $12 billion--$12 billion, $1,200 
million--in relief for 29 million Americans that had been 
harmed by shady practices.
    Before Mr. Mulvaney arrived, the CFPB was doing its job. It 
initiated a handful of enforcement actions every month on 
behalf of the consumers it was created to serve. It is a 
consumer-first agency.
    But now Mr. Mulvaney is trying to convince us that 
protecting families and prosecuting shady lenders is ``pushing 
the envelope.'' That is simply a lie. Protecting consumers is 
not ``pushing the envelope.'' That is the agency's mission. It 
is a consumer-first agency. Look at the title: Consumer 
Financial Protection Bureau.
    It is a mission that Mr. Mulvaney is completely failing at. 
The number of enforcement actions under his watch? Zero. Well, 
actually, that is not correct. The number of enforcement 
actions under his watch is negative four. Not only has the CFPB 
not initiated a single enforcement action, it has withdrawn 
lawsuits against four payday lenders that charge consumers 
triple-digit interest rates.
    It is Mr. Mulvaney who is pushing the envelope. His 
appointment at the CFPB was only made possible by ignoring the 
law that created the CFPB, which says that the Deputy Director 
should be in charge of the agency.
    Yesterday marked the 50th anniversary of the Fair Housing 
Act. Mr. Mulvaney observed this year's anniversary by moving to 
weaken the office of Fair Lending--the office that focuses on 
discriminatory lending.
    While he claims the agency is under a hiring freeze, he has 
actually created new positions at the Bureau. He has installed 
his own political appointees. That may seem unsurprising given 
the behavior of this Administration, but it has no precedent in 
the short life of the CFPB.
    Not only did Mr. Mulvaney replace nonpartisan career staff 
with his political allies, he gave them enormous salaries.
    In his role at the CFPB, Mr. Mulvaney is continuing the war 
on working families he started at OMB. As Budget Director, he 
worked to slash benefits for Americans making $30,000 to 
$40,000 a year and enact tax cuts that benefit the wealthiest 
Americans while adding trillions of dollars to our national 
debt.
    At the CFPB, he is handing out favors to Wall Street and 
shady lenders. He is lining the pockets of his top four 
political appointees with over $1 million in salaries. Remember 
I said there are eight political appointees, never been done in 
this agency. Four of those appointees together make over $1 
million in salary. They are not economists. They are not doing 
the work of bringing actions against people who cheat 
consumers. They are political appointees. He has not taken on a 
single enforcement action that would continue the CFPB's good 
work of putting money back in the pockets of consumers harmed 
by financial scammers, harmed by shady lenders.
    Shel Silverstein, with whom we are all familiar, once said, 
``If you have to dry the dishes, and you drop one on the floor, 
maybe they will not let you dry the dishes anymore.'' Mr. 
Mulvaney seems to be following that advice. He is hoping that 
if he does a bad enough job running the CFPB, Congress will 
take away the CFPB's ability to protect consumers.
    Congress should not fall for it. We have seen that the CFPB 
can be a real, positive voice and force for American consumers. 
We know the real problem is not the CFPB.
    Thank you.
    Chairman Crapo. Thank you, Senator Brown.
    Director Mulvaney, thank you for being with us today. We 
appreciate your attendance here and look forward to our 
discussions with you. You may proceed with your testimony, and 
as usual, we ask you to try to conclude it within 5 minutes. 
And anything you do not get said of your statement will be put 
in the record. The time is yours.

STATEMENT OF MICK MULVANEY, ACTING DIRECTOR, CONSUMER FINANCIAL 
                       PROTECTION BUREAU

    Mr. Mulvaney. Thank you, Senator. Mr. Chairman, thank you, 
Ranking Member Brown. I will not take the whole 5 minutes. I 
think I have submitted a written statement for the record, and 
I think you also have the written copy of the Semi-Annual 
Report, which is the reason for the hearing today.
    Let me just say this: I am happy to be here, happy to 
answer your questions, happy to talk a little bit about the 
operations of the Bureau of Consumer Financial Protection, and 
I hope that amongst other things today we can use this time to 
try and draw attention to ways that the Bureau can be improved, 
especially in terms of accountability and transparency.
    I evidently made a little bit of news yesterday when I 
reminded everybody, or at least pointed out the fact that while 
I have to be here by statute, I do not think I have to answer 
your questions. If you take a look at the actual statute that 
requires me to be here, it says that I ``shall appear before 
the Committee on Banking, Housing, and Urban Affairs of the 
Senate,'' and I am here and I am happy to do it.
    I want to make it clear that I am going to answer every 
question that I can today. I am not using this as an excuse not 
to answer your questions. But the statute says I have to 
appear. Elsewhere in the same statute, it says that the head of 
FSOC ``shall appear, discuss, and answer questions,'' and it 
says that the Office of Financial Research, the Director 
``shall appear and testify.'' Either that is a mistake and it 
needs to be fixed, or it was done on purpose and it needs to be 
fixed. It is just one example of many of ways that I think we 
can improve the Bureau of Consumer Financial Protection because 
I think we all maybe could admit that it was not perfect the 
first time. As someone said yesterday, actually, it was a 
Democratic Member yesterday who said the statute was not handed 
down from on high.
    So I look forward to talking about my management of the 
Bureau, about the statute, and about ways that we can make this 
Bureau more accountable to you and more accountable to the 
American people. I know it was set up to be independent, and 
that is fine; it was set up supposedly to be free of 
micromanagement, and I agree with that. I do not think that 
equates to being free of oversight, free of accountability, and 
free of transparency. So I hope that if we can accomplish 
anything together today, we can maybe draw some attention to 
ways that this particular part of Government can be improved.
    Senator Brown. [Presiding.] Senator Shelby can go first, if 
you would like.
    Senator Shelby. Thank you.
    Director Mulvaney, we appreciate you. We know your 
background as a Member of the House, and I believe you knew a 
lot about the House Financial Services Committee. We call it 
the ``Banking Committee.'' You served there, so you bring some 
experience to this job, not just to OMB but to this job itself.
    Actually, I personally believe you will bring a ray of 
sunshine to a black hole of bureaucracy, and it is just a good 
start. I like what you are trying to do. I have always been 
concerned about the structure of this. I fought it. I agree 
with Chairman Crapo. We tried to make a commission here, not 
one person, not like a czar or a dictator or whatever with no 
accountability. And I think you are on the right track.
    I do believe that as we have a discussion here, a 
conversation this morning, some of us would be interested in 
some of your thoughts on how we can restructure this or what 
direction should we go. We all have some ideas, because I think 
it is important. And you seized on a couple of things a minute 
ago, and I think they are very important to any agency, and 
especially this agency--that is, accountability and 
transparency. And if we can work on that together, we will do 
something for the American people, because I do not think you 
can get around that.
    So what are your thoughts as far as structure? I think we 
might have to do some legislative changes here.
    Mr. Mulvaney. We do. I have got one suggestion. In fact, 
the Semi-Annual Report makes four, but the one at the top of 
the list is the one I will talk about. Please put the Bureau on 
appropriations. Seriously. I mean, why you all wanted to give 
up the appropriation power that Congress has over this agency I 
do not understand.
    Senator Shelby. Excuse me. Now, a lot of us did not. Just 
appropriators did.
    [Laughter.]
    Mr. Mulvaney. I can walk down to the Federal Reserve on 
October 1st, of this year or next year, Senator, and they will 
give me $700 million if I ask for it. And I do not have to tell 
you what I am going to do with it. The Ranking Member made 
comments about salaries; I welcome a discussion of the salaries 
at the Bureau. There are 370 folks who work there who make more 
than you do. And that may be fine, but my guess is you probably 
did not know that because we do not go through the 
appropriations process.
    The inquiry, the sunshine that is attached to the 
appropriations process does not apply here. So there is a lot 
of stuff that goes on that you all will never know about unless 
you know to ask or I choose to tell you.
    Senator Shelby. Mr. Director, excuse me. Basically it is 
just we have had no oversight of this agency, have we?
    Mr. Mulvaney. I have to come here twice a year, and that is 
about it.
    Senator Shelby. Go ahead.
    Mr. Mulvaney. So there are other things you can do. We have 
asked for you all to take a look at our major regulations. I 
have asked separately for an independent Inspector General. 
There are a bunch of things we can do, Senator, to make this 
better without undermining the mission. I am not seeking to 
undermine the mission of the Bureau. I have every interest in 
enforcing the law. I am required by law to protect consumers 
and educate consumers, and I intend to do both of those things. 
But there is no reason for this Bureau to be a black hole, as 
you put it, Senator, in order to conduct that mission. And I 
very much hope that both the House and the Senate choose in the 
near future to sort of take back some of their oversight 
ability over this Bureau.
    Senator Shelby. Thank you.
    Thank you, Mr. Chairman.
    Senator Brown. Thank you, Senator Shelby.
    Thank you, Director. I would add that I would just point 
out that there have been some 60 appearances in front of the 
two committees, either Director Cordray or one of his top 
assistants, and thousands of pages coming from the Consumer 
Bureau in response to questions, many of them from Members of 
this Committee and the House. So to say there is no oversight 
is, I think, a bit of a reach, but that is all right.
    I want to talk about payday lending. Pew has said that Ohio 
has the biggest payday lending problem in the country. Ohioans 
pay the highest rates for payday loans in the country. The Ohio 
Speaker of the House just resigned, a Republican Speaker, 
perhaps due in part to some exotic trips he went on with payday 
lobbyists.
    Since you started at the CFPB, have you rubbed elbows with 
payday CEOs or their lobbyists and lawyers in exotic locations?
    Mr. Mulvaney. No, sir. The only contact that I have had 
that I know of with anybody associated with the industry was as 
part of our community groups that we have. We have advisory 
boards, we have groups from industry, we have consumer 
advocates. And I have met with those groups in the ordinary 
course of business, but that is the only contact I am aware of.
    Senator Brown. That is the only time, OK. Thank you for 
that.
    You talk about the power of the CFPB. Before your 
appointment, the CFPB used that power, in a good way mostly, to 
get $12 billion in relief for 29 million Americans. You have 
heard those numbers. You have not disputed those numbers. Five 
months, you, on the other hand, have not initiated a single 
enforcement action to put money back in the pockets of 
servicemembers or veterans or seniors or students. You have 
said publicly that it is naive to think financial institutions 
are not out there breaking the law. So what gives there? Why 
don't you use the power to do--why are you using your power to 
do favors for shady lenders and Wall Street banks rather than 
taking action, decisive action, against these bad actors that 
you claim are out there?
    Mr. Mulvaney. I will disagree with that characterization, 
but I will answer your question, which is that we have over 100 
investigations ongoing right now. We have 25 lawsuits, 
including 10 against short-term, small-dollar payday lenders, 
as you describe them. We have, I think, another dozen that are 
in what we call the ``sue or settle part'' of the process where 
we decide to either settle with them or move to a lawsuit. I 
will point out that my predecessor in his first 6 months never 
filed a lawsuit, so it is not at all unusual.
    We continue to enforce the law, Senator. It is a true fact 
that we have not filed a new lawsuit in the last 5 months, but 
I would disagree with the characterization that means that we 
are not enforcing the law.
    Senator Brown. Why, against the advice of nonpartisan CFPB 
staff, did you drop a lawsuit against those four payday 
lenders? What was that about?
    Mr. Mulvaney. I will challenge the characterization of the 
advice I get from staff. That being said, I will not comment on 
the advice that I get from my staff, especially my legal staff, 
and I will point out to you that the dismissal is one of 25 
that I could have done. I chose to only dismiss one. The 
dismissal was without prejudice to bring the action again, and 
there is a current ongoing investigation against the same 
entity. So with that, I will not comment any further because we 
do not comment, as Mr. Cordray did not either, on ongoing 
investigations. But I can assure you that the characterization 
just made is not accurate.
    Senator Brown. Is the CFPB still subject to a hiring 
freeze?
    Mr. Mulvaney. Yes, sir.
    Senator Brown. So during that hiring freeze, you hired 
eight political appointees, more distinct from the nonpartisan 
professional career staff. There used to be none of those at 
the CFPB. Why does CFPB require more political staff in the 
aggregate than worked at the Federal Reserve, the FDIC, and the 
OCC combined in 2016?
    Mr. Mulvaney. Actually, I do not think that last statement 
is accurate. I was just talking--I cannot remember which one of 
the other regulators that I share, and I think it may have been 
the FTC, another independent regulator, and they have more 
political appointees than we do. There was nobody there, there 
were no political appointees other than me on the day that I 
showed up.
    Senator Brown. That is the point.
    Mr. Mulvaney. I will point out, which was unusual, that I 
think I have netted three additional positions, so you talk 
about the eight, but many of them have replaced other positions 
that already existed. They were career, not political. But 
there have only been three new positions created in my time.
    Senator Brown. But eight political appointees.
    Mr. Mulvaney. I think that is right, yes, sir.
    Senator Brown. And you do not question the characterization 
of those, the four of those, their pay exceeds $1 million in 
the aggregate?
    Mr. Mulvaney. Because the pay that they are receiving is 
under the exact same pay system that my predecessor set out.
    Senator Brown. But for career people as opposed to 
political people.
    Mr. Mulvaney. Yes, but they are on the same level. I would 
also point out that I have complete statutory authority to do 
so.
    Senator Brown. But with less necessity because they are not 
doing the kind of work that their predecessors were doing.
    Mr. Mulvaney. No, no. In fact, nothing could be further 
from the truth. What I have done is set up a--if you are 
familiar with OMB, and I think that you are, we have a PADs and 
DADs system where we marry a political appointee to a career 
staffer, and they work together as a team. And that is simply 
the same model that I have used at the Bureau.
    I will also point out that I have complete authority under 
the statute to do exactly what I have done. The statute 
actually contemplates hiring the SES people under Schedule C 
that I have, and we have received approval from the Office of 
Personnel Management to hire the folks. We have done it 100 
percent legally and 100 percent by the book.
    Senator Brown. Of course you have received approval, but 
you have received the approval of this Administration, so no 
surprise there.
    One other question in my last few seconds. You claim to 
want CFPB to be data-driven. You have told staff, ``There is a 
lot more math in our future.''
    Mr. Mulvaney. Yes, sir.
    Senator Brown. But at OMB you reportedly quashed the 
Department of Labor's analysis that showed employers would 
pocket hundreds of millions of dollars in tips meant for 
employees. Is rejecting data that does not help your agenda the 
kind of quantitative analysis we can expect?
    Mr. Mulvaney. Again, I appreciate the question. I disagree 
with the characterization. I did not quash anything at OIRA.
    Senator Brown. So who did that?
    Mr. Mulvaney. I would suggest to you that nobody quashed 
anything. But, again, we do not comment on the OIRA process. 
That is part of the delivery process of the executive branch. 
We do not comment on that. But I can assure you that we did not 
do what you said we did.
    Senator Brown. So you are claiming there was no attempt by 
your agency or any other agency to wipe that information away 
in that process?
    Mr. Mulvaney. The rule to which you are referring is a 
Department of Labor regulation, and I would encourage you to 
raise that issue with the Secretary of Labor the next time you 
get the opportunity.
    Senator Brown. So you are not saying the Secretary--you are 
saying you did not do it. You are not saying the Secretary of 
Labor did not do it.
    Mr. Mulvaney. I am saying I do not comment on how OIRA 
functions.
    Senator Brown. So can we be confident that you will not 
engage in that kind of behavior in this job?
    Mr. Mulvaney. I am not in the business of quashing 
information. I want as much information as I can get. In fact, 
one of the things I have done since I have been there is ask 
for a lot more information from a lot more sources.
    Senator Brown. All right. Thank you.
    Chairman Crapo. [Presiding.] Thank you. Thank you very 
much. Mr. Director, I apologize. I had to step out for a vote 
in the Judiciary Committee.
    Mr. Mulvaney. I completely understand. Of all the folks who 
appear before you, I probably appreciate that more than 
anybody.
    Chairman Crapo. Well, thank you.
    In your Semi-Annual Report's introduction letter, you 
recommend four changes to the Dodd-Frank Act. The first one is 
to fund the Bureau through congressional appropriations. The 
second one is to require legislative approval of major rules. 
The third recommendation is to ensure that the Director answers 
to the President in the exercise of executive authority. And 
the fourth is to create an independent Inspector General for 
the Bureau.
    Could you take a minute or two and explain how important 
that fourth recommendation is about the Inspector General?
    Mr. Mulvaney. Sure, and I want to make one thing perfectly 
clear. This is not to denigrate the work that the Inspector 
General has done. I share an Inspector General right now with 
the Federal Reserve Board, and I have absolutely no complaints 
about the service that I have received from them, so this is 
not a personal attack on the IG. I will tell you that I think 
in the long run it serves this agency, this Bureau, better to 
have our own IG who is dedicated to what we do, who is familiar 
and focused with what we do exclusively. And I would also point 
out to you, Senator, that it is a cost-reducing move for us to 
have our own IG. I think we save about $2 million a year in our 
analysis.
    I honestly do not know what the objection is as to why you 
would not give us our own Inspector General. It makes me wonder 
why we could not get our own Inspector General. I do not know 
how often executive agencies come to you and say, ``Please, 
please, give me more IG oversight. Give me my own.'' But for 
some reason, that appears to be controversial to some folks, 
and I do not understand why.
    Chairman Crapo. Well, thank you. I do not sometimes 
understand the disagreements we have up here either, but I do 
agree with your recommendation here, and I point out this would 
be an independent Inspector General that you are requesting.
    Mr. Mulvaney. Yes, sir.
    Chairman Crapo. We will see if we can find a way, a pathway 
on that.
    In my opening remarks, I talked about data collection. I 
have long been concerned about the ever increasing amounts of 
big data collected by both private sector companies and by the 
Government. The CFPB's data collection has been especially 
concerning to me because of how broad it was and concerns that 
I held about the fact that it was not appropriately being 
managed. And, in fact, some of our evaluation has proven that 
to be the case.
    In light of the high-profile cyber attacks that we have 
seen recently, like the Equifax breach, the OPM data breach, 
and recent news about Facebook--and the list continues to 
grow--I would like to ask you to tell me: How can the CFPB's 
data collection process be narrowed and enhanced to better 
protect consumers' personal information?
    Mr. Mulvaney. We are in the process right now, Mr. 
Chairman, of asking those exact same questions for the reasons 
that you raised. When I got there, the two priorities that the 
previous IG reports had sort of brought to light within the 
Bureau were the travel card--there are some potential 
difficulties there--and our data security. And for that reason, 
I immediately instituted a data collection freeze until I could 
get my arms around what the scope of the difficulty was.
    I met with the IG. We can talk privately about what the IG 
told me because I do not want to talk about it publicly. But 
after the meeting with the IG, what we decided to do is that we 
will go ahead and continue some data collection as it is 
necessary to our enforcement, and we have taken some steps to 
work with our sister agencies, for example, the Department of 
Justice, and then we have also changed some of our practices in 
terms of looking at data but not collecting it. I heard a great 
expression yesterday: ``You do not have to protect what you do 
not have.'' So there is stuff we have to see, but it is not 
stuff we have to keep.
    We have also hired an outside party, I believe it is with 
the Defense Department, to see if they can test the integrity 
of our system, sort of a white-hat hacker type of situation, as 
we try and get a better handle on what we can do. Until I nail 
it down and until I know that we are holding ourselves to at 
least as high a standard as we intend to hold the people we 
oversee, we are trying to be extraordinarily judicious in the 
amount of data that we take, the scope of the data that we take 
in, and how we keep that data. We will continue to keep 
Congress up to speed. I think we have commissioned a report on 
data sources and uses that we will make available to you and to 
the public once it is completed.
    Chairman Crapo. Well, I appreciate that, and I will just 
indicate to you I have been focused on this with regard to the 
CFPB for some time. My understanding is that it was the 
objective and perhaps an achieve objective for the CFPB 
collecting data on somewhere in the neighborhood of about 900 
million credit card accounts. And I do not think most people in 
America realize that there is an extremely high likelihood that 
every time they swipe their credit card, the CFPB collects 
their data. That single fact alone to me is alarming. And so I 
would like to see your evaluation of exactly what is being 
collected, whether there is a justification for collecting it, 
and whether there are adequate safeguards in place.
    Mr. Mulvaney. We actually share your concern, and I hope 
that we will have bipartisan support if we have suggestions on 
how to fix our systems.
    Chairman Crapo. Thank you very much.
    Mr. Mulvaney. Thank you.
    Chairman Crapo. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman and Ranking Member 
Brown. I want to thank you for being here today, Director 
Mulvaney. I appreciate you appearing in front of the Banking 
Committee.
    You had previously referenced that you have the authority 
to ask the Fed for some dollars, which you do.
    Mr. Mulvaney. Yes.
    Senator Tester. How much do you intend on asking the Fed 
when it comes up in October?
    Mr. Mulvaney. We have not done that analysis, Senator. I 
will tell you, because we just got into a new quarter, I asked 
for $98.5 million at the end of March, and that will be 
sufficient to run the Bureau for the next fiscal quarter.
    Senator Tester. OK. How does that compare with the previous 
Director?
    Mr. Mulvaney. That is the same amount he asked for in 2015. 
It is less than he asked for the last couple of years. We have 
some cost savings related to the hiring freeze. But we are also 
spending down what started off as a $170 million reserve fund 
that I did not think we needed.
    Senator Tester. OK. Thank you.
    Mr. Mulvaney, you come to this position with a record of 
being a deficit hawk, and I think that is true.
    Mr. Mulvaney. I try.
    Senator Tester. Yes. But I will tell you that it is 
somewhat troubling that--and this goes on with the Ranking 
Member's questions that your chief of staff is getting paid 
$47,000 more per year, more than Members of Congress, most 
Federal judges, the Vice President, and Cabinet Secretaries, 
more than you. You have got political designees that are making 
right at or right next to $240,000. That does not jibe with 
being a fiscal conservative. Can you explain to me why you had 
to pay these salaries to get the political appointees?
    Mr. Mulvaney. Sure. That is the system that you all set up 
in the statute.
    Senator Tester. I know, but you have the flexibility to pay 
whatever you want.
    Mr. Mulvaney. My average compensation is $195,000.
    Senator Tester. I know, but your political appointees are 
making a lot more than that.
    Mr. Mulvaney. Yes, and, again, I do have the authority 
statutorily to bring in political appointees. Most of the folks 
that you referenced are the senior team that the practice of 
the previous administrator or Director was to pay those folks 
as much as he possibly could, and he did. I did not want to set 
up a situation, Senator, where----
    Senator Tester. So what you are saying is you are given 
more flexibility for your chief of staff to pay him nearly 
$260,000 when Cordray's chief received $212,234?
    Mr. Mulvaney. But the folks who are actually working with 
their senior partners are making the exact same thing that they 
are, so my political folks----
    Senator Tester. I am not talking about them. I am talking 
about your political appointees, because it looks like 
favoritism.
    Mr. Mulvaney. I am saying my political appointees I 
mentioned--I do not know if you are aware or not. The system at 
OMB marries a political person with a career person. And at the 
CFPB, I thought it was important that those folks make exactly 
the same, and they do. That is how we arrived at those numbers.
    Senator Tester. Well, it is--I will just tell you, from my 
perspective--and I think that the debt is important to 
address--I think it smacks of impropriety.
    Mr. Mulvaney. Senator, I would welcome bipartisan review of 
our compensation structure over at the Bureau. I cannot tell 
you the number of folks who I know on the Hill, the number of 
folks who I know in the White House who are begging for jobs at 
the Bureau because of how much money we pay. I do not think it 
is necessary to pay that. We pay it because that is what the 
statute says.
    Senator Tester. Well, all I know is when I look at the 
numbers--and you can talk about how you are paying and how you 
are not. But when Cordray was in there, he paid his chief of 
staff 212,000 bucks. You stepped in, being a fiscal 
conservative, budget hawk and you are paying him $260,000.
    Mr. Mulvaney. And my overall budget will still be $16 
million less than previous years.
    Senator Tester. I know your overall budget will be that, 
but the truth is that I think it is good to be conservative. 
But you need to be consistent. You cannot be conservative when 
convenient. That is all.
    I want to talk about the budget process. We had Secretary 
Perdue in front of the Appropriations Committee yesterday, and 
I talked to Secretary Perdue about cutting crop insurance 
subsidies significantly--I think by almost half, by the way--
which is going to price a bunch of folks out of the business in 
the crop insurance thing. I think Perdue gets it. I think the 
problem may be at OMB. And I am going to tell you, as a farmer, 
you reduce those safety net programs and food security becomes 
a problem because farmers will not buy that insurance. They 
will go broke. And I guarantee you unequivocally if we are 
dependent on multinational corporations to feed this country, 
we have got a national security issue.
    Can you tell me the thought process that went into reducing 
crop insurance subsidies?
    Mr. Mulvaney. Senator, I am having to take off my Bureau 
hat now and put my OMB hat on. To be perfectly candid with you, 
I am not as well prepared on that as I was when I met before 
you on the Budget Committee, but I seem to recall we had this 
similar conversation.
    Senator Tester. No, I am not on the Budget Committee.
    Mr. Mulvaney. Oh, you are not? OK. I got asked the 
question, and the point of the matter was that we tried to 
tailor our benefits to farms that had below quarter of a 
million dollars of adjusted gross income to speak to the exact 
group that you have just talked about, to encourage family 
farming, but small farming.
    Senator Tester. That is not what the President's budget 
proposal does, and I am going to tell you----
    Mr. Mulvaney. With respect, I think it----
    Senator Tester.----Perdue understands agriculture. I hope 
you have people in your agency that understand family farm 
agriculture. Otherwise, I am telling you we will see a mass 
exodus off the land. It will hurt our security in this country. 
It is critically important.
    The last thing, and then I will give up the mic. When I go 
around and talk to folks in Montana--agriculture is the number 
one industry--they say one thing to me, the first thing out of 
their mouth, when we talk about reauthorizing the farm program, 
``Do not screw up crop insurance. It is our safety net. It will 
put us out of business.'' And I am talking about the little 
guys that are telling me that. OK? Thank you.
    Mr. Mulvaney. Thank you, sir.
    Chairman Crapo. Senator Perdue.
    Senator Perdue. Director, thank you for being here today. 
You get double duty, as we have talked about before. I want to 
focus on a couple of things.
    First, you know, the characterization of the creation of 
the CFPB is just astounding to me because people talk about it 
since 2008 forward, the cause and the need for it. It actually 
started in 1998 when that Administration decided that 
homeownership should go up from the low 60s to the mid-70s, and 
it did over a few years. The problem with that, to do that they 
created things like no-income-verification loans, low-income-
verification loans, and the documentation went down and people 
took advantage of that. So it is a much more complicated issue.
    My concern today is that it is the only regulatory body I 
can find that has no oversight by the U.S. Congress.
    Let me ask you a question directly. Are there any 
responsibilities the Consumer Financial Protection Bureau has 
today that were not already under the purview of the OCC, FDIC, 
Federal Reserve, and the FTC?
    Mr. Mulvaney. I think there are two. I think we alone have 
some additional scope under the UDAAP statutes that nobody else 
has, and I think we are the only ones who are explicitly 
charged with promulgating rules and regulations on fair debt 
collection practices. But other than that, the answer to your 
question is no.
    Senator Perdue. In your opinion, do those two needs, those 
two charges, do they justify being outside the purview and the 
oversight of the United States Congress?
    Mr. Mulvaney. No. You could protect consumers without me 
being here.
    Senator Perdue. We already have at least four Federal 
agencies who are charged with consumer financial protection. Is 
that correct?
    Mr. Mulvaney. I think it is at least four, yes, sir.
    Senator Perdue. Now, the next thing is--there are at least 
four. These are the four major ones. The next question I have--
and I get questions about this all the time. When I tell people 
what is being collected, they are really apoplectic. I just got 
back from China and talked to two of the largest market cap 
companies in the world, Tencent and Alibaba, and over there 
they are collecting data, and the customers just assume that 
the Federal Government has access to their data. American 
citizens do not have that assumption. We had Equifax in here a 
few months ago and grilling their CEO over the exposure, and 
rightfully so, of Social Security numbers. But your agency 
today, prior to your taking this responsibility, collects--has 
the right to collect every credit card transaction, every debit 
card transaction, every car loan application, and every home 
loan application package. Is that generally correct?
    Mr. Mulvaney. My understanding is that, yes, we do have the 
right to collect that data.
    Senator Perdue. So the question then is: How is that 
stored? Where is it stored? Are there third parties? Have you 
been hacked? Can you provide a report to this Committee with 
regard to that data? Have there been any breaches to your 
knowledge before you got there and since you have been 
Director?
    Mr. Mulvaney. We have been able to, to your point, 
Senator--and I want to be careful about what I say, and I would 
be happy to talk about this more in private. But we have been 
able to document about 200-odd--I think 240--lapses in our data 
security.
    Senator Perdue. Lapses? Is that a breach?
    Mr. Mulvaney. I think data got out that should not have 
gotten out.
    Senator Perdue. So they call that ``exfiltration,'' right? 
That is when data gets exfiltrated out of your control, and we 
do not know who--do we know who----
    Mr. Mulvaney. I think in that circumstance we put up stuff 
that we should not have put up.
    Senator Perdue. OK.
    Mr. Mulvaney. There are another 800 lapses that we suspect 
but have not been able to confirm.
    Senator Perdue. So 800 potential exfiltrations so far, and 
this could be not just Social Security numbers. This could be 
my personal bank account. Is that correct?
    Mr. Mulvaney. It could be a lot of different things, yes, 
sir, including those.
    Senator Perdue. But every single factor that I have as an 
individual in the United States, every single financial factor 
can be reviewed and can be collected and can be exposed by the 
CFPB. Is that correct?
    Mr. Mulvaney. Everything that we keep is subject to being 
lost, yes, sir.
    Senator Perdue. Thank you. Has any of that information been 
lost?
    Mr. Mulvaney. I do not want to say anything in public. I 
would be more than happy to talk to all of you about what I 
have talked with the IG about, and I think it actually does 
more harm than good to mention it in a public setting.
    Senator Perdue. Agreed. Mr. Chairman, I would propose that 
we have a follow-up meeting. You are not obligated to do that, 
I understand, under this----
    Mr. Mulvaney. I am happy to do it.
    Senator Perdue. But I would love to request a classified 
conversation about this, because I am absolutely deathly 
concerned about the exposure of our data in this rogue agency 
that has no responsibility to this Congress about the security 
of financial information that nobody in my State really 
understands that they are collecting. I am very concerned about 
that, and I have seen the other side just recently in China 
where, if we decide to go in that direction, we have got the 
rogue agency here that will absolutely do that. So I am very 
concerned about the data collection.
    Tell me about the third-party people who are storing this 
data today.
    Mr. Mulvaney. Senator, I would have to get back to you.
    Senator Perdue. Would you, please?
    Mr. Mulvaney. I was under the impression we kept most of 
our own, but I have just been told some of our data is kept by 
third parties.
    Senator Perdue. I know that for a fact.
    Mr. Mulvaney. OK.
    Senator Perdue. I just do not know who.
    Mr. Mulvaney. I would be happy to find out and let you 
know.
    Senator Perdue. To me, I am very concerned about that. We 
went through laborious questioning of one company, an 
individual corporation, about the collection of Social Security 
numbers. And yet I am talking about an agency here that has 
every single financial fact about every single United States 
citizen, potentially, and we have no control over that.
    Mr. Mulvaney. We have what is called ``loan level data,'' 
which is fairly detailed.
    Senator Perdue. It is very detailed.
    Mr. Mulvaney. Yes.
    Senator Perdue. And by loan level, you mean it goes all the 
way to the second decimal place. Is that correct?
    Mr. Mulvaney. Loan level, but, yes, so when you put it on a 
loan application, we know about it.
    Senator Perdue. Now, what is included--I am sorry. I am out 
of time. But what is included in a home mortgage application is 
pretty much every financial fact about an individual. Is that 
correct?
    Mr. Mulvaney. We like to collect a lot of information about 
you from institutions when you take a loan.
    Senator Perdue. So how does that information help the 
agency protect me from, what do we call it, predatory lenders?
    Mr. Mulvaney. We share your concerns, which is one of the 
reasons we have already changed our data collection and are 
continuing to work on trying to----
    Senator Perdue. Would you provide us an update on that?
    Mr. Mulvaney. I would be more than happy to. In fact, I 
think I mentioned we have already commissioned a report, which 
we will be sharing with you.
    Senator Perdue. Thank you, sir.
    Thank you, Mr. Chairman.
    Chairman Crapo. Senator Warner.
    Senator Warner. Thank you, Mr. Chairman.
    I respectfully have to disagree with my colleague from 
Georgia. Having lived through the crisis, having been here and 
seen the meltdown, I think it was absolutely appropriate to 
create this agency. I recall that there were proposals made to 
make this a more traditional agency, and, frankly, the majority 
at that point did not want to do it that way, so it was put 
within the structure that was created, really in many ways 
based upon the majority's wishes. And candidly, Mr. Mulvaney, I 
think--I do not know if you do not know the facts or you are 
not understanding fully data security, but the information that 
the CFPB collects is information on a macro level but does not 
have personalized individual indicators. It is anonymous. But 
to be able to show patterns of behavior is part of the goal to 
see if there are inappropriate practices. Where there is 
individual data collected on an individual basis--and there 
does not seem to be the same kind of concern--is on a bank 
examination, an OCC, a Fed, an FDIC, where you actually go in 
and look at the individual person's account by name. The 
information that the CFPB collects is on a macro basis to see 
trends so that we can identify--and I am very anxious to have 
this in a full-scale hearing, Mr. Chairman, to get into data 
security issues, because I think what happened with Equifax is 
a complete reason why we need a CFPB, a company that was so 
sloppy with personalized information, 147 million Americans' 
data exposed. The company was so sloppy it was unwilling to 
even put in place a known patch that the software vendor had 
put out in place, and then in their aftereffects, put out a 
website that was full of additional flaws. So if there was ever 
a case for a need of a CFPB, it is Equifax, and, candidly, I 
have been disappointed that your agency has not taken more 
aggressive steps to make sure that the Equifax disaster does 
not happen again.
    But I have got a specific separate question. I want to talk 
to you about the payday lending rule. Now, I think the payday 
lending rule's purpose is pretty simple, and I think actually 
most Americans, regardless of side, would agree on this, that 
lenders should figure out up front whether a borrower is able 
to pay back a loan and to make sure that consumers do not get 
caught up in this revolving cycle of debt by folks that do not 
have the same kind of regulatory oversight that our traditional 
lending institutions do.
    Now, you have been in this job a few months, acting in this 
job. Did you order the Bureau to engage in a rulemaking process 
to reconsider the rule on the payday lending?
    Mr. Mulvaney. Yes, sir.
    Senator Warner. And how would revoking the rule or changing 
it help consumers, particularly consumers who are living 
paycheck to paycheck?
    Mr. Mulvaney. Senator, I do not automatically conclude that 
making an indication to revisit the rule assumes that we will 
be revoking the rule or even changing the rule. I have the 
right under the statute to revisit the rules, which I am doing, 
but we have not arrived at any preconceived notions of 
outcomes. That would violate the Administrative Procedure Act, 
which we have not done.
    Senator Warner. But, sir, my understanding is this 
rulemaking took a number of years. It was a subject of a great 
deal of scrutiny. I believe there was industry input as well as 
consumer input. And I guess I really wonder why in your first 
few months of coming into this acting role that this would rise 
to the top of a priority that would say we need to relook at 
the practices of payday lenders, which I think most folks would 
agree is a last result--last resort financial tool and one that 
was absolutely appropriate for this Bureau to take on.
    Mr. Mulvaney. Again, I think it was appropriate for it to 
take on, although I think you could make the argument that the 
statute simply says you have to supervise this industry, which 
may not include regulating. Different story for another day 
perhaps. But why was it at the top of the list? Because it was 
the last thing the previous Director did on his way out the 
door. There was a bunch of public criticism or questions as to 
whether or not it had been rushed. So for a variety of reasons, 
I thought it was entirely appropriate in my role as Acting 
Director to do that the very first thing. In fact, I think I 
did it the first or second day I was there.
    Senator Warner. Well, Mr. Mulvaney, I think there was a 
great deal of work that went into it, and I think the previous 
Director took those actions because of an ongoing need, a need 
that people on both sides of the aisle had discussed for a long 
time. I was disappointed you took that as your first action, 
and I would look forward--my time is up, but I think it is very 
important, Mr. Chairman, on these questions of data security, 
on these questions of how and which institutions collect data 
and whether that data is actually individualized or anonymous, 
that we get the facts out and we tell folks the truth about the 
process that it has engaged.
    Thank you.
    Chairman Crapo. Thank you.
    Senator Heller.
    Senator Heller. Mr. Chairman, thank you. And to the 
Director, thank you very much for taking the time to be here 
today. I know you wear a couple of different hats. In your 
particular position, I appreciate all your hard work and 
efforts.
    As you know, Director, there are things you and I agree on, 
a lot of things that you and I agree on. There are some things 
that we do disagree on, and I would probably like to touch on 
both of those, if you do not mind.
    Mr. Mulvaney. You are not going to talk about Yucca, are 
you?
    Senator Heller. You read my mind. You read my mind. But I 
do want to begin by applauding your efforts to cut the waste 
out of CFPB and your efforts in that behalf. For a State like 
Nevada that has grown as quickly as it has, and the financial 
institutions that are now finally starting to expand after new 
banking rules, this accountability and transparency of the CFPB 
is, I believe, long term going to have a very positive effect 
on my State. So that is where we agree.
    Let us talk for a minute, put your other hat on as the 
Budget Director, and talk a little bit about the issue that you 
brought up. Let me ask you this: Do you believe that Yucca 
Mountain is an unsafe, ill-conceived proposal?
    Mr. Mulvaney. My immediate reaction to that is no. The more 
educated answer is probably to say all I asked for in the 
budget was a continuation of the certification process so that 
we could answer that question as best as we can.
    Senator Heller. Do you know how long this certification 
process has been going on?
    Mr. Mulvaney. All I know is that--and, again, I am almost 
taking off my OMB hat and putting on my old U.S. House of 
Representatives hat the folks in my State have been paying for 
it for about 40 years.
    Senator Heller. Yes, at least 30 or 40 years. You know, in 
2017, as the Budget Director, you put in the application 
process money--I cannot remember, $120, $130 million.
    Mr. Mulvaney. That sounds about right, yes, sir.
    Senator Heller. And I took it out.
    Mr. Mulvaney. Yes, you did.
    Senator Heller. Then you put it in in 2018.
    Mr. Mulvaney. Yes, I did.
    Senator Heller. And I took it out.
    Mr. Mulvaney. Yes, sir.
    Senator Heller. Are you going to put it back in in 2019?
    Mr. Mulvaney. Obviously, we have not started the 2019 
budget, Senator. I look forward to working with you on it. I do 
not know if I have had my mind changed about it yet, but I know 
that you have not changed yours either.
    Senator Heller. If you do, I will take it out. All right? I 
will give you a heads-up.
    Mr. Mulvaney. And that is how it works.
    Senator Heller. All right. You have said yourself that the 
reason that the proposal is in there to restart the licensing 
activity is yours and your decision alone. I think you have 
been quoted as saying that. Is that accurate?
    Mr. Mulvaney. My decision alone? No. I remember meeting 
with Secretary Perry on this a couple different times, so I do 
not know if that is an accurate representation.
    Senator Heller. OK. Over the past 30 years, the Federal 
Government has wasted billions of dollars on this proposal. 
According to the official DOE cost estimates, in 2008 close to 
$15 billion has already been spent on the project before it was 
suspended. Another $82 billion would be needed to license, 
construct, operate the repository through closure, for a total 
cost of approximately $97 billion. Now, that was in 2008 
dollars. I would guess that, if recalculated, those amounts 
would be probably 15 to 20 percent higher. Would you disagree 
with that?
    Mr. Mulvaney. It would certainly be higher. I do not know 
if I could do the net present value or time value of money 
analysis right now. But, yes, they are going to be higher.
    Senator Heller. Knowing that Yucca has not and will not 
ever see the light of day, do you think it is fiscally 
responsible to continue to seek hundreds of millions of dollars 
for this unsafe and ill-conceived proposal?
    Mr. Mulvaney. Senator, let me see if we can agree on 
something, which is you know what is driving it, which is that 
we have nuclear power plants all over the country, including in 
my home State, that are filled to the brim with the waste, and 
we promised those folks that if they paid a tax over the course 
of the last several decades, we would put it someplace. So 
maybe we could work together. If Yucca is not the answer, let 
us work together on finding an answer, because the temporary 
fix we have now is fraught with risk.
    Senator Heller. Are you familiar with a proposal in Texas 
for a repository for this purpose?
    Mr. Mulvaney. Yes, the West Texas something. I remember a 
little bit about that from when I was in the House.
    Senator Heller. Senator Cornyn has spoken of this, and I 
would urge that you have a conversation with him and the desire 
of Texas to actually take this waste.
    Are you also familiar with a proposal in New Mexico to do 
the same thing?
    Mr. Mulvaney. Again, generally, yes, sir.
    Senator Heller. OK.
    Mr. Mulvaney. And I am open-minded to other resolutions. I 
am not trying to beat up on Nevada.
    Senator Heller. I know.
    Mr. Mulvaney. I am trying to figure out a way to put this 
stuff someplace safe.
    Senator Heller. Well, we feel like we are being beat up on.
    Mr. Mulvaney. Fair enough.
    Senator Heller. Just so that you know. And you talk about 
your constituents, those who have paid utility bills and have 
actually had to fund this for three or four decades. You know 
that the amount of money that is in that account right now 
would not cover even in current dollars the $97 billion it 
would take to open this thing up to fruition?
    Mr. Mulvaney. I think that is accurate, yes, sir.
    Senator Heller. OK. Mr. Chairman, I have run out of time, 
but I do want to thank again the Director of taking time for 
being here, listening to my questions and concerns, and let me 
just reiterate, if that proposal is back in there in 2019, I am 
going to do everything I can to reverse those funds and get 
them back out.
    Mr. Mulvaney. I hear you, Senator. Thank you very much.
    Senator Heller. Thank you.
    Chairman Crapo. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman.
    So before the 2008 crash, mortgage lenders ripped off 
families, and regulators did almost nothing to stop it. The 
result was a disaster: 4 million people were forced out of 
their homes, more than 8 million people lost their jobs, and 
2.5 million businesses were shut down.
    So in 2010, Congress established the CFPB to make sure that 
that kind of crisis did not happen again, and a lot of people 
supported it: 60 Senators, 237 Representatives, Democrats and 
Republicans, voted for it.
    But you never supported the consumer watchdog, Mr. 
Mulvaney. You got to Congress after the CFPB was created. But 
in 2012, you voted in favor of a Republican budget that called 
for eliminating the agency entirely. Is that right?
    Mr. Mulvaney. I do not have a specific recollection, but 
that sounds familiar to me, yes, ma'am.
    Senator Warren. Sounds familiar, OK. But that was only the 
beginning. You also voted for Republican budgets that 
eliminated the CFPB in 2013, 2014, and 2015. Does that sound 
right?
    Mr. Mulvaney. Again, yes, ma'am. There were occasional 
Republican budgets I did not vote for. I do not know what was 
in them. But, generally speaking, I see your point, yes, ma'am.
    Senator Warren. All right. And in 2015, you also supported 
a stand-alone bill that would have killed off the CFPB. Is that 
right?
    Mr. Mulvaney. I think that is correct. I think I was a 
cosponsor of that bill.
    Senator Warren. OK. So I want to take a look at what would 
have happened if you had gotten your wish and the CFPB had been 
abolished as early as 2012. So in 2015, the CFPB went after 
Citigroup for cheating its credit card customers. CFPB forced 
Citigroup to return $700 million to people that it cheated.
    Now, if you had gotten your way and the CFPB had been 
abolished in 2012, that $700 million would be in Citigroup's 
bank account right now instead of in the pockets of thousands 
of Americans. Right?
    Mr. Mulvaney. Not necessarily. The Office of the 
Comptroller of the Currency also has jurisdiction over those 
actions and could have brought the same actions.
    Senator Warren. Oh, I see. They could have brought the same 
action. That is the same agency that did not bring those 
actions before the crash of 2008 and that did not bring this 
particular case. But, you know, let us not kid ourselves. Let 
us not pretend like you hope that some other agency would do 
that work, Mr. Mulvaney. I have a list of 11 bills that you 
supported during your time in Congress that would have made it 
harder for States and other Federal agencies to protect 
consumers and to hold cheaters accountable. I would like to 
submit it for the record.
    Chairman Crapo. Without objection.
    Senator Warren. Thank you.
    Senator Warren. So let us look at another example. In 2016, 
the CFPB went after a for-profit college chain called 
``Bridgepoint'' that scammed students with deceptive loans. The 
CFPB returned nearly $25 million to those students. If the CFPB 
had not existed, that $25 million would still be sitting at 
Bridgepoint instead of with working families.
    Let me do one more. In 2017, the CFPB shut down a company 
called ``Top Notch Funding,'' which was scamming 9/11 first 
responders out of the taxpayer money they got to treat medical 
problems developed after 9/11.
    Mr. Mulvaney, if the CFPB had been abolished like you 
wanted, Top Notch Funding might still be out there stealing 
from 9/11 first responders, right?
    Mr. Mulvaney. They might be, or the FTC might have enforced 
the law.
    Senator Warren. Or some other agency might magically have 
intervened, when they did not.
    Mr. Mulvaney. Why would it be more magic to have the FTC do 
it than the Bureau?
    Senator Warren. They have a history of not doing this.
    You know, let us do one more example. In 2013, CFPB went 
after DFS and US Bank and recovered $6.5 million for 50,000 
active-duty members of the military who were targeted for scam 
car loans. Those 50,000 active-duty military would have been 
out of luck if the CFPB had been abolished in 2012, just like 
you wanted. Right, Mr. Mulvaney?
    Mr. Mulvaney. Again, the OCC has concurrent jurisdiction 
over this issue.
    Senator Warren. Yes, they have concurrent jurisdiction, 
which they did not use.
    So I just want to point out one of those 50,000 active-duty 
military members is Ari Cabot-Booras from Hull, Massachusetts. 
His father, Harry, is in the audience today, right back over 
there. When Ari was a 20-year-old soldier, he had good credit, 
but he was pushed into a car loan that was a scam. When he 
deployed to Iraq, his Dad discovered that the loan and the fees 
were taking up more than 60 percent of Ari's military paycheck 
every month. Mr. Booras alerted the CFPB. The agency stopped 
the scam, and Ari got some money back.
    You know, in Congress, you repeatedly tried to kill the 
consumer agency. Since you got to the agency, you have 
announced that you will not use the exact enforcement tool that 
CFPB used to stop every single scam that I have mentioned 
today. You have taken
obvious joy in talking about how the agency will help banks a 
lot more than it will help consumers and how upset this must 
make me.
    But here is what you do not get, Mr. Mulvaney. This is not 
about me. This is about active-duty military. It is about first 
responders and students and seniors and families and Ari and 
his Dad and millions of other people who need someone on their 
side when consumers get cheated. You are hurting real people to 
score cheap political points.
    Thank you, Mr. Chairman.
    Chairman Crapo. Senator Cotton.
    Senator Cotton. Director Mulvaney, welcome to the 
Committee. How does it feel to lead an unconstitutional agency?
    Mr. Mulvaney. Senator, I have given that one a lot of 
thought. I am not sure that I have the discretion to consider 
this agency to be unconstitutional. I work there. I have been 
appointed by the President to be the Acting Director, and I 
think the system starts to break down if people who work at 
places make their own conclusions about constitutionality. If 
the President tells me it is unconstitutional, I will pay 
attention. I am assuming it is constitutional every single day 
when I go in. But I see your point and it is well taken.
    Senator Cotton. That is a reasonable response. As you know, 
a three-judge panel of the DC Circuit had held it to be 
unconstitutional for a variety of reasons.
    Mr. Mulvaney. Yes, sir.
    Senator Cotton. Combining the single Director structure as 
opposed to a five-member commission, its independence from the 
congressional appropriations process, and its independence from 
the President's Executive authority. That court, the whole 
court, just reversed that decision en banc after it was packed 
when Senator Reid broke the rules of the Senate in 2013 to fill 
the DC Circuit. Of those two opinions, which one do you find 
more persuasive--the DC Circuit panel or the DC Circuit en banc 
opinion?
    Mr. Mulvaney. Having worked there, having seen the 
authority and the discretion that is given to the sole 
Director, I think that the circuit decision was well reasoned.
    Senator Cotton. Let us turn then to your report. You 
mentioned a few changes, two of which are funding the Bureau 
through congressional appropriations.
    Mr. Mulvaney. Yes, sir.
    Senator Cotton. We have addressed one of those issues. 
Another one is ensuring that the Director will answer to the 
President in the exercise of his Executive authority. But it 
does not mention, as far as I can tell, the single Director 
structure as opposed to having a five-member commission. Could 
you give me your opinion on that question?
    Mr. Mulvaney. Thank you for that, yes, sir, and we 
absolutely support that. The four that we put in the report 
this year, we tried to have a constant theme, and the constant 
theme was accountability and transparency. And while we think 
that a five-person commission could help smooth out some of the 
variations from one Director to another, Mr. Cordray and I are 
very different people, and we plan to run the agency very 
differently. And a five-person commission might sort of bring 
some stability. We tried to focus these four specifics on your 
oversight and on the accountability that we have.
    Senator Cotton. But from your experiences, you believe that 
the Bureau would operate in a more effective manner for 
taxpayers and consumers alike if it had a five-member 
commission leading it as opposed to a sole Director?
    Mr. Mulvaney. I do not know if any Director of any 
bureaucracy has ever come to you and said, ``Please take my 
power away,'' but that is what I am doing. And to the extent 
you can do that, I think we will all be well served by it.
    Senator Cotton. So let me ask you now to draw on your 
experience as the Director of the Office of Management and 
Budget, which oversees the entire Federal Government. There are 
many examples of five-member commissions, to include in the 
financial services world the SEC, or in your world, in consumer 
protection, like the FTC. From what you have seen and the way 
those agencies operate, is there any reason to believe that 
five-member structure that they have is not suitable for the 
Consumer Financial Protection Bureau?
    Mr. Mulvaney. None whatsoever.
    Senator Cotton. Thank you. Let us turn to the conversation 
we had earlier about your compensation for your employees. I 
believe you said that your payroll will be $16 million less 
than your predecessor's?
    Mr. Mulvaney. Yes, sir.
    Senator Cotton. So $16 million less. Do you know what the 
average compensation numbers are compared to your predecessor?
    Mr. Mulvaney. Total compensation average, $195,000 a year. 
We have 1,627 employees.
    Senator Cotton. How does that compare to Director Cordray's 
average compensation?
    Mr. Mulvaney. It is the same. He is the one who set most of 
this up. I have three departments where the average 
compensation is about $250,000. I have a dozen employees that 
are above $230,000. And I have another dozen after that that 
are above what you all earn.
    Senator Cotton. So the CFPB has had pretty high employee 
salaries going back to its very beginning?
    Mr. Mulvaney. Oh, yes. I think it was set up that way.
    Senator Cotton. Indeed, it was set up in that fashion. I 
have to say I do not remember any Democratic Member of this 
Committee ever asking Director Cordray about the salaries that 
he paid his employees.
    Chairman Crapo, you have been around for a long time. Do 
you remember questions like that?
    Chairman Crapo. I do not recall one.
    Senator Cotton. What about Senator Shelby?
    Chairman Crapo. He is engaged in a conversation.
    Senator Cotton. He was the Chairman. I do not think I 
remember any questions from them either.
    Let me ask you a question about one specific employee: 
Leandra English. What is she up to today?
    Mr. Mulvaney. I honestly do not know.
    Senator Cotton. She purports to be the Acting Director, 
correct?
    Mr. Mulvaney. There is a lawsuit that she is maintaining 
that asserts that, yes, sir.
    Senator Cotton. And I think that actually is in court 
today. How much does she earn?
    Mr. Mulvaney. I honestly do not know; $212,000 is her base 
compensation.
    Senator Cotton. And you do not know what she does?
    Mr. Mulvaney. I am trying to be careful here, Senator, 
because she is suing me. But I have never met her.
    Senator Cotton. So she is earning $212,000, claiming to be 
the Director, running around, and we have no idea what she does 
all day long.
    Mr. Mulvaney. You said it better than I probably could.
    Senator Cotton. If this Bureau was accountable to the 
President and had five members and had congressional oversight 
of its appropriations, do you think maybe we would avoid a 
situation like this?
    Mr. Mulvaney. Well, I certainly think someone would have 
been able to ask the question.
    Senator Cotton. I have to say I am somewhat amused by the 
tone of this morning's hearing. Again, the roles seem to be 
reversed from what they were for the first several years of 
this Bureau. The Democrats seem to have been hoisted on their 
own petard the way this Bureau was structured in the Dodd-Frank 
bill. I think, therefore, we should all take a lesson from what 
we have done here and just adopt some of these prudent 
amendments to its structure. If it was more like the SEC or the 
CFTC or the FTC or the FCC----
    Mr. Mulvaney. All of which are appropriated.
    Senator Cotton. All of which are appropriated and have 
five-member structures and have some greater degree of 
accountability, we would not see this wild swing in the opinion 
that Congress had toward the Bureau and what consumers and 
businesses and other people can expect from the Bureau.
    Thank you, Mr. Director. My time has expired.
    Mr. Mulvaney. Thank you, Senator.
    Chairman Crapo. Senator Jones.
    Senator Jones. Thank you, Mr. Chairman. And thank you, 
Director Mulvaney, for being here today.
    I would like to revisit just a moment the questions from 
Senator Brown and Senator Warner regarding payday lending 
because that is such an important issue in my State. There was 
a reason why President Obama in 2015 came to Alabama. Senator 
Brown's State may be the worst, but we are right up there. In 
fact, President Obama mentioned in his speech that there were 
four times as many payday lenders in Alabama as there are 
McDonald's hamburgers. That is unconscionable. For every one 
person that takes out a payday loan, they end up taking an 
average of eight. About a quarter of a million people, 
Alabamans, in 1 year took out those loans, and they ended up 
being over 2 million loans made that same year.
    I am struck--this is an important issue for State 
lawmakers, for civic leaders. It to me seems bipartisan. It is 
personal. As I watch the members of my community, it is very 
important to the faith community in Alabama. In fact, my home 
church, Canterbury Methodist, took the lead in some--you know, 
kind of lobbying for some changes.
    My concern about the removal of the rule--I do not disagree 
with you that you have the right to take another look, to redo 
the rule, and I initially took you at your word that you had no 
preconceived notions about where that ended up. And then you 
made a comment that you are not sure that supervising means 
regulating, and that troubled me a lot, because I can watch my 
children and supervise them at a playground, but unless I can 
regulate them and they have no consequences for bad behavior, I 
do not know what the difference is.
    So I would like to ask you just your basic philosophy about 
the payday lending industry and whether or not your 
organization will, in fact, commit to some pretty strong 
Federal rules to make sure that they are not completely ripping 
off customers in creating this spiral of debt.
    Mr. Mulvaney. And I think you have actually hit the nail on 
the head there, Senator, which is that I think we might both 
agree that the best way to address this would be through 
legislation, which was what my State did when I lived there. I 
imagine your State either has done or certainly has the ability 
to do it.
    Senator Jones. They have the ability. I am not sure they 
have the political will. I think that is the problem when you 
have got payday lenders who are spending tens and tens of 
thousands of dollars, and the consumers who are taking out 
these loans are taking out loans because they cannot make ends 
meet. It is not emergencies. They cannot match the dollar-for-
dollar payday lenders that are giving to the legislatures 
around the country.
    Mr. Mulvaney. I guess it comes down to who do you trust 
more, your hometown legislature or the U.S. Congress. 
Personally, I have a great deal of faith in my State 
legislature.
    Senator Jones. Does that mean that your notion is that you 
are likely to have a payday lending rule in favor of letting 
legislatures----
    Mr. Mulvaney. We are going to follow the act. We are not 
going at this with any preconceived notions. We have already 
made a request for notice and comment. We are going to go 
through that process. We are going to go by the book. It may be 
possible, it may be that I look at the exact same type of data 
that Mr. Cordray looked at and draw a different conclusion.
    Senator Jones. I agree with that.
    Mr. Mulvaney. That is the discretion that was given in the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, to 
the Director's position, and I encourage you to consider 
whether or not you want to change that. But keep in mind, we do 
not have the ability to make law. That is not what we are 
supposed to do in the executive branch. We are supposed to 
enforce the laws that you pass. And I would encourage you that 
the best way to address the problem that you perceive is to 
pass legislation and not rely on me to do it for you.
    Senator Jones. All right. So thank you very much for that.
    I would like to also get back--and I apologize for doing 
this because I am going to ask you to kind of put both your 
hats on again as well.
    Mr. Mulvaney. Yes, sir.
    Senator Jones. I know that is maybe a little bit 
uncomfortable. It is a little bit bizarre to me that you have 
done that.
    Mr. Mulvaney. I get used to it.
    Senator Jones. But I would like to ask you about the equal 
pay. Earlier on, as OMB Director, you unilaterally withdrew 
things and rules considering equal pay and collection of data. 
This is an important issue for folks in Alabama. The Lilly 
Ledbetter Fair Pay Act was named after an Alabama native. You 
were asked about this in the House yesterday, why you halted a 
rule that would have required large employers to collect and 
report aggregate pay data that was designed to help detect 
trends in unequal pay. Your answers, with all due respect, were 
a little bit flip to me that you just did not give it much 
thought, and I can tell you, Mr. Director, that there are 
millions of women, there are millions of African Americans that 
think about this issue every day. So I basically have two 
questions for you, one as OMB Director and the other as 
Director of the CFPB.
    Number one is: Are you going to revisit the rule concerning 
equal pay and the collection of data concerning equal pay.
    And the second is: I tend to see that attitude about the 
noncollection of that data involving major corporations of over 
100 people in the workplace in the same way as I see, as 
Senator Brown said, about putting consumers first. In other 
words, if you are not wanting to collect data about 
discrimination in the workplace, how can we be assured that you 
are going to in your role put consumers first in your role as 
Director of CFPB?
    Mr. Mulvaney. Thank you for that, Senator, and I apologize 
if my answer came across as flip. What I remember saying 
yesterday was I am simply not familiar with it because I had 
not been asked about it in a while. I think this is an action 
that took place last September, and I have been in front of 
several congressional hearings and had press conferences, and 
nobody asked me. So I simply was not as familiar with it. Since 
yesterday, I have not had a chance to go back and get a little 
bit more up to speed on it.
    Senator Jones. Fair enough.
    Mr. Mulvaney. And keep in mind the reason it comes to OIRA, 
which is part of OMB, is because of the Paperwork Reduction 
Act, and one of the things we noticed when it went through the 
process on paperwork reduction is that we were increasing the 
data fields from 180 to 3,660, which is a dramatic increase.
    We also found when we drilled down into it, Senator, that 
the data was unlikely to yield information that was useful. I 
will give you the classic example. Under health care we were 
treating the accountants and the janitors and the doctors as 
the same. If you were an accountant making X in a hospital and 
you were a doctor making Y in a hospital, you would be lumped 
together, and I am not sure how usable that data would actually 
be as to whether or not there was equal pay for equal work. So 
there were a lot of difficulties with it, which is why we did 
what we did.
    So, again, it is not that it is not important to us. It is 
just we are following the law, and the Paperwork Reduction Act 
tells us to do that, and I think we did it in an acceptable and 
defensible fashion.
    Senator Jones. All right. I think I am out of time, Mr. 
Chairman. Thank you.
    Chairman Crapo. Senator Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman. Mr. Director, how 
are you, sir?
    Mr. Mulvaney. Senator, I am hanging in there. I hope you 
are.
    Senator Kennedy. I am. I know you are familiar with the way 
our credit reporting agencies work. They collect information, 
financial information on all of us and give us a score, and 
then they sell that score and the report to folks who are 
considering loaning us money.
    Senator Schatz and I have a bill. It is a pretty simple 
bill, really, but I think it will be good for the American 
people. Sometimes the reporting agencies get that information 
wrong, but since we are the product, not the customer, they 
have no real obligation to listen to us when you call them up 
and say, ``Hey, you got my information wrong, man, and I cannot 
get my loan.''
    So Senator Schatz and I have a bill that is going to ask 
our reporting agencies to set up a portal so consumers can go 
in there and say, ``Hey, you got my information wrong. Let me 
explain to you why.''
    I am not asking you to commit to supporting that bill, but 
we would like to be able to talk with folks in your office to 
make sure that we get the regulatory part right. Would you be 
willing to----
    Mr. Mulvaney. I am a little bit familiar with it. We do 
look forward to working with you on it. I think there are some 
good ideas there.
    Senator Kennedy. Thank you for that.
    I want to take you back a few years. It is true, is it not, 
that in 2008 and 2009, the American taxpayer--I am talking 
about the people who get up every day and go to work and obey 
the law and pay their taxes and try to do the right thing by 
their kids. The American taxpayer had to give one of our large 
banks, Citigroup, $476.2 billion in loans and guarantees under 
the TARP program. Do you remember that?
    Mr. Mulvaney. I am not familiar with the exact number, but 
I am familiar with the bailouts, yes, sir.
    Senator Kennedy. OK. It is also true, is it not, that the 
American taxpayer had to bail out Bank of America to the tune 
of $120 billion taxpayer dollars. Does that sound about right?
    Mr. Mulvaney. It would not surprise me.
    Senator Kennedy. Well, our friends at Citigroup and Bank of 
America apparently are not busy enough with their banking 
business. They have decided that they are going to set policy 
for the Second Amendment, and Citigroup has announced that it 
will no longer do business with any customer who sells lawful 
weapons to someone under the age of 21. Citigroup has announced 
that it will not sell banking services to anybody who sells 
bump stocks or large-capacity magazines. And I understand that 
Bank of America is about to do the same thing.
    So it looks like we are headed toward red banks and blue 
banks. Do you think that is appropriate?
    Mr. Mulvaney. I think it is troubling, Senator. I do not 
know if there is a role for the Bureau in addressing it. I do 
not bank with either of those institutions, and I think as long 
as I have got the ability to make that decision, then it is up 
to consumers to adequately defend themselves. I think when you 
start to run into the area of possible Government oversight is 
when that choice is not a real choice, and you run afoul of the 
antitrust laws and so forth. But I would be personally slow to 
want to get my Bureau involved in telling companies what they 
must provide when it comes to matters like that.
    Senator Kennedy. Well, let us suppose tomorrow that 
Citigroup decided that it would no longer provide banking 
services to abortion providers. Do you think that would be 
appropriate?
    Mr. Mulvaney. I think that is completely within their 
discretion.
    Senator Kennedy. Do you think it is appropriate?
    Mr. Mulvaney. Personally? I mean, to take my bureaucrat hat 
off, it would not bother me at all. In fact, I might be more 
likely to bank at an institution that did not contribute to 
that.
    Senator Kennedy. OK. Suppose that Citigroup decided it was 
going to no longer offer banking services to people who support 
the pro-life position?
    Mr. Mulvaney. Again, as long as I know about that and have 
the ability to make real decisions, I do not see a role for 
Government intervention in the marketplace.
    Senator Kennedy. Has anybody filed a complaint about 
Citigroup's thoughts and actions with respect to the Second 
Amendment?
    Mr. Mulvaney. That is a great question, and I do not think 
we have searched our consumer complaint database recently for 
that. But I would be happy to take a look and see if a 
complaint has been submitted.
    Senator Kennedy. Well, I am going to file a complaint.
    Mr. Mulvaney. OK.
    Senator Kennedy. OK? Against Citigroup and Bank of America.
    Mr. Mulvaney. We would be happy to work with you on that, 
on searching our database, because it is publicly available 
data.
    Senator Kennedy. I am going to file a complaint because 
they are hurting my people for exercising their constitutional 
rights, and I hope you will--I do not want any special 
treatment, but I would like my complaint considered.
    Mr. Mulvaney. Absolutely.
    Senator Kennedy. Because I find their conduct offensive.
    Mr. Mulvaney. Thank you, Senator.
    Senator Kennedy. Thank you, Mr. Director. Thanks for your 
good work. I think you are doing a great job. I do not care 
what Senator Warren says.
    Chairman Crapo. Senator Menendez.
    Senator Menendez. Mr. Mulvaney, in December the Bureau 
announced that it was eliminating penalties to lenders for 
errors in mortgage reporting and that it plans to reconsider 
its Home Mortgage Disclosure Act rule, which could mean 
allowing lenders to omit information critical to understanding 
lending patterns and policing discriminatory practices. And in 
January you reorganized the Office of Fair Lending and Equal 
Opportunity, and you stripped the office of its enforcement 
powers. This is the office that
Congress--Congress--remember that? I think you started in the 
other House, didn't you?
    Mr. Mulvaney. I am familiar with it, yes, sir. I have heard 
of it.
    Senator Menendez. Yes, OK. So Congress charged in the law 
with combating predatory lending practices, the very practices 
that contributed to the destruction of nearly half of African 
American and Latino household wealth during the crisis and 
Great Recession. Don't these actions send a clear message to 
lenders that the Bureau is pumping the brakes on vigorous 
oversight and enforcement of the Federal fair lending laws?
    Mr. Mulvaney. Not at all, and I can deal with HMDA 
separately, but let me deal with the Office of Fair Lending, 
which has several things that it is supposed to do. It does 
enforcement and supervision, and it also does education in one 
area.
    Within the Bureau, the system that I inherited from the 
previous Director, actually supervision and enforcement is in 
one place, and education is in another. And all I have done is 
to move those things into the appropriate category.
    Senator Menendez. But it was Congress that said that this 
department should do enforcement, not your judgment.
    Mr. Mulvaney. Actually, I think you gave me a great deal of 
discretion over what they do and what they enforce.
    Senator Menendez. Let me tell you what the message has been 
that has been received by lenders. In a February memo to its 
clients, who include Bank of America and Deutsche Bank, on law 
firm said, and I quote:

        On January 31st, we witnessed a major concrete change with the 
        announcement of the Office of Fair Lending and Equal 
        Opportunity would be
        removed from the CFPB's Supervision, Enforcement, and Fair 
        Lending
        Division. The removal of a supervision and enforcement team 
        focused exclusively on fair lending issues will significantly 
        reduce the CFPB's enforcement.

    So let us be clear. We are not going to stand by while you 
thwart the statute and subvert congressional intent, nor will 
we be silent while you give winks and nods to lenders that they 
will no longer be subject to vigorous review of their 
activities under the fair lending laws. We are not going to do 
that. And I do not know how you think you can usurp 
congressional intent, but it is not going to go unchallenged.
    In a January op-ed published in the Wall Street Journal, 
you said that the Bureau would no longer be ``pushing the 
envelope'' when it comes to enforcement. In the 137 days since 
you took over the Bureau, you have not initiated a single new 
enforcement action. The scandals and breaches of consumer trust 
at Wells Fargo and Equifax demonstrate that consumers need the 
CFPB now more than ever. Equifax's egregious failures 
compromised the personal information of an astounding 145.5 
million consumers. Consumers are understandably concerned about 
identity theft and fraud. They are concerned that they will not 
be able to get a fair rate the next time they go get a mortgage 
or a car loan because Equifax failed them.
    In 2017 consumers submitted more complaints to the Bureau 
about consumer reporting agencies than any other product or
service, something you said should help guide the Bureau's 
actions. But yet yesterday, in testimony before the House, you 
reiterated your commitment to scaling back the Bureau's 
activities, saying, ``Regulation by enforcement is done. We are 
not doing it anymore.''
    So, Mr. Mulvaney, does that include eliminating enforcement 
actions under the Bureau's authority to prevent unfair, 
deceptive, abusive acts and practices?
    Mr. Mulvaney. No, sir. Do you know what regulation by 
enforcement is?
    Senator Menendez. Can you answer my question? I am not here 
to answer yours.
    Mr. Mulvaney. Regulation by enforcement is where people 
find out that you accuse them of breaking the law after you 
file a lawsuit against them. That is what I stopped. I believe 
you have the right to know what the law is before I sue you for 
breaking it. Under previous leadership, Mr. Cordray believed it 
was actually OK to change years and years of practice. In fact, 
there is a major lawsuit, I think, that is being considered 
right now over this exact issue, where there was an entity--I 
think it may be from your State, as a matter of fact. In fact, 
it is a resident in your State that was acting under the 
assumption that HUD guidance that had been in force for decades 
was still good law----
    Senator Menendez. Well, obviously, rulemaking needs--always 
has notification and a process before it----
    Mr. Mulvaney. No, it----
    Senator Menendez.----goes into effect, but in addition to 
enforcement activity, the CFPB has rulemaking authority to 
prevent unfair, deceptive, or abusive acts and practices. That 
is the primary way that the Bureau can prevent consumer abuses 
by consumer reporting agencies like Equifax. And your most 
recent regulatory agenda including--you know, does the Bureau's 
most recent regulatory agenda include a rulemaking to protect 
consumers from failures and abuses by consumer reporting 
agencies?
    Mr. Mulvaney. I am sorry. Is there a question?
    Senator Menendez. Does your agency's most recent regulatory 
agenda include a rulemaking to protect consumers from failures 
and abuses by consumer reporting agencies?
    Mr. Mulvaney. It does. That is in the statute, and I think 
my predecessor was there for 5 years and did not do it either.
    Senator Menendez. Well, my understanding is that it is not. 
So if the Bureau does not intend to use its enforcement or 
rulemaking authority to prevent unfair, deceptive, and abusive 
practices by companies like Equifax, I do not know how you 
intend to hold Equifax accountable and protect consumers from 
future catastrophes.
    Thank you, Mr. Chairman.
    Mr. Mulvaney. We have----
    Chairman Crapo. Senator Rounds.
    Mr. Mulvaney. Yes, thank you.
    Senator Rounds. Thank you, Mr. Chairman.
    I want to followup just a little bit on what Senator 
Menendez has suggested, but I perhaps would go at it in a 
little bit different way, Director. If a United States Senator 
or, for that matter, a Member of Congress had a problem with 
the way that you were doing your job, under the current 
guidelines and layout of the CFPB, what are their options?
    Mr. Mulvaney. Very little. In fact, it goes beyond that. If 
you have a constituent back home who does not know or does not 
like what I have done, there is nothing you can do to help 
them.
    Senator Rounds. I think that is really the concern that a 
lot of us have had, that I think there are some times in 
which--as a matter of fact, I think there are a lot of times in 
which a Member of Congress should have a way to get a message 
across to an agency of the Federal Government. Do you know of 
any other Federal agencies that have the autonomy that the CFPB 
does to simply do--and in this particular case, I understand 
that Senator Menendez is disappointed in the way that he 
believes that you should be working on your job. I think a lot 
of us on the other side had real frustrations with the way the 
previous Director had been doing his job.
    Isn't there something within this process that is 
absolutely broken when Members of the elected body here and, in 
fact, the President of the United States, do not have the 
ability to influence the way that this agency is going about 
doing or not doing the job that they were supposed to be doing 
in the first place?
    Mr. Mulvaney. I think it is a dangerous precedent. There is 
no question. You asked a question as to whether or not anybody 
else has the type of discretion and authority that the Director 
of the Bureau of Consumer Financial Protection has, and the 
answer is no.
    Senator Rounds. I think there might be some opportunities 
here for some bipartisan discussions about taking some of that 
authority back.
    Mr. Mulvaney. Again, I do not know why you do not want to 
appropriate my Bureau.
    Senator Rounds. Thank you. Let me work in just a little bit 
different direction for just a minute. You had mentioned 
earlier, Director, and had expressed a concern that while there 
are some perhaps classified discussions that should occur with 
regard to data breaches, loan level data. There might have been 
a misunderstanding as to how much data was included in loan 
level data. Could you share with us how much information the 
agency, the organization, actually collects?
    Mr. Mulvaney. A couple different things, and I can get you 
more details on exactly what we do and do not collect. The 
ordinary practice is to take things like balances, average 
balances, balances at the beginning of the month, balances at 
the end of the month, but we know of no limitation on what we 
can get. None.
    Senator Rounds. So would you be receiving data from a bank 
that would include a Social Security number?
    Mr. Mulvaney. We could.
    Senator Rounds. Would it have loan numbers?
    Mr. Mulvaney. In a bank exam context, yes, absolutely, we 
get the loan numbers.
    Senator Rounds. Would it have account numbers at a bank?
    Mr. Mulvaney. The same, yes, sir.
    Senator Rounds. Would it have tracking numbers from----
    Mr. Mulvaney. That is a good--and, again, I can get you all 
the detail on what we actually do collect. I am not familiar 
with what we actually go in and take out of every particular 
file.
    Senator Rounds. Would it be fair to say that in your 
discussions with your staff as you come into this agency to try 
to gear up, did you ask questions about how much information 
and did you have any concern about the amount of data that this 
agency was collecting?
    Mr. Mulvaney. Again, yesterday I thought it was a 
Democratic colleague of mine who said that you do not have to 
worry about what you do not keep. So one of the questions is: 
Do we actually need the stuff we are asking for? And if we do 
not, then why are we asking for it?
    Senator Rounds. Do you actually keep it, or do you--and I 
understand that there are different ways in which you can 
securely obtain, maintain data over a long period of time. Are 
there third-party entities that are retaining this on a 
contractual basis for the agency?
    Mr. Mulvaney. I just asked that question of my staff in 
response to an earlier question. I understand that we do farm 
some of our data out to third parties.
    Senator Rounds. But would it be fair to say that it is 
similar to a cloud establishment, basically where there is an 
intent to utilize independent third parties that have as their 
area of expertise the ability to maintain that data for you?
    Mr. Mulvaney. I do not know if it is a cloud-type 
structure, but, yes, it would be somebody other than us.
    Senator Rounds. Did the----
    Mr. Mulvaney. And if they get hacked, then that information 
is at risk.
    Senator Rounds. You have had a lot of discussion back and 
forth today with a lot of folks on either side of the aisle. 
Have you had any questions that you looked at so far into this 
process and said, ``I needed to clarify something a little bit 
more than what I have done so far''? Are there any questions 
that have been asked so far that you would like an opportunity 
to clarify or correct in terms of material that we have 
received so far today?
    Mr. Mulvaney. Oh, there is probably a bunch of stuff that I 
will find after the hearing. I did want to point out to Mr. 
Menendez that I think he tried to make the insinuation that we 
were not enforcing the UDAAP statute. That is not true. We are 
actually litigating lawsuits right now. There has been a lot of 
attention to the fact I have not filed any brand-new lawsuits. 
We are litigating 24 or 25 lawsuits right now. We are doing 100 
investigations right now. There are a dozen investigations that 
have gone into that ``sue or settle'' component that I am 
talking about. We are enforcing the law. I want to be perfectly 
clear. Do I have criticisms of this Bureau? I absolutely do. 
But I am trying to be a good bureaucrat. I never thought I 
would say that, but that is my job. And I am trying to enforce 
the law vigorously where necessary, and I think we are doing a 
good job of it. So I think some of the characterizations that 
we do not care about protecting consumers, it is unfortunate 
and not accurate.
    Senator Rounds. Thank you, Director Mulvaney.
    Mr. Mulvaney. Thank you for the opportunity.
    Senator Rounds. Thank you, Mr. Chairman.
    Chairman Crapo. Thank you.
    Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman. Welcome, Mr. 
Director.
    Mr. Mulvaney. Mr. Van Hollen, sir.
    Senator Van Hollen. I think some of our colleagues may be 
surprised to learn that we actually worked together in the 
House on some deficit reduction efforts with respect to the 
budget.
    Mr. Mulvaney. Clearly, you and I were the only ones worried 
about it.
    Senator Van Hollen. Which is why I wanted to raise a 
question with your other hat on. Just yesterday in the Budget 
Committee, we had Dr. Hall, the head of CBO, the nonpartisan 
Congressional Budget Office, who issued their report finding 
that the tax bill that was passed out of this Congress and 
signed by the President is going to add $2 trillion, very close 
to $2 trillion to the national debt over the next 10 years. Did 
you see that report?
    Mr. Mulvaney. I know of the report. I have not had a chance 
to read it.
    Senator Van Hollen. I really urge you to take a look at 
their analysis because it directly contradicts the fanciful 
theories we heard floating around that somehow the tax cut was 
going to pay for itself.
    The other thing that we have found, since the beginning of 
the year corporations that have gotten these windfall tax 
breaks have used $235 billion of that money for stock buybacks. 
Are you aware of that phenomenon?
    Mr. Mulvaney. I am not familiar with the exact number, but 
I am familiar with the reporting generally, yes, sir.
    Senator Van Hollen. All right. And stock buybacks are 
simply a way of increasing the value of stocks held by CEOs and 
executives and stockholders. And during the whole debate, one 
of the things we tried to point out was that 35 percent of the 
stock owned is actually owned by foreign stockholders, money 
being borrowed by the U.S. Government and in the form of stock 
buybacks going directly into the pockets of foreigners.
    One of the things I found stunning, actually--maybe not 
totally surprising, but still the magnitude of it was 
stunning--was the CBO report found that when the tax plan has 
fully kicked in at the end of the 10-year period, 80 percent of 
the income generated from new economic activity is going to go 
into the pockets of foreigners, not American workers.
    I want you to take a look at that because it certainly does 
not sound like putting Americans first to me, and it was a 
stunning finding. And I just want to be clear what he said. He 
said, yes, the tax bill will generate some new economic 
activity, but 10 years from now, 80 percent of the income 
generated from that new economic activity into the pockets of 
foreigners. Very disturbing finding.
    Mr. Mulvaney. Did he explain how that was going to happen?
    Senator Van Hollen. I would be happy to go into great 
detail. Part of it is the fact that foreigners own a large 
share of our stock, but there were other components.
    Mr. Mulvaney. I was going to say because 35 percent and 80 
percent are different.
    Senator Van Hollen. That is true. But that is the 
conclusion they reached at the end of the 10-year period, which 
I found stunning, and I hope our colleagues will take a look at 
it.
    Let me ask you a question on payday lending because I want 
to pick up on what Senator Jones asked.
    Mr. Mulvaney. Sure.
    Senator Van Hollen. Because you made this reference during 
your response to a question about supervisory versus 
regulatory, and then you told Members here that you are going 
to look at the same facts and you may reach the same conclusion 
with respect to regulation.
    Mr. Mulvaney. Or may not.
    Senator Van Hollen. But it is a threshold question, right, 
is it not, as to whether or not you have the regulatory 
authority? So have you concluded--would you agree that you have 
the regulatory authority, regardless of what the details of the 
regulation may be, you have the regulatory authority with 
respect----
    Mr. Mulvaney. There have not been any conclusions. I raised 
the point to make this point, Senator, which is it would be a 
lot clearer if you all would legislate and I would enforce.
    Senator Van Hollen. Look, but this is a threshold question. 
You must have reached a decision----
    Mr. Mulvaney. No, sir.
    Senator Van Hollen.----on this threshold question. You are 
telling me you have not reached a threshold question about 
whether you can do any payday lending regulation?
    Mr. Mulvaney. I am looking you in the face. I do not think 
I am under oath, but I am looking you in the face under oath 
and saying, no, I have not made any predetermination about that 
issue.
    Senator Van Hollen. So apart from the details of what any 
regulation might entail, you say you might not do one, period, 
because of the possibility that you claim you do not have the 
authority.
    Mr. Mulvaney. Senator, I can honestly tell you, I have no 
idea what we are going to do in payday.
    Senator Van Hollen. Let me just--in terms of protecting 
information, Equifax has come up here, and I think we are all 
very concerned about confidential data. I do think it is 
important to point out that Federal agencies are bound by what 
is called the Federal Information Security Act, FISMA. Are you 
familiar with that?
    Mr. Mulvaney. Yes, sir.
    Senator Van Hollen. Right, and under FISMA, if there is any 
agency that has compromised or lost the data of more than 
100,000 people, they have to report to OMB, do they not?
    Mr. Mulvaney. I believe that is correct, yes.
    Senator Van Hollen. Within 7 days. And they have to report 
to Congress within 7 days?
    Mr. Mulvaney. I think that is right as well.
    Senator Van Hollen. Do you think that companies like 
Equifax should have some kind of standard that applies to when 
they have to inform the public about data breaches?
    Mr. Mulvaney. Isn't that addressed in Mr. Crapo's bill? I 
thought that it was raised.
    Senator Van Hollen. I am just asking----
    Mr. Mulvaney. I think it is good practice, yes, sir.
    Senator Van Hollen. OK, because I think we want to take a 
look at nailing that down.
    Chairman Crapo. Equifax is addressed about this issue.
    Senator Van Hollen. No, the----
    Mr. Mulvaney. I am sorry.
    Senator Van Hollen. The issue of generally having the 
responsibility to inform the public within a certain period of 
time is something that applies to the Federal Government, but 
it does not apply today in the private sector.
    Mr. Mulvaney. As a member of the public, I would like to 
know if my stuff gets hacked.
    Senator Van Hollen. I appreciate it. Thank you.
    Chairman Crapo. Senator Tillis.
    Senator Tillis. Welcome, Director Mulvaney. You have spent 
some time in North Carolina and South Carolina, and all 
Carolinians are proud and I am proud of you being in a job and 
head of a department or an agency that I personally wish did 
not exist.
    Mr. Mulvaney. I need you to talk to my son. He got into UVA 
and UNC, and he is making the wrong decision.
    Senator Tillis. We know what the wrong decision is.
    Mr. Mulvaney. That is exactly right.
    Senator Tillis. Look, first off, as you go through the 
process on the payday issue, you said something earlier as a 
former speaker of a State legislature, I hope you will 
recognize that the States are well within their authority to 
deal with this issue. And I do not necessarily think that the 
Federal Government needs to weigh into it. States can decide 
what is appropriate and then protect the consumers along the 
way.
    I feel like since the CFPB was created, it kind of reminds 
me of the final stages of a Monopoly game where the players are 
the FTC, the Fed, the FDIC, the OCC. But all of a sudden, the 
CFPB is just buying up all the properties or they are putting 
their hotels and houses on the other places on the Monopoly 
board. It is absurd. I mean, I think in response to one of the 
things that Senator Warren said, that but for the CFPB, this 
person would have been harmed, you responded very quickly that 
the FTC, if they were doing their job, they would have probably 
protected that consumer.
    So outside of UDAAP and fair debt collection, what on Earth 
are you guys doing that should not be something that we 
should--incidentally to the agencies that we have control over, 
that we actually have some responsibility from, should be doing 
their jobs, why on Earth should you be doing it? And isn't 
there a risk that because of that lack of clarity in terms of 
regulatory jurisdiction that some legitimate opportunities to 
enforce regulations could fall through the cracks?
    Mr. Mulvaney. Absolutely, and I think I said earlier in 
response to a question, I think there is an appropriate Federal 
role in
protecting consumers. That does not mean that you have to do it 
through the Bureau of Consumer Financial Protection.
    Senator Tillis. Is there a way for you to really just take 
the position to redefine the scope of the regulatory purview of 
the CFPB and say we do not do this because the FTC should, we 
do not do this because the Fed should, we do not do this 
because the FDIC should, we do not do this because the OCC 
should? You know, actually as a result of the reg reform bill 
that I supported and is now lying in the House, we have got 
four and maybe five de novo banks that are talking about moving 
forward with charters in North Carolina. That is because they 
recognize that maybe they can make a business model work if 
they have a little bit more regulatory certainty and 
regulations that are tailored to the size of their 
institutions.
    One of the real victims that we do not talk about with all 
this regulatory overreach are the people who are not getting 
loans, who are not getting capital. I heard someone speak on 
the floor about how our bill was going to kill the opportunity 
for that mobile homeowner to get a mobile home loan. I have had 
one, and I also lived in that trailer park with a father that 
was doing construction work that we were living on 90-day 
notes. And I know damn well right now those 90-day notes that 
my father was getting back in the 1970s and 1980s he could not 
get today because you simply cannot underwrite them.
    So when we have this discussion about the victims that are 
being saved only because of the CFPB, let us talk about the 
untold victims that because of the regulatory overreach are not 
getting loans, are not getting mobile home mortgages, are not 
able to pay their bills. Do you agree with that?
    Mr. Mulvaney. You and I may be the only people in this room 
who have ever lived in a mobile home, but you are absolutely 
right. There is a consequence to all of this overregulation, 
which is that people do not have access to credit. They do not 
have access to capital.
    Senator Tillis. Yes, so it makes me wonder whether or not 
some people are just laying the predicate to nationalize our 
financial--our banking institution here, and they are willing 
to have some of these victims just lie along the path to their 
end goal.
    Mr. Mulvaney. There is a Senator who is no longer present 
who has written a very vigorous defense of why the Postal 
Service should be in the banking business.
    Senator Tillis. Yes, so if you want to come here and you 
want to talk about all the victims that have been saved by the 
CFPB, you better damn sure be willing to list out all the other 
people who are suffering as a result of the regulatory 
overreach. Do you agree with that?
    Mr. Mulvaney. Yes, sir.
    Senator Tillis. Now, the other thing that I find 
remarkable--I mean, I would expect that you came into this 
hearing with a heart rate of about two, because you know damn 
well there is not a single thing that any one of us can do and 
hold you account for. Do you agree with that?
    Mr. Mulvaney. You can make me look bad, and that is about 
it. You cannot touch me statutorily.
    Senator Tillis. If I could come out with this enormous, 
this horrible story about how you have destroyed a business or 
somebody else's personal life back in my State, you would just 
tell me to pound sand if that is something you wanted to do, 
right?
    Mr. Mulvaney. I am unelected, and nobody can do anything 
about it.
    Senator Tillis. So thank you for being in charge of an 
agency in the administrative branch and try to tell us to make 
you more accountable. I appreciate your service.
    Mr. Mulvaney. If I may, thank you for that. I appreciate 
that. Do not rely on me, because I am not always going to be 
here. At some point there is going to be somebody that these 
folks do not like; at another point it will be somebody you 
folks do not like. Do not rely on the person. Fix the structure 
so that we avoid the potential abuses that exist today. Thank 
you for that, Senator.
    Senator Tillis. Thank you.
    Chairman Crapo. Senator Cortez Masto.
    Senator Cortez Masto. Director Mulvaney, thank you for 
appearing today, and I appreciate your comments as I was 
sitting and listening.
    I would like to jump back to enforcement actions, and you 
started out by talking about that you are engaging in 
enforcement actions. And I believe you talked about undergoing 
right now 100 investigations. Is that correct?
    Mr. Mulvaney. Yes, ma'am.
    Senator Cortez Masto. Were those investigations started 
under your watch or prior to you coming into the----
    Mr. Mulvaney. Some of them. The ordinary course of business 
is that we sort of add some on a regular basis. They drop off. 
There are 100 ongoing at any one particular time.
    Senator Cortez Masto. And under your watch, of those 100, 
some you started?
    Mr. Mulvaney. You would actually be surprised to know I am 
actually not involved in the decisionmaking to start or stop an 
investigation.
    Senator Cortez Masto. But they were either started under--
some of them were started under your watch?
    Mr. Mulvaney. I would imagine, yes, ma'am.
    Senator Cortez Masto. You would imagine but you do not know 
for sure?
    Mr. Mulvaney. Again, I know it sounds strange. I am not 
involved in the process. That is a decision made by career 
employees as to who they investigate.
    Senator Cortez Masto. And the 25 litigation efforts you 
talked about that are ongoing, do you know if any of those were 
started while you were--while you are under the----
    Mr. Mulvaney. I know the answer to that question. We have 
not started any new lawsuits since I have been here.
    Senator Cortez Masto. So there has been no enforcement 
action say, for instance, under your watch?
    Mr. Mulvaney. No new ones.
    Senator Cortez Masto. No new enforcement----
    Mr. Mulvaney. We are actively litigating 24 or----
    Senator Cortez Masto. OK. That is helpful. Does that have 
anything to do with the fact that I heard your comment earlier, 
you were talking about that the CFPB engages in regulation by 
enforcement, and so you have stopped enforcement because you 
have concerns about that?
    Mr. Mulvaney. No. Again, regulation by enforcement is 
different than enforcement. Regulation by enforcement is 
essentially, look, we do not have a rule, we do not have a reg, 
we are not going to tell you what the rules are, but we are 
going to sue you and then tell you after that what you did that 
we thought was against the rules.
    Senator Cortez Masto. Right. For that reason you have not 
started any enforcement actions.
    Mr. Mulvaney. No, ma'am. There are a lot of contributing 
factors as to why we have not filed any lawsuits. That might be 
one of them.
    Senator Cortez Masto. So can I ask, has the Consumer Bureau 
taken any public enforcement action related to the Equifax 
breach?
    Mr. Mulvaney. The policy of the Bureau is not to comment on 
the existence or nonexistence of any ongoing investigations. As 
to Equifax, I would point out to you that they disclosed 
publicly in their last 10-Q that they were under investigation 
by the Bureau of Consumer Financial Protection.
    Senator Cortez Masto. Has the Bureau taken any public 
action related to allegations that Clayton Homes practiced 
racial discrimination in lending to manufactured home buyers?
    Mr. Mulvaney. I do not want to comment on the existence or 
nonexistence. I would be happy to get back to you as to whether 
or not--well, as to--I am not familiar with Clayton Homes as to 
the matters you have just raised.
    Senator Cortez Masto. OK. So let me jump back to another 
issue that has come to my attention. In February the Consumer 
Bureau put out a Request for Information asking for comments 
from interested parties on the usefulness of the Bureau's 
consumer complaint data reporting and analysis.
    Mr. Mulvaney. Yes, ma'am.
    Senator Cortez Masto. Are you using this RFI to either 
dampen the effectiveness of the database or completely remove 
it from public view?
    Mr. Mulvaney. Well, the collection of data is mandated 
statutorily, so we will continue to do that.
    Senator Cortez Masto. Let us talk about this, because we 
are not just saying general data. These are consumer 
complaints.
    Mr. Mulvaney. Yes, ma'am.
    Senator Cortez Masto. That is what I am talking about.
    Mr. Mulvaney. Yes.
    Senator Cortez Masto. So you did an RFI.
    Mr. Mulvaney. Right.
    Senator Cortez Masto. And what is the intent of the RFI? Is 
it your intent to take the consumer database offline, out of 
public view?
    Mr. Mulvaney. It is not the intent. It is one option 
available to me.
    Senator Cortez Masto. Why are you even looking at that?
    Mr. Mulvaney. Because it is not statutorily mandated.
    Senator Cortez Masto. What is not statutorily mandated?
    Mr. Mulvaney. The public-facing portion of the consumer 
database, the complaint database.
    Senator Cortez Masto. So let me ask you this then: How are 
we to gather information and see patterns or practices? And how 
are you going to continue to work with other law enforcement 
agencies like the attorney generals across the States when you 
are looking at consumer protection?
    Mr. Mulvaney. Closing off the public-facing portion of the 
consumer complaint database would not impact the collection of 
that data in any way.
    Senator Cortez Masto. So you have not made a determination 
as you sit here right now whether you are going to take it off 
public view?
    Mr. Mulvaney. No, ma'am.
    Senator Cortez Masto. OK. Let me jump----
    Mr. Mulvaney. But, again, if I were to make that decision, 
that is completely within my discretion under the statute.
    Senator Cortez Masto. So the Bureau has a legal charge to 
protect people from unfair, deceptive, and abusive practices. 
We have talked about that.
    Mr. Mulvaney. Yes, ma'am.
    Senator Cortez Masto. And you have the responsibility to 
make sure financial firms treat similar customers the same. The 
way that you enforce that is by looking at the data, and we 
have talked about that. However, it is my understanding that 
you have stopped banks from sharing information with examiners. 
Is that true?
    Mr. Mulvaney. No, ma'am. I think you may be referring to 
the data freeze that we made. We have changed some of the 
methods by which we collect data for the reasons I mentioned 
before regarding our security. Again, if anyone wants to stick 
around, it would take 2 minutes to talk privately afterwards as 
to why we have done that.
    Senator Cortez Masto. So as we sit here today, what you are 
telling me is that you have not stopped banks from sharing 
information with the examiners?
    Mr. Mulvaney. That is correct.
    Senator Cortez Masto. OK.
    Mr. Mulvaney. What we have tried to do is limit the amount 
of data that we actually take possession of. I will give you an 
example. Instead of having them send it to us electronically, 
we are going to look at it.
    Senator Cortez Masto. OK. I notice my time is up. Thank you 
very much.
    Mr. Mulvaney. Thank you.
    Senator Cortez Masto. And I will submit the rest of my 
questions for the record.
    Thank you.
    Mr. Mulvaney. Yes, ma'am.
    Chairman Crapo. Thank you very much. And Senator Brown 
has----
    Senator Brown. Only one statement. Thank you, Director, for 
being here. I know in response to one of my first questions you 
made the comparison to the first 6 months of Director Cordray, 
and you, of course----
    Mr. Mulvaney. Yes, sir.
    Senator Brown.----know that was as he was setting the 
agency up. So I hope that you will move aggressively----
    Mr. Mulvaney. Actually, the agency was set up by other 
folks----
    Senator Brown. But it was not--but it was still getting up 
and running. It was not--there was not the actions in the 
pipeline that there have been when you took over, so I hope you 
will be a little more aggressive. I will just leave it at that.
    Mr. Mulvaney. Fair enough. Thank you, sir.
    Chairman Crapo. All right. Thank you. I want to thank you, 
Director Mulvaney, for being here with us today and for being 
firm and forthright in your answers and helping work with us. I 
appreciated a lot of your insights and a lot of your 
suggestions. I do think you should expect that the Committee 
will follow up with you in some kind of form.
    Mr. Mulvaney. I would expect nothing less. I used to be on 
one of these committees.
    Chairman Crapo. I am referring specifically to this data 
collection issue. I think we may need to get together further. 
I have to be somewhere in about 2 minutes, and so it will not 
be the 2 minutes after this hearing. But for Senators who wish 
to submit questions for the record, those questions are due on 
Thursday, April 19th, and I encourage you, Acting Director 
Mulvaney, if you received questions, to please respond 
promptly.
    With that, this hearing is adjourned.
    Mr. Mulvaney. Thank you, sir.
    [Whereupon, at 11:58 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
               PREPARED STATEMENT OF CHAIRMAN MIKE CRAPO
    Today, we will hear from CFPB Acting Director Mick Mulvaney on the 
most recent Semi-Annual Report of the Consumer Financial Protection 
Bureau, and the Bureau's activities since his appointment in November 
2017.
    On April 2nd, the CFPB released its Fall 2017 Semi-Annual Report, 
which provides insights on the issues consumers face, and primarily 
focuses on the CFPB's significant work between April and September 
2017, including rulemakings, supervisory actions and enforcement 
actions.
    The CFPB recently announced a series of requests for information on 
various functions, including its rulemaking, supervision, guidance and 
enforcement processes.
    Consumer protection is vital for a properly functioning financial 
market place and is best determined by a robust, quantitative analysis.
    I look forward to learning what feedback the CFPB has received from 
stakeholders with respect to its requests for information, and how 
consumers and the marketplace stand to benefit from changes being 
considered.
    I have long been concerned about the ever increasing amounts of 
``big data'' collected by companies and the Government.
    In 2014, the Government Accountability Office issued a report in 
which it highlighted shortcomings in the CFPB's data collection process 
and privacy controls, and recommended a number of improvements.
    The CFPB's data collection is especially concerning in light of a 
number of high-profile cyberattacks, such as last year's Equifax data 
breach, and recent news about how outside groups have collected private 
information from Facebook users.
    I commend Acting Director Mulvaney for treating these concerns 
seriously by freezing the agency's collection of personal information 
while the agency reviews ways it can improve its data-security program.
    Today, we should discuss how the CFPB's data collection process can 
be narrowed and enhanced to better protect consumers' personal 
information.
    While I am encouraged by today's testimony, the fundamental 
structure of the CFPB needs to be reconsidered to make it more 
transparent and accountable.
    I continue to support a bipartisan commission instead of a single 
director, a Congressional funding mechanism, and a safety and soundness 
check.
    Given the changes taking place at the agency, now is an appropriate 
time to consider the future of the CFPB.
                                 ______
                                 
              PREPARED STATEMENT OF SENATOR SHERROD BROWN
    The reason we are here today is that there was a financial crisis 
10 years ago caused by predatory lenders, and that crisis cost millions 
of Americans their jobs and their homes.
    The St. Louis Fed looked at the subprime mortgages made from 2000 
to 2007, and it found that 70 percent of those loans were refinances. 
That's important--it means that most subprime loans weren't going to 
people who were ``buying too much house,'' these loans were going to 
people that had already paid off some of their debt and built some 
equity.
    Subprime refinance loans allowed shady lenders to steal that equity 
from homeowners with false promises of lower monthly rates under 
confusing payment plans. These loans, designed to steal wealth from 
hardworking families, overwhelmed the banking system and crashed the 
whole economy.
    There was no Consumer Financial Protection Bureau while this was 
happening from 2000 to 2007. There was no dedicated cop on the beat to 
be tough on predatory mortgage lenders or to warn consumers about these 
loans.
    The result was the biggest financial crisis and recession since the 
Great Depression. The lesson from 2008 is simple--if we don't protect 
hardworking Americans from powerful Wall Street banks and financial 
scammers, it can bring down our entire economy.
    That's why we created the Consumer Financial Protection Bureau. Its 
job is clear--to fight for hardworking families against unfair, 
abusive, and deceptive practices, the tricks and traps that some 
financial institutions design in order to line their pockets.
    It's a consumer first agency. Before Mr. Mulvaney's arrival, the 
CFPB got 12 billion dollars in relief for 29 million Americans that had 
been harmed by shady practices.
    Before Mr. Mulvaney arrived, the CFPB was doing its job, initiating 
a handful of enforcement actions every month on behalf of the consumers 
it was created to serve.
    But now Mr. Mulvaney is trying to convince us that protecting 
families and prosecuting shady lenders is, ``pushing the envelope.'' 
That's a lie. Protecting consumers is not ``pushing the envelope,'' 
that's the agency's mission.
    It's a mission that Mr. Mulvaney is completely failing at. The 
number of enforcement actions under his watch? Negative four. Not only 
has the CFPB not initiated a single enforcement action, but it has 
withdrawn lawsuits against four payday lenders that charge consumers 
triple digit interest rates.
    It is Mr. Mulvaney who is pushing the envelope. His appointment at 
the CFPB was only made possible by ignoring the law that created the 
CFPB, which says that the Deputy Director should be in charge of the 
agency.
    Yesterday marked the 50th anniversary of the Fair Housing Act. Mr. 
Mulvaney observed this year's anniversary by moving to weaken the 
office of Fair Lending--the office that focuses on discriminatory 
lending.
    While he claims the agency is under a hiring freeze, he has 
actually created new positions at the Bureau and installed his own 
political appointees. That may seem unsurprising given the change in 
the Administration, but it has no precedent in the short life of the 
CFPB.
    Not only did he replace nonpartisan career staff with his political 
allies, he gave them enormous salaries. In his role at the CFPB, Mr. 
Mulvaney is continuing the war on working families he started at OMB. 
As budget director he worked to slash benefits for Americans making 
$30,000-$40,000 a year, and enact tax cuts that benefit the wealthiest 
Americans while adding trillions of dollars to the debt.
    At the CFPB, he's handing out favors to Wall Street and shady 
lenders. He's lining the pockets of his top four political appointees 
with over $1 million in salaries, but hasn't taken on a single 
enforcement action that would continue the CFPB's good work of putting 
money back in the pockets of consumers harmed by shady lenders and 
financial scammers.
    Shel Silverstein once said ``if you have to dry the dishes, and you 
drop one on the floor, maybe they won't let you dry the dishes 
anymore.'' Mr. Mulvaney seems to be following that advice. He's hoping 
that if he does a bad enough job running the CFPB, Congress will take 
away the CFPB's ability to protect consumers.
    I hope Congress doesn't fall for it. We have seen that the CFPB can 
be a real, positive force for consumers. We all know that the real 
problem is not the CFPB.
                                 ______
                                 
                  PREPARED STATEMENT OF MICK MULVANEY
Mick Mulvaney, Acting Director, Bureau of Consumer Financial Protection
                             April 12, 2018
    Chairman Crapo, Ranking Member Brown, and Members of the Committee, 
I am pleased to present the Bureau of Consumer Financial Protection 
(Bureau) Semi-Annual Report to Congress for the period beginning April 
1, 2017 to September 30, 2017, as well as to provide you an update on 
the activities of the Bureau during my tenure.
    Shortly after President Trump appointed me as Acting Director of 
the Bureau, I announced that the Bureau would continue to execute the 
law but would no longer go beyond its statutory mandate. In enacting 
section 1016(c) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act), Congress enumerated nine elements for 
inclusion in the Bureau's Semi-Annual Reports to Congress:

  1.  A discussion of the significant problems faced by consumers in 
        shopping for or obtaining consumer financial products or 
        services;

  2.  A justification of the budget request of the previous year;

  3.  A list of the significant rules and orders adopted by the Bureau, 
        as well as other significant initiatives conducted by the 
        Bureau, during the preceding year and the plan of the Bureau 
        for rules, orders, or other initiatives to be undertaken during 
        the upcoming period;

  4.  An analysis of complaints about consumer financial products or 
        services that the Bureau has received and collected in its 
        central database on complaints during the preceding year;

  5.  A list, with a brief statement of the issues, of the public 
        supervisory and enforcement actions to which the Bureau was a 
        party during the preceding year;

  6.  The actions taken regarding rules, orders, and supervisory 
        actions with respect to covered persons which are not credit 
        unions or depository institutions;

  7.  An assessment of significant actions by State attorneys general 
        or State regulators relating to Federal consumer financial law;

  8.  An analysis of the efforts of the Bureau to fulfill the fair 
        lending mission of the Bureau; and

  9.  An analysis of the efforts of the Bureau to increase workforce 
        and contracting diversity consistent with the procedures 
        established by the Office of Minority and Women Inclusion.

This Semi-Annual Report meets this mandate.

    Moreover, section 1012(c)(4) of the Dodd-Frank Act contemplates 
that the Director will submit independent legislative recommendations 
to Congress. It is appropriate to include legislative recommendations 
in this Semi-Annual Report, because doing so will afford Members of 
Congress a timely opportunity to discuss my recommendations in the 
hearing.
    Undoubtedly, many Members of Congress disagree with my actions as 
the Acting Director of the Bureau, just as many Members disagreed with 
the actions of my predecessor. Such continued frustration with the 
Bureau's lack of accountability to any representative branch of 
Government should be a warning sign that a lapse in democratic 
structure and republican principles has occurred. This cycle will 
repeat ad infinitum unless Congress acts to make the Bureau accountable 
to the American people.
    Accordingly, I request that Congress make four legislative changes 
to the law in order to establish meaningful accountability for the 
Bureau:\1\
---------------------------------------------------------------------------
    \1\ Other than the Bureau's Acting Director, no other officer or 
agency of the United States approved these legislative recommendations 
prior to submission to Congress. The views contained herein are those 
of the Acting Director and do not necessarily reflect the views of the 
Board of Governors of the Federal Reserve System or the President of 
the United States.

---------------------------------------------------------------------------
  1.  Fund the Bureau through Congressional appropriations;

  2.  Require affirmative legislative approval of major Bureau rules;

  3.  Ensure that the Director answers to the President in the exercise 
        of executive authority; and

  4.  Create an independent Inspector General for the Bureau.

You also requested that I discuss the activities of the Bureau during 
my tenure, and I am prepared to explain the Bureau's new strategic 
priorities and new approach.
Semi-Annual Report requirements
    The first section of the Bureau's Semi-Annual Report to Congress is 
a discussion of the significant problems faced by consumers in shopping 
for or obtaining consumer financial products or services. In this 
section of the report, the Bureau discusses ``credit invisibles,'' 
consumers who lack a credit record at one of the nationwide credit 
reporting companies. In June 2017, the Bureau released the Data Point: 
Becoming Credit Invisible,\2\ which explores the means by which 
consumers transitioned out of credit invisibility. The Semi-Annual 
Report also discusses the Bureau's mandate to provide consumers with 
financial education and the Bureau's 2017 financial literacy annual 
report.\3\
---------------------------------------------------------------------------
    \2\ https://www.consumerfinance.gov/documents/4822/
BecomingCreditVisible_Data_Point
_Final.pdf.
    \3\ https://www.consumerfinance.gov/documents/5810/cfpb_financial-
literacy-annual-report-2017.pdf.
---------------------------------------------------------------------------
    The second section of the Semi-Annual Report is a justification of 
the Bureau's budget request of the previous year. The Bureau's FY 2017 
Strategic Plan, Budget, and Performance Plan and Report includes 
estimates of the resources needed for the Bureau to carry out its 
mission. The justification of the FY 2017 budget request is on the 
Bureau's website at https://www.consumerfinance.gov/about-us/budget-
strategy/budget-and-performance/.
    The third section of the Semi-Annual Report lists the significant 
rules and orders adopted by the Bureau, as well as other significant 
initiatives conducted by the Bureau, during the preceding year and the 
plan of the Bureau for rules, orders, or other initiatives to be 
undertaken during the upcoming period. The Bureau's significant final 
rules during the term of this report are the final rule on arbitration 
agreements (which will not go into effect because Congress adopted a 
joint resolution of disapproval, which the President signed pursuant to 
the Congressional Review Act) and the final rule on Payday, Vehicle 
Title, and Certain High-Cost Installment Loans. The Bureau's 
significant initiatives include requests for information on assessments 
of significant rules under section 1022(d) of the Dodd-Frank Act, which 
include 2013 Real Estate Settlement Procedures Act Servicing Rule 
Assessment; Remittance Rule Assessment; and Ability-to-Repay/Qualified 
Mortgage Rule Assessment. On September 14, 2017, Bureau staff also 
issued its first no-action letter to Upstart Network. Additionally, the 
Bureau's plan for upcoming initiatives lays out a series of Calls for 
Evidence about various aspects of the Bureau's work. This section of 
the Semi-Annual Report also lists out the Bureau's plans for upcoming 
proposed rules: Payday, Vehicle Title, and Certain High-Cost 
Installment Loans rule; the Expedited Funds Availability Act rule; the 
Debt Collection rule; and Home Mortgage Disclosure Act rule, as well as 
upcoming final rules: Gramm-Leach-Bliley Act Privacy Notice rule; 
Amendments Relating to Disclosure of Records and Information rule; and 
the Amendment to the Federal Mortgage Disclosure Requirements under the 
Truth in Lending Act rule. The Semi-Annual Report contains additional 
details on these and other Bureau initiatives.
    The fourth section of the Semi-Annual Report provides an analysis 
of complaints about consumer financial products or services that the 
Bureau has received and collected in its central database on complaints 
during the preceding year. During the period October 1, 2016 through 
September 30, 2017, the Bureau handled approximately 317,200 consumer 
complaints. Most of those complaints were submitted through the 
Bureau's website. The Bureau does not verify all the facts alleged in 
complaints, but it takes steps to confirm a commercial relationship 
between the consumer and the company. Approximately 235,400 (or 74 
percent) of all complaints handled were sent by the Bureau to companies 
for review and response. Companies have responded to approximately 93 
percent of complaints sent to them for response during the period. 
Consumers did not receive a timely response from the company in only 3 
percent of complaints. The top four complaints by the product category 
designated by the consumer when submitting the complaint are debt 
collection (27 percent), credit or consumer reporting (27 percent), 
mortgages (13 percent), and credit cards (9 percent).
    As required by the Dodd-Frank Act, the fifth section of the Semi-
Annual Report discusses the public supervisory and enforcement actions 
to which the Bureau was a party during the preceding year. The Bureau's 
supervisory activities with respect to individual institutions are 
nonpublic. The Bureau has, however, issued numerous supervisory 
guidance documents and bulletins during the preceding year. These 
documents are listed under section 3.3 of this report as ``issued 
guidance documents undertaken within the preceding year.'' With regard 
to enforcement actions, the Bureau was a party in 53 public enforcement 
actions from October 1, 2016 through September 30, 2017. The detailed 
list of those actions, with a brief statement of the issues, is set out 
in section 5.2 of the Semi-Annual Report. Section 5.2 also identifies 
those actions involving Office of Administrative Adjudication Orders 
with respect to covered persons that are not credit unions or 
depository institutions.
    The sixth section of the Semi-Annual Report addresses actions taken 
regarding rules, orders, and supervisory actions with respect to 
covered persons that are not credit unions or depository institutions. 
The Bureau's Supervisory Highlights publications provide general 
information about the Bureau's supervisory activities at banks and 
nonbanks without identifying specific companies. The Bureau published 
four issues of Supervisory Highlights between October 1, 2016 and 
September 30, 2017. As noted in the previous paragraph, all public 
enforcement actions are list in section 5.2 of the Semi-Annual Report. 
The brief statement of issues identifies those actions taken with 
respect to covered persons that are not credit unions or deposit 
institutions.
    The seventh section of the Semi-Annual Report requires an 
assessment of significant actions by State attorneys general or State 
regulators relating to Federal consumer financial law. For purposes of 
the section 1016(c)(7) reporting requirement, the Bureau determines 
that any actions asserting claims pursuant to section 1042 of the Dodd-
Frank Act are ``significant.'' The Bureau is aware of two State 
Attorney General actions that were initiated during the reporting 
period and that asserted Dodd-Frank Act claims. The actions are listed 
in the Semi-Annual Report.
    The eighth section of the Semi-Annual Report provides an analysis 
of the efforts of the Bureau to fulfill the fair lending mission of the 
Bureau. This update is focused on highlights from the Bureau's fair 
lending enforcement \4\ and rulemaking \5\ activities from October 1, 
2016 through September 30, 2017, and continued efforts to fulfill the 
fair lending mission of the Bureau, through supervision, interagency 
coordination, and outreach from April 1, 2017 through September 30, 
2017.\6\ The Bureau's Fair Lending Supervision program assesses 
compliance with Federal fair lending consumer financial laws and 
regulations at banks and nonbanks over which the Bureau has supervisory 
authority. As a result of the Bureau's efforts to fulfill its fair 
lending mission in this reporting period, the Bureau's Fair Lending 
Supervision program initiated 11 supervisory events at financial 
services institutions under the Bureau's jurisdiction to determine 
compliance with Federal laws intended to ensure the fair, equitable, 
and nondiscriminatory access to credit for both individuals and 
communities, including the Equal Credit Opportunity Act (ECOA) and the 
Home Mortgage Disclosure Act (HMDA). Over the past year, the Bureau 
announced two fair lending public enforcement actions involving HMDA 
reporting and credit cards. First, as described in section 5 of this 
report, on March 15, 2017, the Bureau resolved an enforcement action 
against a national mortgage originator for violating HMDA by 
consistently failing to report accurate data about mortgage 
transactions for 2012 through 2014. Second, as described in section 5 
of this report, on August 23, 2017, the Bureau took action against a 
credit card company, for violating ECOA by discriminating against 
consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. 
territories by providing them with credit and charge card terms that 
were inferior to those available in the 50 United States.
---------------------------------------------------------------------------
    \4\ Dodd-Frank Act section 1016(c)(5).
    \5\ Dodd-Frank Act section 1016(c)(3).
    \6\ Dodd-Frank Act section 1016(c)(8).
---------------------------------------------------------------------------
    The ninth, and final, section of the Semi-Annual Report provides an 
analysis of the efforts of the Bureau to increase workforce and 
contracting diversity consistent with the procedures established by the 
Office of Minority and Women Inclusion (OMWI). The Bureau has developed 
an agency-wide strategic plan--Diversity Strategic Plan--to guide the 
Bureau in its efforts to manage its diversity and inclusion goals and 
objectives.\7\ The Bureau also publishes an Annual OMWI report in the 
spring of each year. The 2017 OMWI Annual report was published on March 
29, 2018.\8\ Additionally, during FY 2017,\9\ the Bureau awarded 30 
percent of contract dollars to small businesses enterprises (SBEs), 
some of which are also minority-owned or woman-owned businesses 
(MWOBs). The Bureau's contracting rate to small businesses exceeds the 
Small Business Administration's recommended goal for each Federal 
agency of 23 percent. Of the 30 percent of SBE contracts awarded at the 
Bureau in FY 2017, 10 percent went to small disadvantaged businesses 
(minority-owned). The total contract dollars awarded to woman-owned 
small businesses
during this period was 11.9 percent. In accordance with the mandates in 
section 342(c)(2) of the Dodd-Frank Act, goal six of the Bureau's 
Diversity and Inclusion Strategic Plan describes the efforts the Bureau 
takes to determine that a contractor will ensure, to the maximum extent 
possible, the fair inclusion of women and minorities in the contractor 
workforce, and, as applicable, subcontractors workforce. This concludes 
the overview of the Bureau's Fall 2017 Semi-Annual Report to Congress.
---------------------------------------------------------------------------
    \7\ https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/
201611_cfpb_diversity-and-inclusion-strategic-plan-2016-2020.pdf.
    \8\ https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/
201703_cfpb_OMWI-2017-annual-report.pdf.
    \9\ Data source is from the Federal Procurement Data System (FPDS) 
for FY 2017 from October 1, 2016 through September 30, 2017. The data 
are current as of October 4, 2017. FPDS data is subject to an OMB 
annual validation each January for the previous fiscal year.
---------------------------------------------------------------------------
New strategic priorities
    As noted above, you have also requested that I discuss the 
activities of the Bureau during my tenure. I will begin by outlining 
the Bureau's new strategic priorities, and then I will provide an 
overview of the new approach I have taken in leading the Bureau.
    The Bureau's new strategic priorities are to recognize free markets 
and consumer choice and to take a prudent, consistent, and humble 
approach to enforcing the law. This reflects my understanding that 
consumers and creditors alike gain from mutual exchange, provided that 
promises are kept, terms are clearly disclosed, and property rights are 
protected.
    As an officer in the executive branch, I am sworn to execute the 
law, and that is what I am doing. That is all I should be doing. My job 
is to make sure the Bureau is acting consistently with our statutory 
responsibilities, to improve our daily operations and our interactions 
with consumers and industry, and to ensure we are accountable to the 
American people.
    Our recently published Strategic Plan outlines how I intend to 
fulfill the Bureau's statutory duties. Specifically, the Bureau's 
mission statement is ``to regulate the offering and provision of 
consumer financial products or services under the Federal consumer 
financial laws and to educate and empower consumers to make better 
informed financial decisions.'' That is what Congress created us to do.
    And that is what we will do. We will adhere to the Bureau's 
statutory responsibilities. Our job is to enforce Federal consumer 
financial laws, and our focus will be on carrying out only those 
activities Congress explicitly wrote into law.
New approach
    The Bureau is going about its work in several new ways. First, to 
execute the new mission, the Bureau will continue to seek the counsel 
of others and make decisions only after weighing relevant available 
evidence and a full range of perspectives. Second, the Bureau will 
protect the legal rights of all, equally. And third, we will do what is 
right with confidence, acting with humility and moderation.
    That is why we launched the Call for Evidence--an initiative aimed 
at gathering public feedback on the wide range of work done by this 
agency. It is important to learn more about what is working and what 
needs to improve in the work done by the Bureau. An agency that is 
confident in its mission should care about getting it right. An agency 
should welcome constructive feedback and then learn from it.
    We are actively seeking this feedback. To date, the Bureau had 
issued 11 requests for information--RFIs. We are seeking public comment 
on the Bureau's Civil Investigative Demands, administrative 
adjudications, enforcement processes, supervision processes, complaint 
reporting, external engagement strategies, our rulemaking process, 
rules issued by the Bureau, and rules the Bureau inherited. Most 
recently, we issued RFIs on guidance and implementation support and 
consumer education. Later this week, we will issue an RFI on consumer 
complaints and inquiries. We have extended all of the comment periods 
to 90 days to give everyone more time to provide us with feedback. I 
encourage any interested parties to submit comments. Your comments will 
help the Bureau evaluate what we do and how we do it and determine 
whether changes are warranted.
    Another area where we are doing things differently is executing the 
Bureau's regulatory agenda. First, regulatory agencies like the Bureau 
are not legislatures. The Bureau has very broad rulemaking authority to 
regulate consumer financial products and services. We must be very 
judicious in the use of this power.
    Second, we are committed to making sure the Bureau's regulations 
work not only for those who use consumer financial products and 
services but also for those who provide them. This means clear rules 
that, where appropriate, can be tailored to the business models of the 
companies subject to these rules. For instance, the Bureau is here to 
help protect people who use credit, but we're also here to establish 
clear guidelines for those who provide that credit because it is an 
important service for consumers and central to our capitalist system.
    Additionally, under my leadership the Bureau will implement a more 
robust quantitative analysis of potential costs and benefits to 
consumers and those we regulate.
    We are also opening up the rulemaking process to reconsider 
elements that may create unnecessary burden or restrict consumer 
choice. Specifically, the Bureau recently issued statements about 
revisiting the regulation issued under the Home Mortgage Disclosure Act 
and the ``Payday, Vehicle Title, and Certain High-Cost Installment 
Loans'' rule.
    Regarding HMDA, the Bureau intends to open a rulemaking to 
reconsider various aspects of the 2015 HMDA rule, such as reporting 
thresholds and transactional
coverage and reconsider data points not mandated by the Dodd-Frank Act.
Furthermore, we have announced, with our partners at the Office of 
Comptroller of the Currency, the Board of Governors of the Federal 
Reserve System, and the Federal Deposit Insurance Corporation, that our 
supervisory examinations of 2018 HMDA data will be diagnostic. Our goal 
is to help companies identify any weaknesses, and we will credit good-
faith efforts to comply. Financial institutions that submit HMDA data 
are doing so through the Bureau's new online platform, which allows an 
institution to upload loan application registers, review edits, certify 
data, and submit data for the filing year without the manual processes 
required previously. Over 5,800 institutions have submitted their 2017 
data using the new platform.
    We are not pre-judging the outcome of any rulemaking; instead, I 
share our recent efforts with you to demonstrate that under new 
leadership the Bureau is willing to revisit existing rules to find ways 
to ease undue burdens and protect consumer choice. This we will do 
efficiently, effectively, and transparently. We will structure 
ourselves and conduct Bureau operations in a way that reduces 
redundancy and makes the best use of resources.
    Above all, the Bureau must be efficient. That means I will organize 
the agency and conduct its operations in ways that reduce redundancy 
and make the most of our resources. For example, the Office of Fair 
Lending and Equal Opportunity is being moved to the Director's Office, 
to become part of the Office of Equal Opportunity and Fairness. The 
Office of Fair Lending will continue to focus on advocacy, 
coordination, and education.
    The Bureau will continue to enforce fair lending laws. The current 
fair lending supervision and enforcement functions will remain in the 
soon-to-be-renamed
Division of Supervision, Enforcement, and Fair Lending. Accordingly, 
the Bureau will have one office, not two, that handles enforcement 
matters. It will have one office, not two, that handle supervision 
policy, and one office, not two, that handle supervision examinations. 
This will make enforcement and supervision more efficient, effective, 
and accountable.
    In another change, the Bureau practice of ``regulation by 
enforcement'' has ceased. The Bureau will continue to enforce the law. 
That is our job, and we take it seriously. However, people will know 
what the rules are before the Bureau accuses them of breaking those 
rules.
    Through the changes I have discussed and others, I am making sure 
the Bureau is operating within its statutory mandate, is accountable 
for its actions, and is doing the American people's business in ways 
that are efficient and effective.
    The best that any Bureau Director can do on his own is to fulfill 
his responsibilities with humility and prudence and to temper his 
decisions with the knowledge that the power he wields could all too 
easily be used to harm consumers, destroy businesses, or arbitrarily 
remake American financial markets. But all human beings are imperfect, 
and history shows that the temptation of power is strong. Our laws 
should be written to restrain that human weakness, not empower it.
    Thank you again for the opportunity to present the Bureau of 
Consumer Financial Protection's Semi-Annual Report to Congress for the 
period beginning April 1, 2017 to September 30, 2017, as well as to 
provide you an update on the activities of the Bureau during my tenure. 
I would be happy to answer any of your questions about the Bureau's 
work.

 RESPONSES TO WRITTEN QUESTIONS OF SENATORS BROWN, WARNER, VAN 
       HOLLEN, CORTEZ MASTO, AND JONES FROM MICK MULVANEY

Q.1. We would like clarity on the CFPB's enforcement trends 
since you assumed leadership:

Q.1.a. How many CFPB investigations were ongoing as of November 
24, 2017?

Q.1.b. How many CFPB investigations were ongoing as of April 
19, 2018?

Q.1.c. How many new CFPB investigations were initiated from 
November 25, 2017 to April 19, 2018?

A.1.a.-c. As I noted at the hearing, the Bureau of Consumer 
Financial Protection (Bureau) had roughly 100 ongoing 
investigations as of April 19, 2018. The Bureau does not 
generally comment publicly on confidential enforcement 
investigations.

Q.2. In January, you announced that the CFPB would reconsider 
its 2017 payday loan rule and delay the compliance date for the 
rule's main requirements. You have claimed that you plan to 
undertake a great deal more cost-benefit analysis at the CFPB.
    Did you undertake any cost-benefit analysis in connection 
with the decision to revisit the payday loan rule and delay the 
compliance date for the rule's main requirements? If so, please 
provide a copy of that analysis to the Committee.

A.2. I note that this question is similar to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member.
    If I decide that the Bureau should propose revisions to the 
rule, the Bureau will follow the procedures set forth in the 
Administrative Procedure Act and the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act), including 
analyzing the costs and benefits of the proposal to consumers 
and to covered institutions. It would have been premature to 
conduct such an analysis before decisions are made as to what 
changes, if any, to propose to the rule. The January 16, 2018, 
statement did not delay the compliance date by which lenders 
would have to begin complying with most provisions of the rule.

Q.3. In a speech to State attorneys general in February, you 
implied that the CFPB would step back if State authorities 
``don't think it's against the law'' or ``don't think it's your 
State's best interest.'' This was in the context of a case 
against four payday lenders accused of charging triple-digit 
interest rates in violation of State and Federal law. You noted 
that some State attorneys general opposed the case. But what 
you didn't mention was the fact that this case charged the 
lenders with making illegal loans in 15 different States, with 
varying policies on payday lending.
    Did the State attorneys general of any States other than 
New Mexico and Oklahoma express an opinion on the case? If so, 
please provide copies of any written correspondence.

A.3. The Oklahoma Attorney General and the New Mexico Attorney 
General filed amicus briefs on the question of whether State 
and Tribes are considered ``persons'' against whom the Bureau 
may bring civil actions under 12 U.S.C.  5564(a). The briefs 
did not comment on payday lending, interest rates, or where the 
loans in question were made. Though it must be noted that New 
Mexico filed an amicus brief in support of defendants even 
though it was a ``subject State'' whose laws might have deemed 
void ab initio the loans at issue in that litigation. No other 
State attorney general filed an amicus brief in this case.

Q.4. According to the CFPB's complaint, Connecticut and New 
York State authorities sent cease-and-desist letters to some of 
the lenders telling them the loans were illegal.

Q.4.a. Did you reach out to those States to solicit their 
opinion? If so, why does it seem that you take the advice of 
the States you agree with and dismiss the advice of those you 
disagree with?

A.4.a. No.

Q.4.b. What is the statutory authority for making the opinions 
of some State authorities determinative in CFPB's decision to 
pursue an enforcement action to protect consumers in other 
States?

A.4.b. It is incorrect to assert that the opinions of some 
State attorneys general are ``determinative'' of decisions made 
by the Bureau. Rather, as I have explained in my public 
remarks, the Bureau will weigh those opinions in making many 
decisions, including whether to pursue any given enforcement 
action.

Q.4.c. If you choose not to bring an enforcement action because 
certain State authorities recommend against it, how is that 
consistent with CFPB's role as a Federal regulatory agency to 
enforce Federal law?

A.4.c. The Bureau independently enforces Federal consumer 
financial law as defined in the Dodd-Frank Act. That fact does 
not mean that the Bureau cannot consider the perspectives of 
State attorneys general when making decisions about whether and 
how to enforce Federal consumer financial law.

Q.4.d. Did you undertake any cost-benefit analysis in 
connection with the decision to drop this case? If so, please 
provide a copy of that analysis to the Committee.

A.4.d. The Bureau considers a number of factors when deciding 
whether to bring or continue with an enforcement action. 
Although the Dodd-Frank Act generally requires the Bureau to 
consider benefits and costs to consumers and providers of 
consumer financial products or services when promulgating a 
rule, it does not require the Bureau to conduct such an 
analysis before exercising its enforcement discretion.

Q.5. In 2011, the CFPB entered an agreement with State 
attorneys general to support each other in enforcing consumer 
protection laws, including through ``joint or coordinated 
investigations of wrongdoing and coordinated enforcement 
actions.'' State attorneys general from coast to coast have 
said they've appreciated the CFPB's partnership in the past. 
However, Virginia Attorney General Mark Herring recently said 
that you're now dropping cases that were previously approved. 
In light of these comments, we are concerned that you have 
abandoned the CFPB's previous agreement to support State 
efforts to protect consumers.

Q.5.a. How many CFPB investigations or lawsuits in which the 
CFPB worked with State authorities were ongoing as of November 
24, 2017?

Q.5.b. How many CFPB investigations or lawsuits in which the 
CFPB worked with State authorities were ongoing as of April 19, 
2018?

A.5.a.-b. Four publicly filed lawsuits in partnership with 
State authorities were ongoing as of November 24, 2017. The 
number and type of nonpublic enforcement investigations are 
confidential to protect the integrity of the investigation. The 
Bureau continues to value its partnerships with State 
regulators and attorneys general. As I stated to a group of 
attorneys general at the National Association of Attorneys 
General Winter Meeting, under my leadership they can expect to 
see even more collaboration from the Bureau. The Bureau will 
also be making a greater effort to seek input from State 
regulators and the attorneys general before the Bureau 
exercises its enforcement authority.

Q.5.c. How many new CFPB investigations or lawsuits in which 
the CFPB worked with State authorities were initiated from 
November 25, 2017 to April 19, 2018?

A.5.c. No new lawsuits in partnership with State authorities 
were initiated from November 25, 2017 to April 19, 2018. The 
Bureau does not generally comment publicly on confidential 
enforcement investigations.

Q.5.d. Since November 25, 2017, have you or CFPB staff denied 
any requests by State authorities for the CFPB to join or 
support an investigation or lawsuit?

A.5.d. As a matter of policy, the Bureau does not comment on 
nonpublic enforcement matters. As noted in my previous 
response, under my leadership State law enforcement partners 
can expect to see even more collaboration from the Bureau. The 
Bureau will also be making a greater effort to seek input from 
State regulators and attorneys general before exercising its 
enforcement authority.

Q.5.e. Is the Virginia Attorney General correct, and if so, 
which cases or investigations have been dropped? If so, did you 
undertake a cost-benefit analysis before coming to a decision 
to drop those cases? Please provide a copy of an analysis to 
the Committee.

A.5.e. No public enforcement matters were brought in 
conjunction with a State regulator. The Bureau does not 
generally comment publicly on confidential enforcement 
investigations.

Q.5.f. Do you continue to adhere to the CFPB's 2011 agreement 
with State attorneys general? If there have been any changes to 
the CFPB's approach to working with State authorities, did you 
personally approve these changes?

A.5.f. In 2011, the Bureau and the National Association of 
Attorneys General Presidential Initiative Working Group adopted 
a joint statement of principles to, where appropriate and to 
the greatest possible extent:

   LDevelop joint training programs and share 
        information about developments in Federal consumer 
        financial law and State consumer protection laws that 
        apply to consumer financial products or services;

   LShare information, data, and analysis about conduct 
        and practices in the markets for consumer financial 
        products or services to inform enforcement policies and 
        priorities;

   LEngage in regular consultation to identify mutual 
        enforcement priorities that will ensure effective and 
        consistent enforcement of the laws that protect 
        consumers of financial products or services;

   LSupport each other, to the fullest extent permitted 
        by law as warranted by the circumstances, in the 
        enforcement of the laws that protect consumers of 
        financial products or services, including by joint or 
        coordinated investigations of wrongdoing and 
        coordinated enforcement actions;

   LPursue legal remedies to foster transparency, 
        competition, and fairness in the markets for consumer 
        financial products or services across State lines and 
        without regard to corporate forms or charter choice for 
        those providers who compete directly with one another 
        in the same markets;

   LDevelop a consistent and enduring framework to 
        share investigatory information and to coordinate 
        enforcement activities to the extent practicable and 
        consistent with governing law;

   LShare, refer, and route complaints and consumer 
        complaint information between the Consumer Bureau and 
        the State attorneys general;

   LAnalyze and leverage the input they receive from 
        consumers and the public in order to advance their 
        mutual goal of protecting consumers of financial 
        products or services; and

   LCreate and support technologies to enable data 
        sharing and procedures that will support complaint 
        cooperation.

The Bureau continues to be guided by these principles in its 
work with State attorneys general.

Q.5.g. If there have been any changes to the CFPB's approach to 
working with State authorities, did you undertake a cost-
benefit analysis in connection with those changes? If so, 
please provide a copy of that analysis to the Committee.

A.5.g. See above.

Q.6.a. We have a number of questions related to the 
reorganization of the Office of Fair Lending and Equal 
Opportunity (OFLEO):
    Did the CFPB perform a legal analysis to determine whether 
stripping the OFLEO of its enforcement authority would hinder 
the CFPB's ability to carry out its statutory mandate to 
provide oversight and enforcement of Federal fair lending laws?

A.6.a. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Elizabeth Warren (MA) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs (BHUA), regarding the Bureau's semiannual report. 
For that reason, I am providing you the same response I will 
provide to the Senator.
    Under the Dodd-Frank Act, the Office of Fair Lending and 
Equal Opportunity (OFLEO) ``shall have such powers and duties 
as the Director may delegate to the Office.''
    I have been working to ensure that the Bureau's operations 
are conducted in a way that best enables the Bureau to fulfill 
all of the Bureau's statutory requirements while reducing 
redundancy and maximizing efficiency. Changes to the structure 
and operations of OFLEO are being implemented in furtherance of 
these priorities. The existing OFLEO performs different 
functions, including oversight and enforcement of fair lending 
laws on one hand, and promotion of fair lending compliance and 
education on the other.
    The reorganization will separate the supervision and 
enforcement functions previously performed by OFLEO from its 
promotion and education functions. The supervision and 
enforcement functions will remain in the division that is 
responsible for supervision and enforcement generally. OFLEO's 
remaining functions will be elevated to the Director's Office 
to become part of an Office of Equal Opportunity and Fairness 
with a focus on advocacy and education, coordination, and 
reporting.
    The changes are designed to create efficiency and 
consistency in the Bureau's supervision and enforcement 
functions, and allow OFLEO to focus on promoting advocacy and 
education, coordination, and reporting. These changes should 
improve the Bureau's operations and our interactions with 
consumers and industry, in fulfillment of our mission, and in 
full compliance with the Bureau's statutory mandate.

Q.6.b. How will bringing the OFLEO under the control of the 
Office of the Director modify the Bureau's decisionmaking 
process with regard to enforcement and other actions to protect 
consumers from unfair discrimination?

Q.6.c. What, if any, continuing role will the OFLEO play in 
supporting the Bureau's enforcement of fair lending laws?

A.6.b.-c. I note that these questions are identical to 
questions I received from Ranking Member Maxine Waters (CA) 
following my testimony before the House Committee on Financial 
Services, regarding the Bureau's Semi-Annual Report. For that 
reason, I am providing you the same response I provided the 
Ranking Member. Additionally, these questions are identical to 
questions I received from Senator Elizabeth Warren (MA) 
following my testimony before the Senate Committee on Banking, 
Housing, and Urban Affairs, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
will provide to the Senator.
    The reorganization will not hamper the Bureau's fair 
lending enforcement and supervisory activity; indeed, the 
reorganization should help the Bureau operate more efficiently 
and effectively. In consultation with Bureau stakeholders and 
the National Treasury Employees Union (NTEU) and in accordance 
with the Bureau's collective bargaining agreement, the Bureau 
and NTEU have signed a memorandum of understanding (MOU) on the 
implementation plan for the reorganization. Full implementation 
of the reorganization is expected to take a few more months to 
complete. While the Bureau works through the processes required 
to fully implement such a change, OFLEO will continue to 
operate as it has previously.
    The reorganization of OFLEO will elevate OFLEO to the 
Director's Office to become part of the Office of Equal 
Opportunity and Fairness. OFLEO will continue to support the 
enforcement of fair lending laws through the use of advocacy 
and education, coordination, and reporting.

Q.6.d. How will the reorganization affect the reporting duties 
for OFLEO employees, including the OFLEO Assistant Director?

A.6.d. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Elizabeth Warren (MA) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Senator.
    In consultation with Bureau stakeholders and the NTEU, and 
in accordance with the Bureau's collective bargaining 
agreement, the Bureau and NTEU have signed a MOU on the 
implementation plan for the reorganization. While staff will 
not experience changes in employment status, employees may 
experience changes in jobs and duties. Some OFLEO employees 
will remain in the OFLEO while others will take positions 
throughout the Supervision and Enforcement Division. The OFLEO 
Assistant Director's duties will change insofar as the role 
will focus on advocacy and education, coordination, and 
reporting. We are working diligently to effect these changes 
while minimizing disruption to operations and employees.

Q.6.e. After the reorganization, which officials in the Office 
of the Director will be consulted about OFLEO activities?

Q.6.f. Which of these officials have been hired, politically 
appointed, or detailed to the CFPB since November 24, 2017?

Q.6.g. After the reorganization, which political appointees and 
temporarily detailed employees will be granted veto power over 
OFLEO activities and decisions?

Q.6.h. What criteria will political appointees and temporarily 
detailed employees in the Office of the Director use to 
determine whether the Bureau will follow the recommendations of 
career policy experts in the OFLEO?

Q.6.i. What actions will the Bureau take to ensure that OFLEO 
decisions continue to be based on the best advice of 
independent, expert, career policy staff?

A.6.e.-i. I note that these questions are identical or 
substantially similar to questions I received from Ranking 
Member Maxine Waters (CA) following my testimony before the 
House Committee on Financial Services, regarding the Bureau's 
Semi-Annual Report. For that reason, I am providing you the 
same response I provided the Ranking Member. Additionally, 
these questions are identical or substantially similar to 
questions I received from Senator Elizabeth Warren (MA) 
following my testimony before the Senate Committee on Banking, 
Housing, and Urban Affairs, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
will provide to the Senator.
    In consultation with Bureau stakeholders and the NTEU and 
in accordance with the Bureau's collective bargaining 
agreement, the Bureau and NTEU have signed a MOU on the 
implementation plan for the reorganization. Full implementation 
of the reorganization is expected to take a few more months to 
complete. While the Bureau works through the processes required 
to fully implement such a change, OFLEO will continue to 
operate as it has previously.

Q.6.j. How will new requirements that the OFLEO report to the 
Office of the Director enhance the CFPB's ability to protect 
consumers from unfair discrimination?

A.6.j. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Elizabeth Warren (MA) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Senator.
    The Bureau intends to continue fulfilling its statutory 
obligation to enforce Federal consumer financial laws, which 
include the Equal Credit Opportunity Act (ECOA) and the Home 
Mortgage Disclosure Act (HMDA). The reorganization should 
improve the
Bureau's operations and our interactions with consumers and 
industry, in fulfillment of our mission, and in full compliance 
with the Bureau's statutory mandate. The Bureau's supervision 
and enforcement of fair lending laws will continue 
uninterrupted in the
existing supervision and enforcement divisions. This will allow 
remaining OFLEO personnel to focus on education, outreach, and 
compliance efforts. OFLEO's previous organizational structure 
placed primary emphasis on ``back-end'' supervision and 
enforcement of fair lending laws, resulting in a focus on 
corrective measures, rather than ``front-end'' promotion of 
education, and coordination of, fair lending efforts.

Q.6.k. Please describe any independent analyses, such as third-
party studies, that informed the decision to bring the OFLEO 
under the Office of the Director and strip OFLEO of its 
enforcement and supervisory authority.

A.6.k. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Elizabeth Warren (MA) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Senator.
    Under the Dodd-Frank Act, the OFLEO ``shall have such 
powers and duties as the Director may delegate to the Office.'' 
I have been working to ensure that the Bureau's operations are 
conducted in a way that best enables the Bureau to fulfill all 
of the Bureau's statutory requirements while reducing 
redundancy and maximizing efficiency. Changes to the structure 
and operations of OFLEO are being implemented in furtherance of 
these priorities.

Q.6.l. Did you or any other CFPB employee consult with or 
discuss this reorganization with any outside entities--
including lobbyists or representatives of the banking or 
financial services industry--prior to announcing the 
reorganization?

A.6.l. I note that this question is identical or substantially 
similar to a question I received from Ranking Member Maxine 
Waters (CA) following my testimony before the House Committee 
on Financial Services, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
provided the Ranking Member. Additionally, this question is 
identical or substantially similar to a question I received 
from Senator Elizabeth Warren (MA) following my testimony 
before the Senate Committee on Banking, Housing, and Urban 
Affairs, regarding the Bureau's Semi-Annual Report. For that 
reason, I am providing you the same response I will provide to 
the Senator.
    No, I did not consult, nor am I aware of any Bureau 
employee discussing, the reorganization outside of the Bureau.

Q.6.m. Did you consult with other officials, employees, or 
political appointees at OMB or the White House about the OFLEO 
reorganization prior to its announcement?

A.6.m. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Elizabeth Warren (MA) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Senator.
    Office of Management and Budget (OMB) detailees to the 
Bureau were, as a matter of course, part of the discussion, but 
no other employees at OMB or the White House were consulted.

Q.6.n. Is the CFPB considering any substantive changes to its 
approach to the enforcement of fair lending laws, including 
changes to the CFPB's interpretation of these laws?

A.6.n. I note that this question is identical or substantially 
similar to a question I received from Ranking Member Maxine 
Waters (CA) following my testimony before the House Committee 
on Financial Services, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
provided the Ranking Member. Additionally, this question is 
identical or substantially similar to a question I received 
from Senator Elizabeth Warren (MA) following my testimony 
before the Senate Committee on Banking, Housing, and Urban 
Affairs, regarding the Bureau's Semi-Annual Report. For that 
reason, I am providing you the same response I will provide to 
the Senator.
    The Bureau intends to continue fulfilling its statutory 
obligation to enforce Federal consumer financial laws, which 
include the Equal Credit Opportunity Act (ECOA) and the Home 
Mortgage Disclosure Act (HMDA). As you may be aware, the Bureau 
issued a statement on the passage of the Congressional Review 
Act resolution disapproving a bulletin titled ``Indirect Auto 
Lending and Compliance with the Equal Credit Opportunity Act,'' 
which had provided guidance about the ECOA and its implementing 
regulation, Regulation B. Consistent with the joint resolution, 
the guidance has no force or effect. The ECOA and Regulation B 
are unchanged and remain in force and effect. As I noted in 
that statement, I want to make it abundantly clear that the 
Bureau will continue to fight unlawful discrimination at every 
turn. We will vigorously enforce fair lending laws in our 
jurisdiction, and will stand on guard against unlawful 
discrimination in credit. However, given this recent 
Congressional action, the Bureau will be reexamining the 
requirements of ECOA in light of relevant Supreme Court 
precedents.
    In addition, on August 31, 2018, the Bureau issued an 
interpretive and procedural rule \1\ to implement and clarify 
the requirements of section 104(a) of the Economic Growth, 
Regulatory Relief, and Consumer Protection Act (the Act), which 
amended the HMDA. The Bureau also released updates to the 
Filing Instructions Guide (FIG) for HMDA data collected in 2018 
to incorporate the Act as implemented and clarified by the rule 
issued that day.
---------------------------------------------------------------------------
    \1\ https://files.consumerfinance.gov/f/documents/
bcfp_hmda_interpretive-procedural-rule_2018-08.pdf.
---------------------------------------------------------------------------
    The Act contains provisions that are intended to decrease 
the burden smaller depository institutions face in complying 
with HMDA and its implementing regulation, Regulation C. Some 
such institutions have raised questions about the application 
of the Act, and the rule issued in August seeks to provide 
clarification. At a later date, the Bureau anticipates that it 
will initiate a notice-and-comment rulemaking to incorporate 
these interpretations and procedures into Regulation C and 
further implement the Act.

Q.6.o. Please provide a copy of all documents and 
communications relating to the decision to bring the OFLEO 
under the control of the Office of the Director, and strip 
OFLEO of its enforcement and oversight responsibilities.

A.6.o. The requested documents would contain confidential 
Bureau information. It would not be appropriate to submit them 
into the public record. I urge you to work with the Committee 
Chairman when submitting requests for confidential Bureau 
information.

Q.7. At the hearing, you said you had received approval to hire 
several political appointees to the CFPB. Please provide copies 
of that approval to the Committee.

A.7. The Bureau received official approval from the Office of 
Personnel Management (OPM) for the Schedule C political 
appointees via the OPM Form 1019 forms attached. [Attachment 
follows response to Senator Warren--A.47.e.].

Q.7.a. Additionally, did you perform any cost-benefit analysis 
in connection with the decision to hire these employees or set 
their salaries? If so, please provide copies of that analysis 
to the Committee.

A.7.a. The decision to place a position in the Schedule C 
category is made by the Director of OPM at the request of an 
agency head. The Bureau followed the process established by OPM 
and provided all of the information that OPM required. OPM does 
not require a cost-benefit analysis.

Q.8. At the hearing, you said you ``did not quash anything at 
OIRA,'' and that in fact ``no one'' had quashed anything. 
However, Bloomberg Law previously reported that ``Labor 
Department leadership convinced OMB Director Mick Mulvaney to 
overrule the White House regulatory affairs chief and release a 
controversial tip-sharing rule without data showing it could 
allow businesses to skim $640 million in gratuities.'' We have 
several follow-up questions:

Q.8.a. Were you aware of any dispute between OIRA Administrator 
Rao and the Department of Labor about whether the Department 
should include certain quantitative analysis in materials 
accompanying the tip-sharing regulation?

Q.8.b. Were you aware of any initial opposition by 
Administrator Rao to publishing the regulation without certain 
quantitative analysis?

Q.8.c. Have you, as OMB Director, ever intervened in disputes 
between the OIRA Administrator and the head or staff of a 
Federal agency (such as the Department of Labor)?

Q.8.d. Did you play any role, direct or indirect, either 
yourself or through your agents or political appointees, in 
resolving any dispute related to the tip-sharing rule between 
the OIRA Administrator and the Secretary of Labor or the staff 
of the Department of Labor? If so, please describe that role. 
Did the Secretary of Labor or the staff of the Department of 
Labor request your intervention related to the tip-sharing 
rule?

A.8.a.-d. We do not comment on the deliberative interagency 
review process for particular rules, but OMB Circular A-4 
continues to require that agencies quantify costs, benefits, 
and transfers to the extent feasible when preparing regulatory 
analysis for economically significant rules.
    No quantitative analysis was prepared by the Obama 
administration when the rule was originally promulgated. As the 
Department of Labor was preparing its analysis for this rule, 
it had no prior analysis to rely on. The Secretary of Labor has 
publicly stated that critical assumptions were required to 
provide quantitative analysis that could lead to almost any 
number. As a result, the Department of Labor determined they 
lacked sufficient data to provide a meaningful quantitative 
analysis.
    As you know, Congress recently acted on the 
Administration's recommendation to legislatively resolve the 
issue of whether employers may retain the tips of tipped 
employees. The amendments to the Fair Labor Standards Act 
(FLSA) that were included in the Consolidated Appropriations 
Act of 2018 now prohibit employers from keeping tips received 
by their employees, regardless of whether an employer takes a 
tip credit under the FLSA. The Department of Labor has 
announced that they expect to proceed with rulemaking in the 
near future to fully address the impact of the 2018 amendments 
to the FLSA, and OMB looks forward to working with DOL to 
ensure that any such rulemaking in this area contains an 
appropriately thorough and transparent regulatory impact 
analysis.

Q.9. At the hearing, you expressed concern about the handling 
of personal data by third parties with which the CFPB has 
contracted. Senator Perdue asked you if, ``every single factor 
that I have as an individual in the United States, every single 
financial factor can be reviewed, and can be collected, and can 
be exposed by the CFPB, is that correct?'' In creating the 
CFPB, Congress required the Bureau to monitor consumer 
financial products and services, including developments in 
those markets. It also limited the Bureau's market monitoring 
authority to prevent the Bureau from obtaining information for 
the purpose of gathering or analyzing the personally 
identifiable information of consumers.

Q.9.a. Can you clarify that the Bureau does not collect data 
for the purposes of monitoring any individual?

A.9.a. Correct, the Bureau does not collect data using its 
market monitoring authority in order to monitor individual 
consumers. Rather, the Bureau collects data to track the 
behavior of the markets. To do this, the Bureau does collect 
certain account-level data; however these data are de-
identified so that any particular individual is not directly 
identified. In September, the Bureau released a report \2\ on 
the Bureau's data governance program, what data the Bureau 
collects, where the data come from, how data are used, and how 
data are reused within the Bureau.
---------------------------------------------------------------------------
    \2\ https://www.consumerfinance.gov/data-research/research-reports/
sources-and-uses-data-bureau-consumer-financial-protection/.

Q.9.b. Does the data that the Bureau collects for market 
monitoring purposes differ from the data it reviews under its 
---------------------------------------------------------------------------
examination and supervisory authority?

A.9.b. Yes. The composition of a data collection differs 
depending on the purpose of the collection. The data collected 
for market monitoring is de-identified information so that it 
does not contain any consumer's name, address, account number, 
or Social Security number. The Bureau's Enforcement and 
Supervision staff often review individualized transactional 
data as part of their work.

Q.9.c. Is data gathered for market monitoring purposes stripped 
of personally identifiable information before it is studied by 
the Bureau?

A.9.c. The Bureau ensures that the data it uses for market 
monitoring purposes is first stripped of ``personally 
identifiable financial information,'' i.e., direct personal 
identifiers such as names, account numbers, or Social Security 
numbers. The Dodd-Frank Act places restrictions on the Bureau's 
collection and use of personally identifiable financial 
information in its market monitoring work.
    To be clear, ``personally identifiable information'' (PII) 
is a technical term that has been defined by the Office of 
Management and Budget (OMB) very broadly to include any 
information that can be used to distinguish or trace an 
individual's identity, either alone or when combined with other 
information that is linked or linkable to a specific 
individual. See OMB Circular A-130, Appendix II-1. Thus, any 
data that presents re-identification risk, however remote, is 
technically considered PII, even if it has been stripped of 
direct personal identifiers.

Q.9.d. Is it true that the private entities from whom the 
Bureau collects anonymized data have access to millions of 
Americans' personally identifiable information, and that those 
entities offer that information for sale to other private 
businesses?

A.9.d. Yes, the Bureau purchases publicly available data from 
entities with access to PII. The Bureau also has collected de-
identified data from financial institutions via financial firms 
that, due to the nature of their business, have access to PII 
on their customers.

Q.9.e. Does the data that the Bureau reviews in supervision and 
examination differ from the data that the prudential banking 
regulators review during their supervision and examinations?

A.9.e. The Bureau and prudential regulators review the same 
kinds of data during their respective compliance examinations. 
Prudential regulators review additional data for purposes of 
their safety and soundness examinations, which the Bureau does 
not conduct.

Q.9.f. What evidence exists that shows that third parties have 
mishandled such personal data? Please provide copies of any 
analysis that shows that these third parties have mishandled 
any personal data.

A.9.f. We are not aware of any data breach in connection with 
Bureau data possessed or handled by a third-party vendor under 
contract with the Bureau to assist with the Bureau's market 
monitoring, supervision, and examination work.
    The Bureau also has a relationship with the Conference of 
State Bank Supervisors (CSBS). CSBS created the Nationwide 
Multistate Licensing System and Registry, which is the system 
of record for nondepository, financial services licensing or 
registration in participating State agencies under the Bureau's 
Regulation G. In May 2015, CSBS notified the Bureau of a 
potential incident involving Nationwide Multistate Licensing 
System data where files from one financial institution were 
shared with another financial institution in error. The 
misrouted data was quickly identified and destroyed.

Q.10.a. In early December 2017, the CFPB withdrew its request 
to OMB to conduct an online survey of 8,000 individuals related 
to debt collection disclosures. This survey would have provided 
important data about debt collection disclosures to assist the 
CFPB's obligations to root out unfair, deceptive, and abusive 
acts and practices related to debt collection.
    Why did the CFPB withdraw this survey?

A.10.a. I note that this question is substantially similar to a 
question I received from Ranking Member Maxine Waters (CA) 
following my testimony before the House Committee on Financial 
Services, regarding the Bureau's Semi-Annual Report. For that 
reason, I am providing you the same response I provided the 
Ranking Member. Additionally, this question is substantially 
similar to a question I received from Senator Catherine Cortez 
Masto (NV) following my testimony before the Senate Committee 
on Banking, Housing, and Urban Affairs, regarding the Bureau's 
Semi-Annual Report. For that reason, I am providing you the 
same response I will provide to the Senator.
    The survey for which the Bureau sought Office of Management 
and Budget (OMB) approval under the Paperwork Reduction Act was 
tied to testing particular disclosures that were under 
consideration as part of a potential rulemaking with respect to 
debt collection. The request for comment on the Bureau's 
request appeared in the Federal Register on November 14, 2017, 
less than 2 weeks before I became the Acting Director. I 
decided that before proceeding with the survey I first wanted 
to review the proposals that were under consideration for the 
rulemaking so that any data collection would be tailored to 
what I determined to be the appropriate scope for the 
rulemaking rather than driven by decisions that may have been 
made by my predecessor. Prior to my tenure as Acting Director, 
the Bureau did conduct a survey of consumers about their 
experiences with debt collection.

Q.10.b. Did you personally approve this decision?

A.10.b. Yes.

Q.10.c. How do you reconcile this decision to deprive the CFPB 
of important data with your previous statements about your 
intention to engage in more cost-benefit analysis based on 
quantitative data?

A.10.c. Withdrawing the request to OMB did not deprive the 
Bureau of any data, but rather deferred a decision on what data 
would be relevant to collect until such time as I had the 
opportunity to review the scope of the underlying rulemaking.

Q.10.d. Did you undertake any cost-benefit analysis in 
connection with this decision? If so, please provide a copy of 
that analysis to the Committee.

A.10.d. As noted in a previous response, I decided that before 
proceeding with the survey I first wanted to review the 
proposals that were under consideration for the rulemaking so 
that any data collection would be tailored to what I determined 
to be the appropriate scope for the rulemaking.

Q.11.a. At the hearing, you said that you immediately issued a 
data collection freeze with certain accommodations made for
enforcement data and that you are now looking at some data 
offsite instead of storing it onsite.
    Did the Bureau perform a cost-benefit analysis prior to a 
decision to halt collection of certain data and instead view it 
offsite? If so, please provide that analysis.

A.11.a. When I joined the Bureau, I announced a 30-day data 
freeze on the collection of new sensitive data for the Bureau 
in order to assess the Bureau's data security program. While we 
instituted the freeze, I ensured that we could continue our 
enforcement and supervisory activities. To ensure strong data 
security in the meanwhile, we stored data at the same 
commercial vendor as the Department of Justice. Bureau staff 
budgeted for an increase of $1,055,830 in FY18, and anticipates 
that this funding will get us through the end of the 2018 
calendar year.

Q.11.b. What, if any, information did the Bureau previously 
collect that it does not collect now?

Q.11.c. What, if any, information did the Bureau previously 
collect that it does not collect or view offsite now?

A.11.b.-c. After December 4, 2017, the Division of Supervision, 
Enforcement, and Fair Lending (SEFL) suspended intaking certain 
sensitive information, such as data with direct personal 
identifiers. Enforcement attorneys were conducting review of 
most investigative materials by storing those materials on a 
system used by the U.S. Department of Justice (DOJ). 
Supervision did not take data with direct personal identifiers 
onto the Bureau's systems, instead reviewing it onsite.
    On May 31, 2018, after an exhaustive review by outside 
experts, including a comprehensive ``white-hat hacking'' 
effort, I lifted that hold. The independent review concluded 
that ``externally facing Bureau systems appear to be well-
secured.'' The assessors identified no ``Critical'' findings 
and made only three technical recommendations, all of which the 
Bureau has completed remediating.

Q.12. At the hearing, you said that you have been able to 
document 240 lapses in data security and that you suspect but 
have not been able to confirm 800 others. Are the 240 lapses in 
data security that you described 240 separate pieces of 
information or 240 instances in which multiple data lapses 
occurred? Please describe the nature of these lapses and how 
many of these lapses contained personally identifiable 
information (PII).

A.12. You may not be aware that prior to my appointment as 
Acting Director, there were 233 confirmed breaches of consumer 
PII within the Bureau's Consumer Response system. These 
confirmed breaches generally occurred in one of three ways: (1) 
the Bureau failed to follow internal processes and provided an 
update to a consumer about his or her complaint prior to 
receiving three pieces of information that would validate the 
consumer's identity; (2) the Bureau attached an incorrect 
document to a consumer's complaint; or (3) the Bureau sent an 
unencrypted email to the wrong consumer. Almost all breaches 
(approximately 90 percent) involved one or more of the 
following data elements: first name, last name, email address, 
phone number, or account number. For almost all of these 
breaches, the number of individuals potentially impacted by 
each breach was most likely one. This means that those breaches 
each involved separate pieces of information and no multiple 
data lapses occurred for any breach.
    In addition, prior to my appointment there were at least 
another 840 suspected PII breaches committed by financial 
institutions that the Bureau had not investigated to determine 
whether a breach occurred. Earlier this year, I instructed the 
staff to develop a proposal for responding to them.
    By July 1st, staff had implemented enhancements to the 
Bureau's processes for handling suspected PII breaches by 
financial institutions to determine whether a breach occurred, 
identify what steps the financial institution took to provide 
redress, and determine whether suspending, restricting, or 
otherwise modifying a financial institution's access to the 
secure Company Portal is warranted. These process enhancements 
reflect improved coordination between the Office of Consumer 
Response and the Chief Privacy Officer's staff.

Q.12.a. Does the Bureau monitor the accounts of particular 
consumers or track the financial habits or activities of any 
individual consumer? If so, in what cases?

A.12.a. To my knowledge the Bureau does not collect data for 
the purpose of monitoring an individual. The Bureau collects 
individual-level data to understand how consumer markets 
perform and proactively monitor consumer financial markets. 
However, data collected for the Bureau's monitoring function is 
generally de-identified so that any particular individual is 
not directly identified. In September, the Bureau released a 
report \3\ on the Bureau's data governance program, what data 
the Bureau collects, where the data come from, how data are 
used, and how data are reused within the Bureau.
---------------------------------------------------------------------------
    \3\ https://www.consumerfinance.gov/data-research/research-reports/
sources-and-uses-data-bureau-consumer-financial-protection/.

Q.13.a. In response to questions about data security at the 
Bureau, you said, ``the rule is this, I'm not going to hold 
somebody to a higher standard than we're willing to hold 
ourselves.''
    Will you assure us that the Bureau also will hold any 
company that holds consumers' data to the same standard that 
you hold the Bureau?

A.13.a. The Bureau will exercise the authority granted to it.

Q.13.b. How has the data collection freeze affected the CFPB's 
supervisory and examination efforts? Please provide statistics 
on the following:

       LThe mean and median time to complete an 
        examination over (i) the 6 months before you 
        implemented the data freeze and (ii) the period 
        beginning when you implemented the data freeze and 
        ending April 19, 2018.

       LThe mean and median cost per examination over 
        (i) the 6 months before you implemented the data freeze 
        and (ii) the period beginning when you implemented the 
        data freeze and ending April 19, 2018.

A.13.b. I am not aware of any evidence suggesting that the 
temporary data security measures affected supervisory and exam
efforts in a quantifiable way. To address the specific metrics 
identified, the mean number of days it took to issue an exam 
report or supervisory letter after first going onsite was 212 
days for exams taking place between June 4, 2017 and December 
4, 2017. The median for that same period was 170 days. For the 
period between December 5, 2017 and April 19, 2018, the mean 
was 210 days and the median was 182 days.
    I am not aware of any evidence suggesting that the 
temporary data security measures have affected supervisory and 
exam efforts in a quantifiable way. Further, there is not 
sufficient data to estimate what the cost difference would be, 
and/or whether there is a cost difference.
                                ------                                


   RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED FROM MICK 
                            MULVANEY

Q.1. Does the President stand by the Bipartisan Budget 
Agreement he signed into law in February, including the top 
line numbers for defense and nondefense spending?

A.1. The President supported the agreement that he signed into 
law in February, as it allowed for critical investments to be 
made in support of our National Security. The President 
recognizes that the agreement set funding caps for both defense 
and nondefense. However, the caps--by definition--are ceilings 
on spending and not floors. The President believes it is his 
responsibility to spend only what is necessary under the caps. 
Given the current fiscal situation, and the Administration's 
views on the proper role and scope of the Federal Government, 
the President's Budget does not propose spending at the 
nondefense levels for FY 2019 included in the recent budget 
agreement. Furthermore, as the President carries out his duties 
to execute enacted appropriations, he also believes it is his 
responsibility to propose reductions in places where he 
believes the spending will be wasteful or unnecessary.

Q.2.a. One of the early decisions under your tenure was to 
reverse the CFPB's previous practice of consolidating the 
required reporting on campus credit cards with a broader 
analysis of campus-based financial products. Institutions of 
higher education have considerable influence on their students' 
financial choices, from
student loans to credit cards to bank accounts and other 
financial products. CFPB, in fulfilling its broader mandate to 
protect consumers in the financial products marketplace, 
previously has played an important role in disclosing 
information on these financial products to students.
    What actions are you taking to protect and inform student 
consumers?

A.2.a. The Bureau of Consumer Financial Protection (Bureau) 
helps young adult consumers navigate the consumer finance 
market and manage their money by developing tools and resources 
with a focus on student debt and paying for college.\1\ The 
Bureau also provides student loan borrowers with commonly asked
questions and answers on financial topics from bank accounts to 
credit cards through our online question and answer tool.
---------------------------------------------------------------------------
    \1\ See https://www.consumerfinance.gov/consumer-tools/student-
loans/.

Q.2.b. Please describe how the CFPB is currently collaborating 
---------------------------------------------------------------------------
with the U.S. Department of Education on the following:

Q.2.b.i. Student loan servicing complaints;

A.2.b.i. The Bureau's collaboration with the Department of 
Education on student loan servicing complaints was governed by 
an October 19, 2011, Memorandum of Understanding (MOU) that 
allowed the Bureau to refer servicing complaints to the 
Department of Education through a secure web portal. The 
Department of Education terminated that MOU effective October 
1, 2017. In the absence of an MOU, the Department of Education 
continues to have access to the Bureau's public complaint 
database.

Q.2.b.ii. Student loan servicing standards; and

A.2.b.ii. The Bureau's Office of Supervision and the Department 
of Education's Office of Federal Student Aid (FSA) have held 
interagency consultations to discuss student loan servicing and 
the standards adhered to by servicers.

Q.2.b.iii. Protecting student loan borrowers from debt relief 
scams.

A.2.b.iii. Since the termination of the supervisory MOU, the 
Bureau continues to pursue options that would allow for the 
Bureau to share Confidential Supervisory Information with the 
Department of Education for permissible purposes under 12 CFR 
1070.43. These efforts include providing relevant supervisory 
information where the Department of Education has active 
confidentiality assurances and negotiating with the Department 
of Education for the Bureau to obtain information from student 
loan servicers necessary for supervisory examinations. The 
Department of Education continues to have access to the 
Bureau's public complaint database. Bureau staff also continues 
to analyze complaint data and provide that analysis as 
technical assistance when requested by the Department of 
Education.

Q.2.c. Has the Federal Student Aid Administration at the U.S. 
Department of Education consulted with the CFPB on the proposal 
to create a pilot student aid payment card program? If so, what 
guidance has the CFPB offered?

A.2.c. The Bureau and the FSA have participated in a series of 
staff-level discussions related to FSA's proposed pilot student 
aid payment card program, during which Bureau staff offered 
general subject-matter expertise about the prepaid card market. 
In addition, the Bureau provided FSA with an analysis, at its 
request, of publicly available data on fees assessed by 
companies that currently provide college-sponsored debit and 
prepaid products to students.
                                ------                                


   RESPONSES TO WRITTEN QUESTIONS OF SENATOR SCOTT FROM MICK 
                            MULVANEY

Q.1. Thank you Director Mulvaney for joining the Committee. 
It's always a pleasure to have a South Carolinian in the mix. I 
have to confess: I'm a bit confused by the outrage from my 
friends across the aisle over the CFPB's lack of 
accountability. Weren't they the ones that designed the Bureau 
and voted for its creation? Did they not realize there would be 
another election? Did they not think there was a chance their 
party wouldn't be in power? Now that the shoe's on the other 
foot, it's not so fun. That's why both sides of this debate 
should meet in the middle. A CFPB that swings wildly in the 
political winds is bad for consumers and terrible for the 
economy. Mick, I agree with your commonsense recommendations. 
It's time for a bipartisan commission at the Bureau. And it's 
time to place the Bureau under Congressional appropriations. 
Doing so will create a more trustworthy CFPB better able to 
protect consumers. With that, I do have some questions.
    I was glad to see your report's first section was titled 
``credit invisibles.'' The Bureau found that over 26 million 
Americans are ``credit invisible,'' meaning they have no 
recorded credit history. That includes 23 percent of South 
Carolinian adults. A disproportionate amount of these folks are 
African American or Hispanic. We're trying to tackle this 
problem through the Credit Score Competition Act, legislation 
that will allow for the use of newer credit scoring models by 
Fannie and Freddie. Modern credit scoring models use data like 
rent payments, utility payments, and cell phone bill payments, 
all of which benefits the ``credit invisible.'' Plus, a free 
market guy like yourself would agree that the Government 
shouldn't be picking winners and losers. Unfortunately, the 
CFPB's safe harbor for its QM rule applies to loans using the 
same old credit score mandated by the GSEs. Please answer the 
following with specificity:
    Wouldn't encouraging the use of newer credit scoring models 
better align with the Bureau's dual mandate to provide market 
access to all consumers and ensure competitive markets?

A.1. As you note, the Bureau of Consumer Financial Protection's 
(Bureau's) research shows that 26 million consumers are 
``credit invisible'' and do not have credit files at all in our 
national credit reporting system. Another 19 million adult 
consumers have credit files that are ``stale'' or ``thin,'' 
i.e., the file information is insufficient to generate a credit 
score. The Bureau has taken a number of steps to explore the 
use of alternative data and modeling techniques as a potential 
way to increase access to credit for these consumers, while 
being mindful of the risks that these innovations can pose to 
consumers. For example, last year, the Bureau published a 
Request for Information (RFI) Regarding Use of Alternative Data 
and Modeling Techniques in the Credit Process, and received 
approximately 100 comments in response. Comments received in 
response to this RFI have been made public and may help 
industry develop best practices for using alternative data and 
modeling techniques. Also, the Bureau held a day-long 
symposium, Building a Bridge to Credit Visibility on September 
17, 2018. This event explored challenges many consumers face in 
accessing credit. Sessions also highlighted strategies and 
innovations to overcome barriers and expand consumer credit 
access.
    In addition, the Bureau issued a No-Action Letter to a 
company that uses alternative data in making credit and pricing 
decisions. That company evaluates consumer loan applications 
using traditional factors such as credit score and income, as 
well as incorporating nontraditional sources of information 
such as education and employment history, and will be required 
to regularly report lending and compliance information to the 
Bureau to mitigate risk to consumers and aid the Bureau's 
understanding of the real-world impact of alternative data on 
lending decisionmaking. The Bureau may explore similar steps in 
the future.

Q.2. I want to move on to the topic of insurance, a product I 
sold for over 20 years. Please answer the following with 
specificity:

Q.2.a. Is the CFPB an insurance regulator?

A.2.a. No.

Q.2.b. Did Congress intend for the CFPB to regulate insurance?

A.2.b. No, I do not believe so.

Q.2.c. Would you support legislation to make it clear that 
Congress intended to exempt insurance from the Bureau's 
authority when it passed the Dodd-Frank Act?

A.2.c. I believe that in Section 1027(t) of Dodd-Frank Wall 
Street Reform and Consumer Protection Act (Dodd-Frank Act) 
Congress made clear its intention not to provide the Bureau 
jurisdiction over State-regulated insurance companies except to 
the extent they offer a consumer financial product or service. 
The Bureau should not regulate insurance.
                                ------                                


   RESPONSES TO WRITTEN QUESTIONS OF SENATOR SASSE FROM MICK 
                            MULVANEY

Q.1.a. I appreciate your concern about the CFPB's large-scale 
collection of consumer data. In November 2015, I wrote then-
CFPB Director Cordray on this topic. Director Cordray responded 
on April 6, 2017. Please answer the following questions, all of 
which are substantially similar to those that Director Cordray 
answered on April 6, 2016.
    Former Director Cordray testified at a hearing with the 
Senate Banking Committee on July 15, 2015, regarding reverse 
engineering of information in the CFPB's database collections, 
that ``it is not easy to do that. It would take a lot of time 
and effort to do that. I don't see that it would be worth 
anybody's while to try to do that.''\1\
---------------------------------------------------------------------------
    \1\ See The Consumer Financial Protection Bureau's Semi-Annual 
Report to Congress: Hearing Before the Senate Banking Committee on 
Banking, Housing, and Urban Affairs, 114th Cong. (2015) http://
www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&
Hearing_ID=7cac453a-bd43-4f4c-b071-9aba43c80946.
---------------------------------------------------------------------------
    Do you agree?

A.1.a. When originally asked this question, it pertained to the 
credit card data the Bureau of Consumer Financial Protection 
(Bureau) receives. These data are difficult to reidentify. Even 
so, since then, the Bureau has changed key aspects of the data 
collection that further decrease any privacy risks.

Q.1.b. Why or why not?

A.1.b. The credit card data that the Bureau receives does not 
contain direct personal identifiers or account numbers and does 
not contain information about transactions such as purchases. 
Rather, it is de-identified account level data. In addition, at 
the urging of multiple Members of Congress, the Bureau has 
reduced the data it retains to a 40 percent sample, making it 
increasingly harder to re-identify data housed at the Bureau.
    Identifying an individual from a de-identified dataset 
(``reverse engineering'') generally involves combining that 
data with additional data that is not de-identified. Reverse 
engineering the Bureau's data likely would involve acquiring 
multiple similar data sources that are not publicly available, 
a task that would be time consuming, difficult, and expensive.
Q.1.c. Has the CFPB conducted a study looking at the national 
security, privacy, and economic risk that could come from a 
data breach, including the possibility that information 
contained in the databases could be reverse engineered? If so, 
please provide us with a copy of this report. If not, please 
provide an explanation for why the CFPB has not yet conducted 
this study.

A.1.c. I share your concern about the risk of a breach of 
Bureau data, and the consequences therefrom. Soon after I 
arrived, I commissioned a white hat hackers exercise to test 
the security of the Bureau's systems. The independent review 
concluded that ``externally facing Bureau systems appear to be 
well-secured.'' The assessors identified no ``Critical'' 
findings and made only three technical recommendations, all of 
which the Bureau has completed remediating. This is, however, 
no guarantee of security, and the Bureau must remain vigilant 
in its efforts and response to emergency threats.

Q.1.d. Who is the highest-ranking person in charge of 
cybersecurity at CFPB?

A.1.d. Jerry Horton, Chief Information Officer (CIO).

Q.1.e. Is this person solely and directly responsible for 
cybersecurity or are there others as well?

A.1.e. The CIO has designated a Chief Information Security 
Officer (CISO) to carry out those responsibilities. The CISO 
manages a cyber-security team.

Q.1.f. Is anyone at the CFPB in charge of assessing the 
strategic security risks the various databases could pose? If 
so, who?

A.1.f. The Bureau's Chief Information Officer is the senior 
Bureau official in charge of assessing risk associated with 
data maintained by the Bureau. The CIO is supported by numerous 
staff in making these risk assessments, including a Chief 
Information Security Officer, a Chief Data Officer, a Chief 
Privacy Officer, and staff in their respective offices.

Q.1.g. Does the CFPB and the OCC hold information on 
transaction level data, such as on individual purchases, in the 
CFPB's credit-related databases? If so, what type of 
information is held?
    Does this include data on the date, location, and price of 
each transaction?

A.1.g. No. The Bureau's credit card database does not contain 
transaction-level information, such as individual purchases.

Q.1.h. Can you state with certainty that a data breach at the 
CFPB could not result in the reverse engineering of information 
in the CFPB's various credit databases to identify personal 
information from individual consumers?

A.1.h. No. It is not possible to state categorically that any 
system is incapable of being breached or that any protections 
can ensure with certainty that information cannot be reverse 
engineered.

Q.1.i. Can you state with certainty that a data breach at the 
CFPB could not result in the reverse engineering of information 
in the CFPB's National Mortgage Database to identify personal 
information from individual consumers?

A.1.i. No. As noted in the previous response, it is not 
possible to state categorically that any system is incapable of 
being breached or that any protections can ensure with 
certainty that information cannot be reverse engineered.

Q.1.j. Can you state with certainty that a data breach at the 
CFPB could not result in the reverse engineering of information 
in any of the CFPB's other databases to identify personal 
information from individual consumers?

A.1.j. No. As noted in the previous response, it is not 
possible to state categorically that any system is incapable of 
being breached or that any protections can ensure with 
certainty that information cannot be reverse engineered.

Q.1.k. Is the CFPB in full compliance with all Federal 
cybersecurity laws and guidance?

A.1.k. The Bureau complies with requirements provided in FISMA, 
applicable Office of Management and Budget (OMB) Memoranda, 
U.S. Department of Homeland Security (DHS) Binding Operational 
Directives, and other applicable guidance.

Q.1.l. If any of the CFPB's large-scale databases were ever 
breached, how many Americans would have their information 
exposed?

A.1.l. As noted in a previous response, much of the data held 
by the Bureau (including collections previously examined by the 
Government Accountability Office) consist of de-identified 
information that do not contain any consumer's name, address, 
account number, or Social Security number. Therefore, 
information that could be exposed by a breach of the large-
scale databases (such as those identified in the GAO report 
\2\) would not be attributable to a specific American. If an 
individual were to attempt to re-identify a record from the 
Bureau's datasets, he or she would generally find only basic 
non-identifiable data that would not be very useful in any 
attempted combination with other available information.
---------------------------------------------------------------------------
    \2\ Consumer Financial Protection Bureau: Some Privacy and Security 
Procedures for Data Collections Should Continue Being Enhanced, GAO-14-
758, September 22, 2014.

Q.1.m. What if information about the identity of individual 
---------------------------------------------------------------------------
consumers in your databases could be reverse engineered?

A.1.m. As noted in a previous response, it is not possible to 
state categorically that any protections can ensure with 
certainty that information cannot be reverse engineered. For 
the de-identified
information contained in the Bureau's databases (including
collections examined by GAO) much of the data are at the 
account rather than transaction level.

Q.1.n. Does the CFPB's databases ever contain personal 
information that will be depersonalized at any point? If so, 
when does the CFPB store such information, and for how long is 
such information stored on the CFPB's servers?

A.1.n. Data from the consumer complaint database are de-
identified and made available to the public and internally.\3\
---------------------------------------------------------------------------
    \3\ In November 2017, the Bureau identified that its redaction 
program inadvertently had not redacted proper nouns that arose in 
certain circumstances in published complaint narratives, impacting 101 
complaints. The Bureau determined that the privacy risk associated with 
the disclosure was minimal with respect to most of the complaints. It 
identified two individuals who could be subject to risk of harm by the 
disclosure and notified them of the breach. The Bureau also fixed the 
error that led to the missed redactions.
---------------------------------------------------------------------------
    Occasionally, enforcement or supervisory data are de-
identified and used for market monitoring or research that may 
inform rulemaking or assessments. These data are de-identified 
before they are used for these purposes. The retention of these 
data is based on records retention schedule for the data.

Q.1.o. Can you provide a comprehensive list of the sources from 
which the CFPB purchases and receives data?

A.1.o. In September, the Bureau released a report \4\ on the 
Bureau's data governance program as well as what data the 
Bureau collects, where the data come from, how data are used, 
and how data are reused within the Bureau.
---------------------------------------------------------------------------
    \4\ https://www.consumerfinance.gov/data-research/research-reports/
sources-and-uses-data-bureau-consumer-financial-protection/.

Q.2. A June 10, 2015, letter from Senators Scott and Crapo, 
---------------------------------------------------------------------------
along with 21 other Senators, noted the following:

        At [a 2013 House Financial Services Subcommittee hearing, 
        Acting Deputy Director Stephen Antonakes] said that CFPB was 
        ``in the process of developing . . . our data destruction 
        schedules,'' and confirmed that until such destruction protocol 
        was in place, that CFPB would be holding all the data it has 
        ever collected.'' Director Cordray's July 14, 2015 response to 
        this letter explained that the CFPB has received approval from 
        the National Archivist on some of the CFPB's retention 
        schedules but not others. However, this letter did not clarify 
        if the CFPB has started to delete any of its data.

Q.2.a. Please provide us with a list of what--if any--data the 
CFPB has already started to delete, what specific data the CFPB 
plans to delete, and an expected timeline for when the CFPB 
will fully implement its data destruction schedules.

A.2.a. The destruction of data depends on variables, including 
how the data was acquired and the type of data. For example, 
commercially purchased data has vendor license agreement 
restrictions. Ultimately, the destruction of records is 
controlled by the record retention schedules for each division 
within the Bureau. A list of the approved records management 
schedules for the Bureau can be found at: https://
www.archives.gov/recordsmgmt/rcs/schedules/index.html?dir=/
independent-agencies/rg-0587.

Q.2.b. How does CFPB control access to its various databases 
that contain consumer information?

Q.2.b.i. Please provide a comprehensive list of what types of 
people the CFPB provides, and plans to provide, access to the 
database. For example, are outside researchers able to access 
these databases?

A.2.b.i. As outlined in the Bureau's report on the Sources and 
Uses of Data at the Bureau, the Bureau's Policy on Information 
Governance establishes guidelines regarding access to 
information by CFPB employees and contractors. This policy sets 
forth the principles governing who may be granted access to 
what data, based on the sensitivity level of the data and the 
user's assigned duties. The Bureau manages access to data at 
the level of each individual data asset for all network users, 
including contractors. In addition, all users are subject to 
the same training requirements and background checks. The 
Bureau grants access to information consistent with the 
information's sensitivity level (as outlined in the Bureau's 
Information Sensitivity Leveling Standard), the authority under 
which the Bureau collected the information, the Bureau's 
information sharing standards, cybersecurity policies and 
procedures, and applicable law or contractual obligations.
    The Bureau has a limited number of researchers who are 
subject to Intergovernmental Personnel Agreements and 
therefore, subject to all Bureau policies, standards and 
related data access restrictions. The Bureau does not currently 
have an outside researchers program.

Q.2.c. Does the CFPB conduct background checks on any 
individuals who are provided access to their consumer 
databases?

A.2.c. All Federal employees and contractors go through 
background checks. The Bureau also has established access 
control policies.

Q.3. On January 9, 2017, I wrote to the Trump administration, 
with Senator Mike Lee, calling for President Trump to fire 
then-CFPB Director Richard Cordray. As we said at the time:

        [R]emoving Director Cordray would be consistent with President 
        Trump's oath to `preserve, protect, and defend the Constitution 
        of the United States' and his duty to serve as an independent 
        guardian of the U.S. Constitution. Removing Director Cordray 
        would also uphold the American idea of limited government, 
        because Director Cordray has vigorously supported the 
        unconstitutional independence of the CFPB and pursued a 
        regulatory agenda that is harmful to the American people.

Please answer the following questions relating to this letter 
on unconstitutional independence of the CFPB. Our letter argued 
the following:

    Over the past 80 years, however, the Federal Government has 
blurred the lines between the executive branch and Congress by 
delegating lawmaking authority to agencies, including to a 
``headless fourth branch'' of independent agencies 
unaccountable to the public or the president. The CFPB is the 
single-most egregious example of this practice.

Q.3.a. Do you agree?

A.3.a. I expressed my views regarding the structure of the 
Bureau in the preface to the semi-annual Report of the Bureau 
of Consumer Financial Protection issued in April 2018.\5\ As I 
stated there, the structure and powers of the Bureau are not 
something the Founders and Framers would recognize.
---------------------------------------------------------------------------
    \5\ https://www.consumerfinance.gov/data-research/research-reports/
semi-annual-report-fall-2017/.

---------------------------------------------------------------------------
Q.3.b. Why or why not?

A.3.b. As I explained in the semi-annual Report issued in April 
2018, the Bureau is far too powerful, and with precious little 
oversight of its activities. Per the statute, in the normal 
course the Bureau's Director simultaneously serves in three 
roles: as a one-man legislature empowered to write rules to 
bind parties in new ways; as an executive officer subject to 
limited control by the President; and as an appellate judge 
presiding over the Bureau's in-house court-like adjudications. 
By structuring the Bureau the way it has, Congress established 
an agency primed to ignore due process and abandon the rule of 
law in favor bureaucratic fiat and administrative absolutism.

Q.3.c. Our letter cited the CFPB's ``ill-defined authority to 
prohibit `abusive acts or practices,' '' as an example of the 
agency's ``vague and sweeping authority to regulate large 
swaths of the economy . . . ''
    Do you agree?

A.3.c. During my testimony before the House Committee on 
Financial Services, I expressed my view that the term 
``abusive,'' while defined by the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Dodd-Frank Act), provides the 
agency with a great deal of discretion because the terms of the 
definition are inherently subjective. I suggested that this 
would be a place for Congress to provide additional guidance.

Q.3.d. If so, what do you intend to do to reign in this 
authority?

A.3.d. The Bureau has and will continue to closely review any 
exercise of the Bureau's authority to enforce the Dodd-Frank 
Act's prohibition on abusive acts and practices. In addition, 
on January 16, 2018, the Bureau publicly announced its 
intention to engage in a rulemaking process so that the Bureau 
may reconsider its rule entitled ``Payday, Vehicle Title, and 
Certain High-Cost Installment Loans'' (Payday Rule). The Payday 
Rule is the only rule issued by the Bureau to date that relies 
on the Bureau's authority to identify abusive acts or practices 
and imposes requirements intended to prevent abusive practices. 
The Bureau is also considering how rulemaking may be helpful to 
further clarify the meaning of ``abusiveness'' under the 
section 1031 of the Dodd-Frank Act.

Q.4. Judge Kavanaugh's dissent for the DC Circuit's en bane 
decision in PHH Corp. v. CFPB argued that the CFPB's structure 
``represents a gross departure from settled historical 
practice'' because ``[n]ever before has an independent agency 
exercising substantial executive authority been headed by just 
one person.'' As a result of the broad authority delegated to 
the CFPB and its novel
structure, aside from the president, the CFPB Director is quite
possibly the ``single most powerful official in the entire U.S. 
Government.''

Q.4.a. Do you agree?

A.4.a. As noted in a previous response, I expressed my views 
regarding the structure of the Bureau in the preface to the 
semi-annual Report of the Bureau of Consumer Financial 
Protection issued in April 2018. As I stated there, the 
structure and powers of the Bureau are not something the 
Founders and Framers would recognize. I also sought four 
legislative changes to the Bureau to improve accountability: 
fund the Bureau through Congressional appropriations, require 
legislative approval of major Bureau rules, ensure that the 
Director answers to the President in the exercise of executive 
authority, and create an independent Inspector General for the 
Bureau.

Q.4.b. Why or why not?

A.4.b. As I explained in the semi-annual Report issued in April 
2018, the Bureau is far too powerful, and with precious little 
oversight of its activities. Per the statute, in the normal 
course the Bureau's Director simultaneously serves in three 
roles: as a one-man legislature empowered to write rules to 
bind parties in new ways; as an executive officer subject to 
limited control by the President; and as an appellate judge 
presiding over the Bureau's in-house court-like adjudications. 
By structuring the Bureau the way it has, Congress established 
an agency primed to ignore due process and abandon the rule of 
law in favor bureaucratic fiat and administrative absolutism.

Q.5. Judge Kavanaugh's PHH dissent argued that Dodd-Frank's 
restriction on the president's power to remove the CFPB's 
Director violated Article II of the constitution and that the 
president has the constitutional authority to remove the 
director at will. Do you agree?

A.5. I have sought legislation that would ensure that the 
Bureau's Director serves at the pleasure of the President.

Q.6. In 2012, the CFPB set up ``Project Catalyst,'' an 
initiative that was meant to ``support the creation and growth 
of innovative consumer financial products and services.'' Some 
have argued that Project Catalyst has been so muddled as to be 
unhelpful for companies.

Q.6.a. Do you agree?

A.6.a. Yes.

Q.6.b. Why or why not? If you agree, how is the CFPB addressing 
this problem?

A.6.b. I have created the Bureau's Office of Innovation, which 
is working to revise Bureau policies where appropriate and 
coordinate with State, Federal, and international agencies to 
promote innovation for the benefit of consumers.

Q.7. As an example of how the CFPB could improve Project 
Catalyst, in your recent hearing in front of the House 
Financial Services Committee, you said that the CFPB 
``continue[s] to look at [no action letters] as a potential 
tool.''

Q.7.a. Can you elaborate? As you know the CFPB's first no 
action letter was not issued until September 14, 2017. Is the 
CFPB considering issuing more no action letters? Would issuing 
more no action letters require easing the regulatory standards 
for a no action letter, or adjusting the legal import of such 
letters?

A.7.a. Yes, the Bureau would like to issue more no action 
letters, and is considering what adjustments should be made to 
the Bureau's current policy to achieve such result and what 
other types of relief beyond traditional no-action letter 
programs might be provided.

Q.7.b. How could the increased use of no action letters 
encourage innovation?

A.7.b. By providing increased assurance to market participants 
that the Bureau will work collaboratively with them to bring 
products to market for the benefit of consumers.

Q.8. As you know, Arizona recently launched a State-level 
FinTech sandbox. As a part of revamping Project Catalyst, would 
the CFPB considering exempting State-level sandboxes from 
Federal regulations using its section 1022 exemption authority?

A.8. This is an interesting idea and the Office of Innovation 
will explore it. The Bureau's ability to effectively coordinate 
with State partners in this area will be an important factor in 
assessing the success of the Office of Innovation.
                                ------                                


  RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARREN FROM MICK 
                            MULVANEY

Q.1. Last week, you testified that ``regulation by enforcement 
is done, we're not doing it anymore.'' What does that mean?

A.1. That means that I have departed from the practice of my 
predecessor, which was to use consent orders to signal market 
participants new Bureau of Consumer Financial Protection 
(Bureau) expectations and requirements, rather than first 
issuing example guidance or engaging in Administrative 
Procedures Act compliant rulemakings. This practice not only 
deprived regulated entities of the advance opportunity to 
conform their behavior to the requirements of the law, it 
starved Bureau enforcement resources.

Q.2. Will CFPB open new investigations under its Unfair, 
Deceptive, Abusive Acts and Practices enforcement authority? If 
so, what criteria will CFPB use to determine whether to open 
these investigations?

A.2. Yes, where appropriate. The Bureau is tasked with 
enforcing Federal consumer financial law, which includes the 
prohibition on covered persons engaging in unfair, deceptive, 
or abusive acts or practices. The Bureau will look to the 
language of the Consumer Financial Protection Act (CFPA) and 
existing case law, including the unfairness and deceptive cases 
brought by the Federal Trade Commission (FTC) under the Federal 
Trade Commission Act, when evaluating whether a given practice 
is unfair or deceptive.

Q.3. Will CFPB continue to negotiate settlements or file 
lawsuits under its Unfair, Deceptive, Abusive Acts and 
Practices
enforcement authority? If so, what criteria will CFPB use to 
determine whether to negotiate settlements or file lawsuits?

A.3. Yes, where appropriate, as noted in the previous response.

Q.4. Will CFPB continue to prosecute lawsuits already brought 
under its Unfair, Deceptive, Abusive Acts and Practices 
enforcement authority? If so, what criteria will CFPB use to 
determine whether to prosecute lawsuits?

A.4. Yes, where appropriate, as noted in previous response.

Q.5. In either the supervisory or enforcement contexts, will 
CFPB take action against regulated entities whose neutral 
policies have a disparate impact on a certain protected classes 
of consumers?

A.5. Whether or not the Bureau will take any action against a 
regulated entity depends upon the facts and circumstances 
specific to that case.

Q.6. Is your review of enforcement cases still ongoing? When is 
it projected to end?

A.6. The Bureau's review is ongoing.

Q.7. Please provide a list enforcement cases currently active 
in Federal Court, including the court, the docket number, and 
the judge.

A.7. See attached. 

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


Q.8. How many enforcement actions were filed from November 25, 
2016-November 24, 2017?

A.8. Forty-three public enforcement actions, including consent 
orders and lawsuits, were filed between November 25, 2016 and 
November 24, 2017.

Q.9. How many of those were fair lending cases brought with the 
Justice Department in in the same period?

A.9. Zero.

Q.10. On average, how much does CFPB spend on enforcement 
investigations where it does not subsequently file a lawsuit?

A.10. The Bureau does not maintain this type of information.

Q.11. On average, how much does CFPB spend on those enforcement 
cases that are settled?

A.11. The Bureau does not maintain this type of information.

Q.12. On average, how much does CFPB spend on enforcement cases 
that are filed in Federal court or on the administrative 
docket?

A.12. The Bureau does not maintain this type of information.

Q.13. How much in relief did consumers obtain from CFPB 
enforcement actions last year?

A.13. In calendar year 2017, $335 million in consumer relief 
was ordered in Bureau enforcement actions. The corresponding 
number for FY 2017 is $354 million.

Q.14. How many exams did CFPB do from November 25, 2016-
November 24, 2017?

A.14. The Bureau does not generally publicly disclose this kind 
of confidential supervisory information beyond that disclosed 
in its annual performance plan and report.

Q.15. How many of those were fair lending examinations?

A.15. The Bureau does not generally publicly disclose this kind 
of confidential supervisory information beyond that disclosed 
in its annual performance plan and report.

Q.16. How much, on average, did examinations cost from November 
25, 2016-November 24, 2017?

A.16. The Bureau does not maintain this type of information.

Q.17. How long, on average did these examinations take from 
November 25, 2016-November 24, 2017?

A.17. For exams with onsite start dates from November 25, 2016 
to November 24, 2017 that were completed at the time of this 
response, exams took, on average, 174 days from onsite start 
until exam report was mailed.

Q.18. How much in relief did consumers get from violations 
discovered during exams from November 25, 2016-November 24, 
2017?

A.18. In Issue #15 of Supervisory Highlights,\1\ the Bureau 
reported that institutions provided $6,694,289 of consumer 
redress in response to supervisory activity. The Bureau 
reported $14,006,695 of consumer redress in Issue #16.\2\
---------------------------------------------------------------------------
    \1\ https://www.consumerfinance.gov/documents/4608/
201704_cfpb_Supervisory-Highlights_Issue-15.pdf.
    \2\ https://www.consumerfinance.gov/documents/5386/
201709_cfpb_Supervisory-Highlights_Issue-16.pdf.

Q.19. How many new enforcement investigations have been 
---------------------------------------------------------------------------
initiated during your time at the CFPB?

A.19. The Bureau does not generally comment publicly on 
confidential enforcement investigations.

Q.20. How many open cases have been dropped?

A.20. The Bureau does not generally comment publicly on 
confidential enforcement investigations.

Q.21. In how many cases has CFPB asked for a continuance? 
Please provide a list of all such cases, the continuance asked 
for by CFPB, and the current status.

A.21. We interpret continuances to mean tolling agreements 
during our investigations. The Bureau does not generally 
comment publicly on confidential enforcement investigations.

Q.22. How many examinations have been completed since you took 
over?

A.22. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.23. How many of those were fair lending examinations?

A.23. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.24. How much on average did those examinations cost?

A.24. The Bureau does not maintain this type of information.

Q.25. How long on average did they take?

A.25. On average, examinations that were completed between 
November 27, 2017 and April 30, 2018 took 204 days to complete.

Q.26. How much in relief has been given to consumers from 
violations discovered in examinations?

A.26. As of September 24, 2018, entities have reported to the 
Bureau that $540,195,754 in restitution was made to 4,100,745 
consumers. This amount does not include amounts obtained via 
enforcement action, and includes self-reported restitutions.

Q.27. How many exams are currently in progress?

A.27. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.28. How many of those are fair lending examinations?

A.28. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.29. How many exams are planned for the rest of 2018?

A.29. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.30. How many of those are fair lending examinations?

A.30. The Bureau does not publicly disclose this kind of 
confidential supervisory information beyond that disclosed in 
its annual performance plan and report.

Q.31. You previously committed to this Committee that you 
intended to preserve the practice of delegating decisions on 
the opening of new investigations to career Enforcement staff 
at CFPB.

Q.31.a. Can you confirm that CFPB's current process is free 
from interference by your new political appointees, including 
any decisionmaking about whether illegal practices identified 
via Supervision should result in the opening of a new 
Enforcement matter?

A.31.a. Bureau policy delegates the decisions of whether to 
open an investigation to the Enforcement Director, a career 
official. 12 C.F.R.  1080.4 (``The Assistant Director of the 
Office of Enforcement and the Deputy Assistant Directors of the 
Office of Enforcement have the nondelegable authority to 
initiate investigations.''). Decisions by career staff to open 
an investigation are reviewed by the Policy Associate Director 
of the Division of Supervision, Enforcement, and Fair Lending.

Q.31.b. Specifically, have there been cases where career 
Enforcement staff have recommended opening a new enforcement 
matter, but have been prevented from doing so by you, your 
immediate staff, or other political appointees at CFPB?

Q.31.c. If so, how many times has this occurred since November 
25, 2017?

Q.31.d. Why were career Enforcement staff not allowed to 
proceed with their recommendation in these cases?

A.31.b.-d. The Bureau does not generally comment publicly on 
confidential enforcement investigations.

Q.32. Did the CFPB perform a legal or other analysis to 
determine whether stripping the OFLEO of its enforcement 
authority would hinder the CFPB's ability to carry out its 
statutory mandate to provide oversight and enforcement of 
Federal fair lending laws? If so, please provide the analysis.

A.32. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Ranking Member Sherrod Brown (OH) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member.
    Under the Dodd-Frank Act, the Office of Fair Lending and 
Equal Opportunity (OFLEO) ``shall have such powers and duties 
as the Director may delegate to the Office.'' I have been 
working to ensure that the Bureau's operations are conducted in 
a way that best enables the Bureau to fulfill all of the 
Bureau's statutory requirements while reducing redundancy and 
maximizing efficiency. Changes to the structure and operations 
of OFLEO are being implemented in furtherance of these 
priorities. The existing OFLEO performs different functions, 
including oversight and enforcement of fair lending laws on one 
hand, and promotion of fair lending compliance and education on 
the other.
    The reorganization will separate the supervision and 
enforcement functions previously performed by OFLEO from its 
promotion and education functions. The supervision and 
enforcement functions will remain in the division that is 
responsible for supervision and enforcement generally. OFLEO's 
remaining functions will be elevated to the Director's Office 
to become part of an Office of Equal Opportunity and Fairness 
with a focus on advocacy and education, coordination, and 
reporting.
    The changes are designed to create efficiency and 
consistency in the Bureau's supervision and enforcement 
functions, and allow OFLEO to focus on promoting advocacy and 
education, coordination, and reporting. These changes should 
improve the Bureau's operations and our interactions with 
consumers and industry, in fulfillment of our mission, and in 
full compliance with the Bureau's statutory mandate.

Q.32.a. How will bringing the OFLEO under the control of the 
Office of the Director modify the Bureau's decisionmaking 
process with regard to enforcement and other actions to protect 
consumers from unfair discrimination?

Q.32.b. What, if any, continuing role will the OFLEO play in 
supporting the Bureau's enforcement of fair lending laws?

A.32.a.-b. I note that these questions are identical to 
questions I received from Ranking Member Maxine Waters (CA) 
following my testimony before the House Committee on Financial 
Services, regarding the Bureau's Semi-Annual Report. For that 
reason, I am providing you the same response I provided the 
Ranking Member. Additionally, these questions are identical 
questions I received from Ranking Member Sherrod Brown (OH) 
following my testimony before the Senate Committee on Banking, 
Housing, and Urban Affairs, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
will provide to the Ranking Member.
    The reorganization will not hamper the Bureau's fair 
lending
enforcement and supervisory activity; indeed, the 
reorganization should help the Bureau operate more efficiently 
and effectively. In consultation with Bureau stakeholders and 
the National Treasury Employees Union (NTEU) and in accordance 
with the Bureau's
collective bargaining agreement, the Bureau and NTEU have 
signed a memorandum of understanding (MOU) on the 
implementation plan for the reorganization. Full implementation 
of the
reorganization is expected to take a few more months to 
complete. While the Bureau works through the processes required 
to fully implement such a change, OFLEO will continue to 
operate as it has previously. The reorganization of OFLEO will 
elevate OFLEO to the Director's Office to become part of the 
Office of Equal Opportunity and Fairness. OFLEO will continue 
to support the enforcement of fair lending laws through the use 
of advocacy and education, coordination, and reporting.

Q.32.c. How will the reorganization affect the reporting duties 
for OFLEO employees, including the OFLEO Assistant Director?

A.32.c. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Ranking Member Sherrod Brown (OH) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member.
    In consultation with Bureau stakeholders and the NTEU, and 
in accordance with the Bureau's collective bargaining 
agreement, the Bureau and NTEU have signed a MOU on the 
implementation plan for the reorganization. While staff will 
not experience changes in employment status, employees may 
experience changes in jobs and duties. Some OFLEO employees 
will remain in the OFLEO while others will take positions 
throughout the Supervision and Enforcement Division. The OFLEO 
Assistant Director's duties will change insofar as the role 
will focus on advocacy and education, coordination, and 
reporting. We are working diligently to effect these changes 
while minimizing disruption to operations and employees.

Q.32.d. After the reorganization, which officials in the Office 
of the Director will be consulted about OFLEO activities?

Q.32.e. Which of these officials have been hired, politically 
appointed, or detailed to the CFPB since November 24, 2017?

Q.32.f. After the reorganization, which political appointees 
and temporarily detailed employees will be granted veto power 
over OFLEO activities and decisions?

Q.32.g. What criteria will political appointees and temporarily 
detailed employees in the Office of the Director use to 
determine whether the Bureau will follow the recommendations of 
career policy experts in the OFLEO?

Q.32.h. What actions will the Bureau take to ensure that OFLEO 
decisions continue to be based on the best advice of 
independent, expert, career policy staff?

A.32.d.-h. I note that these questions are identical or 
substantially similar to questions I received from Ranking 
Member Maxine Waters (CA) following my testimony before the 
House Committee on Financial Services, regarding the Bureau's 
Semi-Annual Report. For that reason, I am providing you the 
same response I provided the Ranking Member. Additionally, 
these questions are identical or substantially similar to 
questions I received from Ranking Member Sherrod Brown (OH) 
following my testimony before the Senate Committee on Banking, 
Housing, and Urban Affairs, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
will provide to the Ranking Member.
    In consultation with Bureau stakeholders and the NTEU and 
in accordance with the Bureau's collective bargaining 
agreement, the Bureau and NTEU have signed a MOU on the 
implementation plan for the reorganization. Full implementation 
of the reorganization is expected to take a few more months to 
complete. While the Bureau works through the processes required 
to fully implement such a change, OFLEO will continue to 
operate as it has previously.

Q.32.i. How will the new requirements that the OFLEO report to 
the Office of the Director enhance the CFPB's ability to 
protect consumers from unfair discrimination?

A.32.i. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Ranking Member Sherrod Brown (OH) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member.
    The Bureau intends to continue fulfilling its statutory 
obligation to enforce Federal consumer financial laws, which 
include the Equal Credit Opportunity Act (ECOA) and the Home 
Mortgage Disclosure Act (HMDA). The reorganization should 
improve the
Bureau's operations and our interactions with consumers and 
industry, in fulfillment of our mission, and in full compliance 
with
the Bureau's statutory mandate. The Bureau's supervision and 
enforcement of fair lending laws will continue uninterrupted in 
the
existing supervision and enforcement divisions. This will allow 
remaining OFLEO personnel to focus on education, outreach, and 
compliance efforts. OFLEO's previous organizational structure 
placed primary emphasis on ``back-end'' supervision and 
enforcement of fair lending laws, resulting in a focus on 
corrective measures, rather than ``front-end'' promotion of 
education, and coordination of, fair lending efforts.

Q.32.j. Please describe any independent analyses, such as 
third-party studies, that informed the decision to bring OFLEO 
under the Office of the Director and strip OFLEO of its 
enforcement and supervisory authority.

A.32.j. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Senator Ranking Member Sherrod Brown (OH) 
following my testimony
before the Senate Committee on Banking, Housing, and Urban 
Affairs, regarding the Bureau's semiannual report. For that 
reason, I am providing you the same response I will provide to 
the Ranking Member.
    Under the Dodd-Frank Act, the OFLEO ``shall have such 
powers and duties as the Director may delegate to the Office.'' 
I have been working to ensure that the Bureau's operations are 
conducted in a way that best enables the Bureau to fulfill all 
of the Bureau's statutory requirements while reducing 
redundancy and maximizing efficiency. Changes to the structure 
and operations of OFLEO are being implemented in furtherance of 
these priorities.

Q.32.k. Did you or any other CFPB employee consult with or 
discuss this reorganization with any outside entities--
including lobbyists or representatives of the banking or 
financial services industry--prior to announcing the 
reorganization?

A.32.k. I note that this question is identical or substantially 
similar to a question I received from Ranking Member Maxine 
Waters (CA) following my testimony before the House Committee 
on Financial Services, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
provided the Ranking Member. Additionally, this question is 
identical to a question I received from Ranking Member Sherrod 
Brown (OH) following my testimony before the Senate Committee 
on Banking, Housing, and Urban Affairs, regarding the Bureau's 
semiannual report. For that reason, I am providing you the same 
response I will provide to the Ranking Member.
    No, I did not consult, nor am I aware of any Bureau 
employee discussing, the reorganization outside of the Bureau.

Q.32.l. Did you consult with other officials, employees, or 
political appointees at OMB or the White House about the OFLEO 
reorganization prior to its announcement?

A.32.l. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is identical to a question 
I received from Ranking Member Sherrod Brown (OH) following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member.
    Office of Management and Budget (OMB) detailees to the 
Bureau were, as a matter of course, part of the discussion, but 
no other employees at OMB or the White House were consulted.

Q.32.m. Is the CFPB considering any substantive changes to its 
approach to the enforcement of fair lending laws, including 
changes to the CFPB's interpretation of these laws?

A.32.m. I note that this question is identical or substantially 
similar to a question I received from Ranking Member Maxine 
Waters (CA) following my testimony before the House Committee 
on Financial Services, regarding the Bureau's Semi-Annual 
Report. For that reason, I am providing you the same response I 
provided the Ranking Member. Additionally, this question is 
identical substantially similar to a question I received from 
Ranking Member Sherrod Brown (OH) following my testimony before 
the Senate Committee on Banking, Housing, and Urban Affairs, 
For that reason, I am providing you the same response I will 
provide to the Ranking Member. The Bureau intends to continue 
fulfilling its statutory obligation to enforce Federal consumer 
financial laws, which include the Equal Credit Opportunity Act 
(ECOA) and the Home Mortgage Disclosure Act (HMDA). As you may 
be aware, the Bureau issued a statement on the passage of the 
Congressional Review Act resolution disapproving a bulletin 
titled ``Indirect Auto Lending and Compliance with the Equal 
Credit Opportunity Act,'' which had provided guidance about the 
ECOA and its implementing regulation, Regulation B. Consistent 
with the joint resolution, the guidance has no force or effect. 
The ECOA and Regulation B are unchanged and remain in force and 
effect. As I noted in that statement, I want to make it 
abundantly clear that the Bureau will continue to fight 
unlawful discrimination at every turn. We will vigorously 
enforce fair lending laws in our jurisdiction, and will stand 
on guard against unlawful discrimination in credit. However, 
given this recent Congressional action, the Bureau will be 
reexamining the requirements of ECOA in light of relevant 
Supreme Court precedents.
    In addition, on August 31, 2018, the Bureau issued an 
interpretive and procedural rule \3\ to implement and clarify 
the requirements of section 104(a) of the Economic Growth, 
Regulatory Relief, and Consumer Protection Act (the Act), which 
amended the HMDA. The Bureau also released updates to the 
Filing Instructions Guide (FIG) for HMDA data collected in 2018 
to incorporate the Act as implemented and clarified by the rule 
issued that day.
---------------------------------------------------------------------------
    \3\ https://files.consumerfinance.gov/f/documents/
bcfp_hmda_interpretive-procedural-rule_
2018-08.pdf.
---------------------------------------------------------------------------
    The Act contains provisions that are intended to decrease 
the burden smaller depository institutions face in complying 
with HMDA and its implementing regulation, Regulation C. Some 
such institutions have raised questions about the application 
of the Act, and the rule issued in August seeks to provide 
clarification. At a later date, the Bureau anticipates that it 
will initiate a notice-and-comment rulemaking to incorporate 
these interpretations and procedures into Regulation C and 
further implement the Act.

Q.33. Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act establishes the CFPB to administer and interpret 
Dodd-Frank's prohibition on unfair, deceptive and abusive acts 
or practices. The Act instructs the Bureau to supervise 
nonbanks that are large participants of a market for consumer 
financial products or services, which includes Federal student 
loan servicers and debt collectors.\4\
---------------------------------------------------------------------------
    \4\ 12 U.S.C.  5481(5),(15); 12 U.S.C.  5514(a)(1)(B); 12 C.F.R. 
 1090.106; 12 C.F.R.  1090.105.
---------------------------------------------------------------------------
    Will the CFPB continue to supervise Federal student loan 
servicers and debt collectors?

A.33. To the extent that a Federal student loan servicer or 
debt collector meets the criteria contained in the Bureau's 
larger participant rules, the entity should be included in the 
Bureau's supervision prioritization process. Whether any given 
entity is subject to a supervision event in any given time 
period is based on a number of factors, including the potential 
for consumer harm related to a particular market, the size of 
the product market, the supervised entity's market share, and 
the risks inherent to the supervised entity's operations and 
offering of financial consumer products within that market.

Q.34. The U.S. Department of Education does not have the 
statutory authority to enforce the Dodd-Frank Act's prohibition 
on
unfair, deceptive and abusive acts or practices. Do you believe 
CFPB has the statutory authority to enforce the Dodd-Frank 
Act's prohibition on unfair, deceptive and abusive acts or 
practices if the violations are committed by Federal student 
loan servicers, debt
collectors, or other Department of Education contractors?

A.34. The Bureau has taken the position that Federal student 
loan servicers and debt collectors meet the definition of 
covered person under the CFPA. Whether other Department of 
Education contractors also meet the definition will depend on 
the activity in which each contractor engages.

Q.35. Earlier this year, you informed the National Association 
of Attorneys General that you will be relying on the State law 
enforcement community to perform much of the routine 
investigation and oversight over participants in the markets 
you regulate. Specifically, you said, ``We're going to be 
looking to the State regulators and the States' attorneys 
general for a lot more leadership when it comes to 
enforcement.''\5\
---------------------------------------------------------------------------
    \5\ https://www.americanbanker.com/news/ags-not-cfpb-should-take-
greater-role-on-enforcement-mulvaney.
---------------------------------------------------------------------------
    Does this principle extend to State-level oversight of 
student loan companies, including student loan servicers?

A.35. My remarks were an expression of my eagerness to 
coordinate the Bureau's efforts with the State attorneys 
general. One
example of this coordination is the joint town hall I held on 
June 8, 2019, with Kansas Attorney General Derek Schmidt on 
fighting elder financial exploitation. The Bureau held a second 
town hall on October 18, 2018, with Louisiana Attorney General 
Jeff Landry. I am also eager to coordinate the Bureau's efforts 
with Federal departments and agencies, including the Department 
of Education.

Q.36. CFPB's proposed Student Loan Market Monitoring 
initiative, published in the Federal Register on September 8, 
2017 (F.R. 2017-18776) pursuant to the Bureau's authority under 
Section 1022(c)(4) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, proposes ``quarterly data collection 
on aggregated student loan servicing metrics and borrower 
outcomes from student loan servicers.''
    Please provide an update on the status of this initiative.

A.36. In accordance with the Paperwork Reduction Act of 1995 
(PRA), the Bureau published two notices in the Federal Register 
soliciting comment on a new proposed information collection--
the ``Student Loan Servicing Market Monitoring'' project. The 
collection was submitted to the Office of Management and Budget 
(OMB) and the second notice was published in the Federal 
Register on September 6, 2017. The comment period for this 
notice closed on October 6, 2017.
    As of October 6, 2017, OMB had received six comments. As of 
October 19, 2018, the information and collection request is 
still pending at OMB.

Q.37.a. CFPB's proposed Student Loan Market Monitoring 
initiative requires approval from the Office of Management and 
Budget in order to precede.
    Given your role as the head OMB, please provide a detailed 
explanation as to why this data collection has yet to be 
implemented.

A.37.a. The Bureau of Consumer Financial Protection submitted 
an information collection request to OMB on ``Student Loan 
Servicing Market Monitoring'' under the Paperwork Reduction Act 
on September 6, 2017. The request is still under review by 
OIRA.

Q.37.b. Please provide any memoranda, reports, analysis, or 
correspondence prepared by any of the following parties related 
to proposed Student Loan Market Monitoring following the 
closing of the public comment period on October 8, 2017:

   LThe Office of Management and Budget,

   LThe U.S. Department of Education, and

   LThe Consumer Financial Protection Bureau.

A.37.b. The requested documents, if any exist, would include 
the confidential information of the Bureau or other Federal 
agencies, and therefore would not be appropriate to submit into 
the public record. I urge you to work with the Committee 
Chairman when submitting requests for confidential Bureau 
information.

Q.38. Earlier this year, you provided CFPB staff with a 
memorandum indicating that you intend to use data, including 
data on consumer complaints, to inform Bureau priorities, 
including rulemaking, supervision, and enforcement.\6\ The 
Bureau has received more than 60,000 student loan complaints 
since 2012 and student loan companies are routinely among the 
most complained about financial services companies you 
regulate. Navient was also the subject of more CFPB complaints 
than any other company in the country during the first quarter 
of 2017, including Wells Fargo, Equifax, and other national 
banks and credit unions.
---------------------------------------------------------------------------
    \6\ https://www.consumerfinancemonitor.com/wp-content/uploads/
sites/14/2018/01/Mulvaney-memo.pdf.

Q.38.a. As student loan defaults continue to set new records 
each year, what steps is CFPB taking to address unfair, 
deceptive, or abusive acts or practices in Federal and private 
---------------------------------------------------------------------------
student lending that exacerbate the default crisis?

A.38.a. The Bureau continues to assess compliance with Federal 
consumer financial law with respect to student loan servicers, 
including the prohibition against unfair, deceptive, and 
abusive acts or practices, and can bring enforcement actions 
where appropriate.

Q.38.b. How will complaints from borrowers inform this work?

A.38.b. The Bureau uses complaints from borrowers to, among 
other things, prioritize exam work, scope exams, and to 
determine whether to open investigations.

Q.39. As Director of OMB, you're responsible for overseeing and 
managing the costs associated with the U.S. Department of 
Education's student loan servicing and collections contracts, 
while the Bureau is simultaneously responsible for 
independently policing the companies contracted to perform 
these servicing and collections functions when they violate 
Federal consumer protection law. These separate 
responsibilities are in conflict.

Q.39.a. What steps have you taken to insulate the Bureau's 
oversight of student loan companies from the Administration's 
political or policy direction on the administration of the 
Education Department's contracts?

A.39.a. There is no conflict in my responsibilities. The Bureau 
coordinated with the Education Department in the prior 
Administration and we will continue to collaborate going 
forward. The Bureau will act consistently with its obligation 
to enforce the law.

Q.39.b. How do you plan to ensure that your duty as OMB 
Director to protect taxpayers' investment in Federal loan 
servicing contractors does not compromise your obligation at 
CFPB to fairly and independently administer Federal consumer 
protection laws with respect to these companies?

A.39.b. As I noted above, there is no conflict in my 
responsibilities.

Q.40. Dodd-Frank Act Section 1035(c) establishes the functions 
of the student loan ombudsman and states that the ombudsman 
shall resolve complaints ``in collaboration with the Department 
of Education and with institutions of higher education, 
lenders, guaranty agencies, loan servicers, and other 
participants in private education loan programs.'' Dodd-Frank 
Act Section 1035(c) also requires the ombudsman to establish a 
memorandum of understanding with the Department of Education's 
student loan ombudsman ``to ensure coordination in providing 
assistance to and serving borrowers seeking to resolve 
complaints related to their private education or Federal 
student loans.''\7\
---------------------------------------------------------------------------
    \7\ 12 U.S.C.  5535.

Q.40.a. Given the U.S. Department of Education's August 2017 
decision to terminate existing memoranda of understanding 
between the CFPB and the Education Department, how does the 
CFPB plan to collaborate with the Education Department to 
---------------------------------------------------------------------------
resolve student complaints related to Federal student loans?

A.40.a. The Department of Education continues to have access to 
the Bureau's public complaint database. Bureau staff also 
continues to analyze complaint data and provide that analysis 
as technical assistance when requested by the Department of 
Education.

Q.40.b. Will CFPB comply with Dodd-Frank Act Section 1035(c) 
and establish a new memorandum of understanding with the 
Education Department?

A.40.b. The Bureau continues to pursue options for entering 
into a new MOU with the Department of Education. The statutory 
function you described formally rests with the Private 
Education Loan Ombudsman.

Q.40.c. In accordance with Dodd-Frank Act Section 1035(c) 
requirement to ``ensure coordination'' with the Department of 
Education ``in providing assistance to and serving borrowers 
seeking to resolve complaints related to their private 
education or Federal student loans,'' how will the CFPB work 
with the Department of Education to resolve complaints related 
to borrowers' Federal student loans?

A.40.c. As noted in a previous response, the Bureau continues 
to pursue options for entering into a new MOU with the 
Department of Education. In the absence of an MOU, the 
Department of Education continues to have access to the 
Bureau's public complaint database. Bureau staff also continues 
to analyze complaint data and provide that analysis as 
technical assistance when requested by the Department of 
Education.

Q.40.d. If CFPB plans to refer complaints to the Education 
Department, how will CFPB ensure that such complaints are fully 
resolved after referral?

A.40.d. Bureau staff directs consumers with student loan 
origination complaints to contact the Department of Education 
and relies on the Department of Education to appropriately 
resolve the complaint. The Department of Education also has 
access to the Bureau's public complaint database. If the 
Bureau's Private Education Loan Ombudsman is able to enter into 
a new MOU with the Department of Education permitting complaint 
referral, the Bureau will rely on the Department of Education 
to appropriately resolve any referred complaints.

Q.40.e. If CFPB plans to refer complaints to the Education 
Department, how will complaint substance and volume inform the 
Bureau's student loan enforcement and supervision as it relates 
to Federal student loan contractors?

A.40.e. The Bureau's Office of Consumer Response (Consumer 
Response) analyzes consumer complaints, company responses, and 
consumer feedback to accomplish two primary goals. First, these 
analyses enable Consumer Response to assess the accuracy, 
completeness, and timeliness of company responses. Second, 
these analyses ensure that the Bureau, other regulators, 
consumers, and the marketplace have reliable and useful 
information about consumer financial products and services. 
Consumer Response uses a variety of approaches to analyze 
consumer complaints, including cohort and text analytics, to 
identify trends and possible consumer harm. The Bureau also 
shares consumer complaint information with prudential 
regulators, the Federal Trade Commission, other Federal 
agencies, and State agencies.\8\
---------------------------------------------------------------------------
    \8\ Id.  5493 (b)(3)(D).

Q.40.f. Will CFPB continue to produce its monthly complaint 
snapshot highlighting consumer complaints about student loans, 
---------------------------------------------------------------------------
including Federal student loans?

A.40.f. One of the primary functions of the Bureau is 
collecting, investigating, and responding to consumer 
complaints. Consumer Response hears directly from consumers 
about the challenges they face in the marketplace, brings their 
concerns to the attention of companies, and assists in 
addressing their complaints. On May 31, 2018, the Bureau 
published a Complaint Snapshot that provides a high-level 
overview of trends in consumer complaints and supplements the 
Consumer Response Annual Report with more recent
information about monthly changes in complaint volume and a
spotlight on debt collection. On October 23, 2018, the Bureau 
published a complaint snapshot that provides a high-level 
overview of trends in consumer complaints and supplements the 
Consumer Response Annual Report with more recent information on 
complaints about consumer financial products and services by 
State.\9\
---------------------------------------------------------------------------
    \9\ https://www.consumerfinance.gov/documents/6568/bcfp_complaint-
snapshot_debt-collection_052018.pdf.

Q.40.g. Will CFPB continue to include Federal student loan 
---------------------------------------------------------------------------
complaints in its consumer complaint database?

A.40.g. The Bureau published a Request for Information (RFI) in 
March 2018 seeking comments and information from interested 
parties to assist the Bureau in assessing potential changes 
that can be implemented to the Bureau's public reporting 
practices of consumer complaint information.\10\ The comment 
period closed June 4, 2018. The Bureau is evaluating comments 
received before determining whether any changes to the 
reporting or publication practices would be appropriate.
---------------------------------------------------------------------------
    \10\ https://www.consumerfinance.gov/policy-compliance/notice-
opportunities-comment/open-notices/request-information-regarding-
bureau-public-reporting-practices-consumer-complaint-information/.

Q.41.a. How much does the CFPB intend to request in transfers 
from the Federal Reserve for the remaining two quarters of the 
---------------------------------------------------------------------------
fiscal year?

A.41.a. The Bureau requested $98.5 million for the third 
quarter, and $65.7 million for the fourth quarter of fiscal 
year (FY) 2018.

Q.41.b. How much of the reserve remains?

A.41.b. The Bureau ended Fiscal Year (FY) 2018 with $56 million 
in unobligated balances in the Bureau Fund.

Q.41.c. The Office of Management and Budget's FY 2019 budget 
request asks for $545 million for the CFPB. Does CFPB intend to 
request transfers from the Fed consistent with the budget 
request in the coming fiscal year?

A.41.c. The transfer cap for FY 2019 is $678.9 million. 
However, the Bureau plans to request no more than $533 million 
in FY 2019 to support the FY 2019 budget that I approved. A 
summary of the Bureau's FY 2019 budget was included with the 
transfer request letter sent to the Federal Reserve Board for 
funding for the first quarter of 2019, which is available on 
the Bureau's website at https://www.consumerfinance.gov/about-
us/budget-strategy/funds-transfer-requests/.

Q.41.d. Please list any multi-year contracts or projects that 
were started prior to FY 2018 for which payment will be due in 
subsequent fiscal years and the amount and timing of those 
payments.

A.41.d. As defined by the Federal Acquisition Regulation (FAR 
17.103), the Bureau has not awarded any multi-year contracts. 
The FAR's definition of a multi-year contract is `` . . . a 
contract for the purchase of supplies or services for more than 
1, but not more than 5, program years.''

Q.41.e. How much does CFPB pay annually in rent for its 
headquarters and for each regional office?

A.41.e. The FY 2018 rental payments for the Bureau's space are 
in the below table. Several spaces were terminated in FY 2018 
as a result of the completion of the renovations to the 
Bureau's headquarters.

Location                                           Annual Rent
                                                    $ amount

1275 Ist Street NE, Washington, DC             $822,412
(rent terminated)

1990 K Street NW, Washington, DC                   $2,156,284

1801 F Street NW, Washington, DC                    $358,959
(Temporary space for child care;
rent terminated in FY 2018)

230 S. Dearborn St., Chicago, IL                        
$492,598

140 East 45th St., New York, NY                      $1,190,940

30 I Howard St., San Francisco, CA                    
$1,376,681

1700 G Street NW, Washington, DC                  $13,094,110

Total Fiscal Year 2018 Rent Payments                $19,491,984

Q.42.a. You have said repeatedly that you intend to cut CFPB's 
budget by 30 percent.
    Please describe the process the Bureau intends to use to 
develop it budget and make spending decisions for the next 
year,

A.42.a. In May 2018, the Bureau began the process of revising 
its budget estimates for FY 2019 and developing estimates for 
FY 2020. Each Division had an opportunity to request and 
justify funds to help the Bureau meet its priorities.

Q.42.b. Who will make the final decisions?

A.42.b. The Bureau's Director approves the Bureau's budget.

Q.42.c. What role will political appointees at the agency play 
in the budget process, particularly the so-called ``PADs,'' the 
Chief of Staff, and Senior Adviser Brian Johnson?

A.42.c. Through the budget process, the Policy Associate 
Directors and Associate Directors identified amounts necessary 
to carry out the Bureau authorities and to meet the Bureau's 
priorities for FY 2019-2020.

Q.42.d. What role will CFO Eli Reilly and the rest of the 
career staff in her office play in the budget process?

A.42.d. The budget process is led by the Office of the Chief 
Financial Officer (OCFO).

Q.42.e. What role will CSO Dave Uejio and the rest of the 
career staff in his office play in the budget process?

A.42.e. The budget reflects the Bureau's priorities, as 
identified in the Bureau's Strategic Plan, which is developed 
under the guidance of the Office of Strategy.

Q.42.f. What role will the career Associate Directors play in 
making budget recommendations for their divisions?

A.42.f. Through the budget process, the Policy Associate 
Directors and Associate Directors identified amounts necessary 
to carry out the Bureau authorities and to meet the Bureau's 
priorities for FY 2019-2020.

Q.43.a. Employee compensation and benefits are CFPB's biggest 
budget line item.
    Will CFPB initiate a reduction in force under its 
collective bargaining agreement and lay off employees to meet 
its aggressive budget targets?

A.43.a. If the Bureau were to initiate a reduction in force, it 
would do so consistent with applicable law, regulation, and the 
Collective Bargaining Agreement (CBA).

Q.43.b. Will CFPB seek to renegotiate the compensation and 
benefits chapters of its collective bargaining agreement?

A.43.b. If the Bureau were to seek to renegotiate these 
chapters, it would do so consistent with the CBA. The current 
Compensation article of the CBA with the National Treasury 
Employees Union (NTEU) does not expire until December 31, 2019. 
This agreement generally covers employee salaries and benefits. 
The Bureau and NTEU will begin negotiating any changes to the 
Compensation article in June 2019.

Q.44. In early December, you announced a freeze in CFPB's 
collection of personally identifiable information (PII). Is 
that freeze still ongoing?

A.44. On May 31, 2018, after an exhaustive review by outside 
experts, including a comprehensive ``white-hat hacking'' 
effort, I lifted that hold. The independent review concluded 
that ``externally facing Bureau systems appear to be well-
secured.'' The assessors identified no ``Critical'' findings 
and made only three technical recommendations, all of which the 
Bureau has completed remediating.

Q.45. Prior to November 24, what were CFPB's plans to address 
the recommendations provided by its Inspector General in its 
FISMA report?

A.45. The Bureau's original plans to address the 
recommendations made in the 2017 Office of the Inspector 
General's Federal Information Security Modernization Act Audit 
report are described in that final report under ``Appendix B: 
Management's Response'' dated October 27, 2017. These actions 
include defining organizational risk tolerance levels, 
enhancements to multifactor authentication, validation of 
contractors' background checks, conducting periodic phishing 
exercises, continued log collection for new systems, 
development of additional incident containment strategies, and 
integrating contingency plan tests with those of incident 
response and continuity of operations. Since the report, the 
Bureau has closed the recommendations related to validation of 
contractors' background checks, development of additional 
incident
containment strategies, and integrating contingency plan tests 
with those of incident response and continuity of operations.

Q.45.a. Why did you make additional changes to these plans?

A.45.a. These plans were not changed, they are still active 
efforts that the Bureau is undertaking. I bolstered the 
Bureau's cybersecurity efforts with additional protective 
measures appropriate to the sensitivity of data with which the 
Bureau works.

Q.45.b. Why did you believe these measures were insufficient?

A.45.b. The Bureau works with consumer and financial data that 
deserve our best efforts to protect and use in a manner 
consistent with applicable laws, regulations, and Federal 
security guidelines. This additional effort is intended to 
protect these resources by effectively managing risk and 
operational capability.

Q.45.c. What steps did you take to evaluate additional options?

A.45.c. On my first day at the Bureau, I met with the Chief 
Information Officer (CIO) and Chief Information Security 
Officer (CISO) to discuss the topic of cybersecurity. That 
initial discussion and follow-on planning identified an 
opportunity to leverage an independent party to assess the 
Bureau's cybersecurity posture. Since that time, the Bureau has 
entered into an Inter-Agency Agreement with the Department of 
Defense to leverage ``Risk and Vulnerability Assessment (RVA)'' 
services as a mechanism to identify potential gaps in 
cybersecurity controls. This Assessment has completed and the 
Bureau has remediated all recommendations identified in the 
final report.

Q.45.d. What specific changes in examination or enforcement 
procedures related to cybersecurity were implemented in the 
Division of Supervision, Enforcement, and Fair Lending program 
in the aftermath of the December 4th announcement, and what 
were the impacts of these changes?

A.45.d. After December 4, 2017, the Division of Supervision, 
Enforcement, and Fair Lending (SEFL) ceased intaking certain 
sensitive information, such as data with direct personal 
identifiers. Enforcement attorneys were conducting review of 
most investigative materials by storing those materials on a 
system used by the U.S. Department of Justice (DOJ). 
Supervision did not take data with direct personal identifiers 
onto the Bureau's systems, and instead reviewed it onsite.

Q.45.e. Please provide copies of any guidance given to 
supervision or enforcement staff about changes in examination 
procedures.

A.45.e. The attached guidelines on collections of information 
through supervision available to examiners was used during the 
data hold. This guidance has since been rescinded.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.45.f. Please describe any changes to procedures for obtaining 
and reviewing records in discovery precipitated by your 
December 4th announcement.

A.45.f. No procedures have been formally amended. Where 
possible, information subject to the data security policy was 
hosted on a system used by the DOJ.

Q.45.g. Please provide copies of any communications with 
regulated entities related to providing personally identifiable 
information to bank examiners and enforcement lawyers.

A.45.g. Communications between supervised entities and 
examination staff are generally considered confidential 
supervisory information, and communications between entities 
and enforcement staff in connection with an investigation are 
generally considered confidential investigative information. 
The Bureau typically does not make public this type of 
confidential information. For our guidance to examiners, 
including on communicating with entities, see response to 
subpart (E) above.

Q.45.h. Please provide copies of all emails sent or received by 
you, Brian Johnson, Eric Blankenstein, Christopher D'Angelo, 
Patrice Ficklin, Paul Sanford, Peggy Twohig, Kristen Donoghue, 
Sartaj Alag, or Jerry Horton about policies related to the 
acquisition of personally identifiable information from 
November 24 to present.

A.45.h. The requested documents would include documents that 
contain confidential Bureau information and it would not be 
appropriate to submit into the public record. I urge you to 
work with the Committee Chairman when submitting requests for 
confidential Bureau information.

Q.45.i. Did you evaluate the impact of the new procedures on 
CFPB supervision and enforcement activities prior to ordering 
and implementing them? If so, what did this evaluation show?

A.45.i. I determined that the benefits of protecting consumers' 
privacy outweighed the cost of potentially slowing enforcement 
and supervisory activities.

Q.45.j. Were any Bureau functions outside the Division of 
Supervision, Enforcement and Fair Lending impacted?

A.45.j. Yes.

Q.45.k. Are there any plans to alter the consumer complaint 
process?

A.45.k. In April, the Bureau issued a Request for Information 
(RFI) on its handling of consumer complaints and inquiries.\11\ 
We sought comments and information from interested parties to 
assist the Bureau in assessing its handling of consumer 
complaints and consumer inquiries and, consistent with law, 
considering whether changes to its processes would be 
appropriate. The opportunity to submit comments on this RFI 
closed on July 16, 2018. Bureau staff is in the process of 
reviewing the more than 1,000 comments received.
---------------------------------------------------------------------------
    \11\ https://www.federalregister.gov/documents/2018/04/17/2018-
07943/request-for-information-regarding-the-bureaus-consumer-complaint-
and-consumer-inquiry-handling.

Q.45.l. Are there any plans to alter how the Research, Markets, 
---------------------------------------------------------------------------
and Regulation division obtains or uses consumer data?

A.45.l. The Bureau is reviewing how all divisions obtain and 
use data. In September, the Bureau released a report on the 
Bureau's data governance program, what data the Bureau 
collects, where the data come from, how data are used, and how 
data are reused within the Bureau.

Q.45.m. Are there any plans to alter internal operations in the 
CFPB with respect to how the agency uses or deploys employees' 
personally identifiable information?

A.45.m. There are no plans to alter internal BCFP operations 
regarding how the agency uses or deploys employees' personally 
identifiable information.

Q.45.n. Did you consult with the CFPB Inspector General before 
instituting your PII freeze?

A.45.n. No.

Q.45.o. Did CFPB consult any other agency before instituting 
the PII freeze?

A.45.o. No.

Q.45.p. Did you consult any other cyber security expert before 
instituting the PII freeze?

A.45.p. No.

Q.45.q. Did CFPB consult with any lobbyist or other individual 
representing any financial services firm or other regulated 
entity before instituting the PII freeze?

A.45.q. No.

Q.46.a. You testified that the CFPB is in the process of 
completing an analysis of the agency's cybersecurity 
vulnerabilities.
    Please describe the scope of the review and how it is being 
conducted.

A.46.a. In January of 2018, the Bureau signed an Inter-Agency 
Agreement with the U.S. Department of Defense to leverage 
``Risk and Vulnerability Assessment (RVA)'' services as a 
mechanism to identify potential gaps in cybersecurity controls. 
This service is the same service the U.S. Department of 
Homeland Security (DHS) provides to other Federal agencies to 
assess vulnerabilities beyond those identified in their Cyber 
Hygiene program (in which the Bureau also participates).

Q.46.b. What is the specific goal of the review?

A.46.b. This technical assessment had two primary dimensions, 
to determine the susceptibility of the Bureau's systems from an 
external threat and also an assessment of vulnerability within 
the Bureau's network. Four specific scenarios were tested:

   LExternal testing of Cloud Service providers and 
        publicly accessible servers;

   LUser susceptibility to phishing attacks from 
        external sources;

   LTesting of security controls applied to a mobile 
        device (laptops, mobile devices, and standard-issue 
        encrypted USB storage devices); and

   LDetermining the potential impact of an attacker 
        with access to the internal network, to include Wi-Fi 
        testing.

Q.46.c. Which CFPB personnel are involved?

A.46.c. The Office of Technology and Innovation, headed by the 
Chief Information Officer (CIO), coordinated execution of the 
testing. The Acting Chief Information Security Officer 
performed the role of Technical Point of Contact for the 
testing team.

Q.46.d. Which other agencies are involved?

A.46.d. This service is provided under an interagency agreement 
(IAA) with the U.S. Department of Defense under a contract 
administered by the Air Force with the Software Engineering 
Institute at Carnegie Mellon University, which is a federally 
Funded Research and Development Center (FFRDC).

Q.46.e. Which private companies or individuals representing 
private companies are involved?

A.46.e. This service is performed by personnel from the 
Software Engineering Institute at Carnegie Mellon University.

Q.46.f. How much is the review expected to cost?

A.46.f. The cost to execute the interagency agreement was 
$448,580.

Q.46.g. How long is it projected to last?

A.46.g. The independent review has concluded.

Q.46.h. How much has CFPB spent each year on cybersecurity 
measures in each of the last 5 years?

A.46.h.

   LFY 2014: $4,158,893

   LFY 2015: $6,240,950

   LFY 2016: $7,303,500

   LFY 2017: $8,521,892

   LFY 2018: $7,778,994

Q.47.a. Shortly after arriving at the CFPB, you announced that 
you intended to hire political appointees ``now,'' because 
career staff that were hired before your arrival were 
``political anyway.''
    How did you know the political affiliations of CFPB career 
staff?

A.47.a. I do not know the party affiliations of individual 
employees.

Q.47.b. Did you ask CFPB staff for their political affiliation?

A.47.b. No.

Q.47.c. In hiring civil servants and making decisions about 
individuals' responsibilities, do you or your designees employ 
a political or ideological litmus test?

A.47.c. No.

Q.47.d. Before bringing political appointees to the CFPB, did 
anybody at the agency analyze whether any other independent 
agency have a similar structure where a political appointee 
oversees each division?

A.47.d. The Bureau hired individuals under Schedule C of the 
excepted service, which is authorized by governmentwide Office 
of Personnel Management (OPM) regulations, including 
independent regulatory agencies.

Q.47.e. Please provide the justifications sent to OPM in 
support of each request CFPB made for authority to hire 
political staff.

A.47.e. The Bureau followed the Schedule C appointment approval 
process established by the Office of Personnel Management, 
which requires agencies to submit a completed 1019 Form. The 
Bureau's 1019 Forms are attached.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.47.f. In a recent letter, the CFPB told me that the agency 
currently employs eight political appointees, excluding you and 
several political detailees from other agencies.

A.47.f. As of October 23, 2018, the Bureau employs or has 
employed 12 Schedule C political appointees and 7 detailees on 
political appointments from other agencies (including the 
Acting Director). Three of the 12 Schedule C political 
appointees held a detail position at the Bureau prior to their 
Schedule C appointment (noted in the table below).
    Table A below provides the names, types of appointment, and 
position titles for each appointee.
Table A--List of Bureau Schedule C Political Appointees and Detailees 
        as of October 23, 2018
        
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Q.47.g. Are there plans to hire more political appointees?

A.47.g. Yes.

Q.47.h. Please provide the position descriptions and salary 
bands for the all political appointees and most senior career 
staffer they supervise, where applicable, including for 
political positions that have not yet been filled.

A.47.h. Table B--Political appointees as of October 23, 2018:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Table C--Career staff supervised by political appointees as 
of October 23, 2018: Career
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The remaining Schedule C Political appointees do not have 
supervisory responsibilities.
    Attached are the following position descriptions:

1. Principal Policy Director

2. Chief of Staff

3. Policy Associate Director (Supervision, Enforcement, and 
Fair Lending)

4. Policy Associate Director (Consumer Education and 
Engagement)

5. Policy Associate Director (Research, Markets, and 
Regulations)

6. Policy Associate Director (External Affairs)

7. Chief Communications Officer

8. Attorney-Advisor

9. Executive Assistant

10. Executive Assistant

11. Associate Director, Supervision, Enforcement and Fair 
Lending

12. Associate Director, Consumer Education and Engagement

13. Associate Director, Research, Markets, and Regulations

14. Associate Director, External Affairs

15. Associate Director, Legal Division (General Counsel)

16. Associate Director, Office of Equal Opportunity and 
Fairness

17. Assistant Director, Office of Innovation

18. Ombudsman

19. Assistant Director, Office of Civil Rights

20. Disability Compliance Program Manager

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.47.i. Please indicate who was performing the duties included 
in their position description before political appointee was 
hired.

A.47.i. The table below shows the Schedule C political 
positions that were previously performed by career employees. 
The remaining Schedule C political appointees are on newly 
created position descriptions.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.47.j. In a recent letter, the CFPB told me that the agency 
has employed five political appointees from other agencies as 
reimbursable detailees.

A.47.j. There are currently four active political appointees 
from the Office of Management and Budget, on reimbursable 
details, including the Acting Director (see Table A above). The 
terms and conditions of the details for James Galkowski, Mark 
Paoletta, and Michael Williams, are covered by Memoranda of 
Understanding (MOU) entered into by the participating agencies.

Q.47.k. Please provide position descriptions for each of these 
detailees.

A.47.k. The attached MOUs are for James Galkowski, Mark 
Paoletta, and Michael Williams. The MOUs include a brief 
description of the type of work for each detailee at the 
Bureau.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.47.l. Please indicate who was performing the duties included 
in their position description before the detailee was hired at 
the bureau.

A.47.l. Detailees are not placed on position descriptions. The 
duties being performed by the detailees are described in the 
applicable MOU.

Q.47.m. Please list how much CFPB is paying to each of these 
detailees' salary.

A.47.m. The Bureau has agreed to reimburse each political 
appointee detailee's home agency for a proportional share of 
their salary according to each detailee's expected schedule of 
work at the Bureau. The specific amounts reimbursed to each 
agency for the expected duration of the detail are as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Q.47.n. What is your salary?

A.47.n. My salary is $199,700.

Q.47.o. How much is paid by the CFPB?

A.47.o. The Bureau reimburses the Office of Budget and 
Management for a proportional share of my salary and benefits. 
The specific amount to be reimbursed based on my expected 
schedule of work through September 30, 2018, is $102,869.

Q.48.a. Other than the CFPB, there are four other Federal 
banking regulatory agencies: the OCC, the Federal Reserve, the 
FDIC, and the NCUA.
    Are any of these other banking regulatory agencies funded 
through the congressional appropriations process?

A.48.a. No, these agencies are prudential regulators. As you 
know, the Bureau is not a prudential regulator. Congress 
specifically conceived of the Bureau as a product regulator, 
like the Consumer Product Safety Commission (CPSC). Product 
regulators, like the CPSC, FTC, SEC, and CFTC are all 
appropriated.

Q.48.b. Are ``major'' rules issued by any of these other 
banking regulatory agencies subject to congressional approval 
before they take effect?

A.48.b. No. The Bureau is uniquely unaccountable by design, and 
therefore requires additional statutory mechanisms to ensure 
the responsible exercise of its considerable power. I am 
puzzled by Members of Congress who have no apparent interest in 
overseeing the exercise of their delegated legislative 
authority.

Q.49. Since the CFPB was created by Congress, how many reports 
relating to the CFPB has the Federal Reserve's Inspector 
General issued?

A.49. As of November 13, 2018, the Office of the Inspector 
General has issued 66 reports on the Bureau containing 246 
recommendations. I believe the Bureau would be well served by 
an independent inspector general, specifically focused on the 
Bureau's operations.

Q.50. The CFPB Director must testify before Congress four times 
a year. Are the heads of the OCC, FDIC, and NUCA subject to a 
similar requirement?

A.50. In point of fact, the Dodd-Frank Act requires the Bureau 
Director to appear before Congress, but not specifically to 
testify. I made this observation when I voluntarily testified. 
Perhaps we can agree that this is one provision of Title X of 
the Dodd-Frank Act in need of amendment.

Q.51. The CFPB's rules may be vetoed by the Financial Stability 
Oversight Council (FSOC). Are rules issued by any of the other 
banking regulators subject to an FSOC veto?

A.51. No, however, the threshold for a set-aside of a Bureau 
rule under Section 1023 is so high that it provides no 
meaningful restriction on the Bureau's rulemaking discretion.

Q.52. What caused you to reverse your prior position that only 
Congress has the ability to delay or reverse the CFPB Payday 
Rule?

A.52. I did not reverse my position. Congress may disapprove a 
Bureau rule under the Congressional Review Act, as it did with 
the Bureau's arbitration rule. I support Congressional 
oversight of the exercise of its delegated legislative 
authority. The Bureau may also amend or repeal its rules, 
consistent with applicable law.

Q.52.a. Please provide a list of CFPB personnel and OMB 
personnel who provided legal advice with respect to the Payday 
Rule prior to December 4, 2017, and a summary of the advice 
they provided.

A.52.a. In light of the contemplated rulemaking, it would not 
be appropriate to disclose legal advice received related to the 
Payday Rule. The requested information would include 
confidential Bureau information that would not be appropriate 
to submit into the public record. I urge you to work with the 
Committee Chairman when submitting requests for confidential 
Bureau information.

Q.52.b. Please provide a list of all the meetings where you, 
Kirsten Mork, Emma Doyle, Eric Blankenstein or Brian Johnson 
were present and the Payday Rule was discussed, including the 
date, time, and other attendees at the meeting, and a summary 
of the content of those meetings.

A.52.b. The requested information would include confidential 
Bureau information that would not be appropriate to submit into 
the public record. I urge you to work with the Committee 
Chairman when submitting requests for confidential Bureau 
information. My calendar is available for review on the 
Bureau's website.

Q.52.c. What analysis did the CFPB undertake before deciding to 
halt the Payday Rule on January 16?

Q.52.d. What did these analyses conclude about the impact of 
the decision on lenders and borrowers?

A.52.c.-d. The Bureau did not ``halt'' the Payday Rule. As 
noted in a previous response, the Bureau announced its 
intention to engage in a rulemaking process so that the Bureau 
may reconsider, as appropriate, its final rule. Any final rule 
the Bureau adopts will describe the basis and purpose of any 
changes to the rule.

Q.52.e. Did you or other officials meet with or communicate 
with representatives of the payday loan industry prior to the 
January 18 decision to dismiss the case against Golden Valley 
Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit 
Financial, Inc., and Majestic Lake Financial? If so, please 
provide a list of all such meetings, and a brief discussion of 
their content.

A.52.e. Neither I nor any other Bureau official consulted with 
any groups or individuals outside of the Bureau, including any 
representatives of the payday loan industry, in connection with 
my decision to dismiss the case against those lenders without 
prejudice.

Q.52.f. Did you or other officials meet with or communicate 
with representatives of World Acceptance Corporation or the 
installment loan industry prior to the January 22 decision to 
drop the investigation into the case? If so, please provide a 
list of all such meetings, and a brief discussion of their 
content.

A.52.f. As a general policy, the Bureau does not confirm the 
existence of an investigation or its disposition, but is aware 
of the public statement made by World Acceptance Corporation.

Q.52.g. Please provide all communications related to the 
discussion of the Payday rule, the dismissal of the Kansas 
case, and the halting of the investigation into World 
Acceptance Corporation, including email on personal or official 
accounts from custodians Mulvaney, Mork, Doyle, Blankenstein or 
Johnson that contain the words ``payday,'' ``Small dollar,'' 
``installment,'' ``auto,'' ``vehicle,'' ``Golden Valley,'' 
``Silver Cloud,'' ``Mountain Summit,'' ``Majestic Lake,'' or 
``World Acceptance.''

A.52.g. The requested documents would include documents that 
contain confidential Bureau information and it would not be 
appropriate to submit into the public record. I urge you to 
work with the Committee Chairman when submitting requests for 
confidential Bureau information.

Q.53. You claim you were lawfully appointed by President Donald 
Trump to be Acting Director of the CFPB pursuant to the Vacancy 
Reform Act. Will you comply with the time limitations of 5 
U.S.C.  3346?

Q.53.a. How do you interpret the word ``days'' in this statute? 
Calendar days? Business days?

Q.53.b. Days that you actually work at the CFPB?

A.53.a.-b. Yes, I will comply with the Federal Vacancies Reform 
Act's (FVRA) time limits. I interpret the word ``days'' to 
refer to calendar days.

Q.53.c. What is your legal basis for this interpretation? 
Please cite any relevant legal precedent.

A.53.c. This interpretation has been the consistent 
interpretation that executive agencies and the Comptroller 
General have applied. For example, under the FVRA, the 
Comptroller General must notify certain congressional 
committees and others if he determines that an officer is 
serving longer than the permitted 210-day period. The 
Comptroller General's reports about such violations of the 
FVRA's time limits count calendar days when determining the end 
of the 210-day period.\12\
---------------------------------------------------------------------------
    \12\ These violation letters are available at https://www.gao.gov/
legal/federal-vacancies-act/violation_letters.

Q.53.d. As of April 20, 2018, how many ``days'' have you served 
in your role at the CFPB? Please provide the exact number of 
---------------------------------------------------------------------------
days in response to this question.

A.53.d. 147 days.

Q.54.a. On April 9, 2018, the Community Financial Services 
Association of America (CFSA) and the Consumer Service Alliance 
of Texas today filed a Federal lawsuit against CFPB.
    Have you or any member of your staffs at either the OMB or 
CFPB met with CFSA?

A.54.a. Yes.

Q.54.b. If so, please provide the date(s), attendees of the 
meeting(s), and topics or agenda, including whether litigation 
against the Bureau or its small dollar lending rule discussed.

A.54.b. On February 15, 2017, Community Financial Services 
Association of America (CFSA) attended a roundtable meeting of 
nonbank trade associations. Dennis Shaul, Chief Executive 
Officer, represented CFSA. Topics included: the rulemaking 
process; regulatory guidance; supervision and enforcement; and 
the consumer complaint database. I participated in the meeting. 
Other Bureau participants included: Brian Johnson, Acting 
Deputy Director; Kirsten Sutton, Chief of Staff; Emma Doyle, 
Detailee; Anthony Welcher, Policy Associate Director; Zixta 
Martinez, Associate Director; Dan Smith, Assistant Director; 
Eric Blankenstein, Policy Associate Director; Chris D'Angelo, 
Associate Director; Sheila Greenwood, Policy Associate 
Director; Gail Hillebrand, Associate Director; David Silberman, 
Associate Director; and Mary McLeod, General Counsel.
    On April 5, 2018, CFSA met with Brian Johnson, Dan Smith, 
and Emma Doyle. CFSA requested the meeting to discuss the 
status of the reconsideration of the rule. Dennis Shaul, Chief 
Executive Officer; Robert Batson, General Counsel; and Chris 
Vergonis represented CFSA at the meeting.
    Since the lawsuit was initiated, attorneys of the Bureau 
have had communications with counsel for CFSA in the ordinary 
course of representing the Bureau in the lawsuit.

Q.55. Earlier this month, CFPB appealed a judge's decision that 
ordered CashCall, a payday loan company, to pay a $10.3 million 
fine--a fine well below the $287 million sought by CFPB.

Q.55.a. Were you or your immediate staff involved in the 
decision to appeal this ruling?

Q.55.b. If so, please describe your involvement.

A.55.a.-b. Yes, I approved the decision to appeal.

Q.55.c. Prior to the April decision to appeal, did you have any 
contact with Paul Reddam, CEO of CashCall, or any other 
individual representing or affiliated with CashCall? If so, 
where and when did this contact occur, and what was the nature 
of any discussions you had with Mr. Reddam or any other 
individual representing or affiliated with CashCall?

A.55.c. Response No, to the best of my knowledge, I did not 
have any contact with any individual representing CashCall 
prior to the decision to appeal.
                                ------                                


   RESPONSE TO WRITTEN QUESTION OF SENATOR COTTON FROM MICK 
                            MULVANEY

Q.1. Manufactured housing is an important and affordable 
homeownership option in Arkansas. However, several years ago, 
the CFPB implemented new rules on HOEPA rules and thresholds 
that have made it harder for lenders to originate lower dollar 
amount manufactured home loans--the category of homes that are 
the most affordable. This development is not just backed up by 
anecdotal evidence. HMDA data shows that in the 2 years after 
2014 as the new HOEPA rules were put into place, that while the 
overall number of manufactured home loans increased, the number 
of loans below $75,000 fell. The CFPB has indicated it is 
undergoing a thorough review of CFPB rules and policies. 
Moreover, the CFPB has the statutory authority to fix the 
problems with the HOEPA thresholds.
    Will you commit to reviewing this data, exploring its 
relationship to the HOEPA thresholds, and adjusting the 
thresholds to the appropriate levels as appropriate?

A.1. The Bureau of Consumer Financial Protection (BCFP) 
understands that caps on points and fees under the Home 
Ownership and Equity Protection Act (HOEPA) or the Ability to 
Repay and Qualified Mortgage Act (ATR/QM) can 
disproportionately affect low dollar mortgage loans, including 
manufactured home loans. Yes, the Bureau will commit to 
studying market developments in this area, and will then decide 
whether to adjust the thresholds and by how much, as 
appropriate and authorized by law. Bureau staff have met with 
members of the manufactured home industry to better understand 
their perspective on how the Bureau's rules may be impacting 
consumer lending in this space.
                                ------                                


  RESPONSES TO WRITTEN QUESTIONS OF SENATOR SCHATZ FROM MICK 
                            MULVANEY

Q.1.a. I understand you cannot discuss an ongoing investigation 
or the supervision of a specific institution.
    But can you describe generally how the CFPB is approaching 
the supervision of the big credit bureaus going forward?

A.1.a. The Bureau of Consumer Financial Protection (Bureau) 
supervises nonbanks for the purpose of ``(A) [a]ssessing 
compliance with the requirements of Federal consumer financial 
law; (B) obtaining information about the activities and 
compliance systems or procedures of such persons; and (C) 
detecting and assessing risks to consumers and to markets for 
consumer financial products and services.''\1\ The Bureau has 
authority to supervise larger participants of the consumer 
reporting market, pursuant to 12 U.S.C.  5514(a)(l)(B) and 12 
CFR  1090.104. As you know, on July 12, 2018, Ms. Peggy L. 
Twohig, Assistant Director, Supervision Policy, Division of 
Supervision, Enforcement and Fair Lending, Bureau of Consumer 
Financial Protection testified before the Senate Banking, 
Housing, and Urban Affairs Committee during the hearing 
entitled ``An Overview of the Credit Bureaus and the Fair 
Credit,'' where she discussed the Bureau's approach to 
supervision of the credit bureaus.
---------------------------------------------------------------------------
    \1\ 12 U.S.C.  5514(b)(l)(A)-(C).

Q.1.b. What should the credit bureaus be doing to protect the 
---------------------------------------------------------------------------
data they collect on consumers?

A.1.b. The Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) tasked the Bureau with 
enforcing Federal consumer financial laws. To the extent those 
laws impose duties on credit reporting agencies related to 
protection of consumer data, those institutions should ensure 
that they are fully complying with the law.

Q.1.c. How can they make it easy for consumers to protect their 
own data and guard against identity theft?

A.1.c. The Bureau believes that it is critical that consumers 
have the tools they need to protect their data and protect 
themselves against identity theft. The Fair Credit Reporting 
Act (FCRA) requires certain consumer reporting companies--
including the nationwide credit reporting companies--to make a 
number of tools available to help consumers protect the 
information in their consumer reporting files.
    The nationwide credit reporting companies must comply with 
a new Federal security freeze law. In May 2018, Congress passed 
the Economic Growth, Regulatory Relief, and Consumer Protection 
Act (the Act),\2\ which requires nationwide consumer reporting 
agencies to provide ``national security freezes'' free of 
charge to consumers. The ``national security freeze'' restricts 
prospective lenders from obtaining access to a consumer's 
credit report, which makes it harder for identity thieves to 
open accounts in the consumer's name.
---------------------------------------------------------------------------
    \2\ P.L. 115-174.
---------------------------------------------------------------------------
    The nationwide credit reporting companies can also assist 
consumers by facilitating consumers' access and review of their 
own credit file information. Consumers have the right to obtain 
at least one free report from each of the nationwide credit 
reporting companies every 12 months. Consumers who regularly 
review their own credit files have the opportunity to identify 
unauthorized credit accounts opened in their name and can take 
corrective action, for example, by notifying the issuer of the 
fraudulent account and by disputing this information with 
credit reporting companies.
    Additionally, the FCRA provides a number of other tools 
that these companies must deploy to help consumers protect 
their credit file information. For example, the FCRA requires 
nationwide credit reporting companies to put fraud alerts and 
active duty alerts on consumers' credit files at the request of 
eligible consumers. The Act also extends from 90 days to 1 year 
the minimum time that nationwide consumer reporting agencies 
must include an initial fraud alert in a consumer's file. A 
fraud alert informs a prospective lender that a consumer may 
have been a victim of identity theft and requires that the 
lender take steps to verify the identity of anyone seeking 
credit in the consumer's name.

Q.2. Consumer complaints to the CFPB about credit reports are 
consistently high. They are among the top three products and 
services that consumers complain about. Three-quarters of those 
complaints appear to be about inaccurate credit reports and 
errors that credit bureaus do not fix.

Q.2.a. Do you think credit bureaus are doing enough to ensure 
the maximum possible accuracy of credit reports?

Q.2.b. Are they engaging in a meaningful reinvestigation when 
consumers find problems with their credit report?

A.2.a.-b. Federal law provides a framework to ensure the 
players in the consumer reporting system receive the benefits 
of our risk-based credit economy. The FCRA sets forth a dispute 
and investigation framework, as you note, to ensure errors are 
corrected promptly, as well as requirements around accuracy and 
maintaining reasonable policies and procedures.
    The Bureau's oversight has focused on helping to ensure the 
consumer reporting system is one where furnishers provide 
accurate information and consumer reporting companies comply 
with the FCRA by maintaining and distributing data that are 
accurate, and having an effective and efficient dispute 
management and resolution process for consumers.
    The Bureau published a special edition of Supervisory 
Highlights in March 2017.\3\ The Bureau explained in that 
publication that, in the preceding 2 years, the Bureau 
identified failings in compliance management systems and 
violations of law both at consumer reporting companies and at 
furnishers.
---------------------------------------------------------------------------
    \3\ https://www.consumerfinance.gov/documents/2774/
201703_cfpb_Supervisory-Highlights-Consumer-Reporting-Special-
Edition.pdf.
---------------------------------------------------------------------------
    The law requires both bank and nonbank furnishers to 
establish and implement reasonable written policies and 
procedures regarding accuracy of the information they furnish, 
and to take corrective action when they determine they have 
furnished inaccurate information. In addition, the Bureau took 
steps to ensure furnishers' dispute handling processes comply 
with the law in response to failures either to conduct 
investigations or to send results of dispute investigations to 
consumers.

Q.3. In December, you announced that CFPB would reexamine 
requirements to provide mortgage transaction data such as 
pricing and underwriting. Lenders already have that data and 
most, if not all, have systems in place to report it. This data 
gives us insight into the market, to identify risks, enforce 
fair lending laws, and better understand the market. You are 
about to enforce one of the largest penalties against a 
financial institution for persistent predatory practices in 
mortgage lending, and at the same time you are saying the 
Government should have less visibility into mortgage lending 
practices.

Q.3.a. Why is CFPB rejecting data that is available and ready 
to be reported?

Q.3.b. Why would CFPB want to create an information blind spot 
in mortgage lending when there are still so many abuses?

A.3.a.-b. The Bureau is not rejecting any data that is 
available and ready to report. Rather, the Bureau has announced 
that it will reconsider the decisions made by my predecessor in 
implementing the Dodd-Frank Act's amendments to the Home 
Mortgage Disclosure Act (HMDA), including decisions that were 
made to require lenders to report at least 14 new data points 
that the Dodd-Frank Act did not specify must be reported. I 
have not predetermined whether changes should be made in the 
data that is collected and, if so, what changes should be made. 
Any such decision will be made through the notice-and-comment 
rulemaking process provided for in the Administrative Procedure 
Act. Also note that the Economic Growth, Regulatory Relief, and 
Consumer Protection Act amended HMDA to exempt certain smaller-
volume institutions from their obligations to collect and 
report for certain transactions many of the data points the 
Bureau implemented under the Dodd-Frank Act. The Bureau issued 
a rule on August 31, 2018, to implement and clarify the partial 
exemptions provided by the Act.

Q.4. Student loan debt is growing faster than all other 
categories of consumer debt, even credit cards. It is the 
highest category of consumer debt behind mortgages. According 
to the Federal Reserve Board of New York, the student loan debt 
is highly delinquent. At least 11 percent is seriously 
delinquent, and the true number is likely twice that high. In 
contrast, mortgage delinquency peaked at 5 percent during the 
recession.
    Are you concerned about the levels of student loan debt?

A.4. Yes. As a father of three college-age children, I am 
concerned about the level of debt some students choose to take 
on, and whether they receive education worthy of their 
investment.

Q.5. Federal Reserve Chair Jerome Powell recently testified 
that he didn't understand why student loan debt is not 
dischargeable in bankruptcy. Do you think student loan debt 
should be dischargeable?

A.5. That would be a decision for Congress to make.

Q.6. In your role as Director of the Office of Management and 
Budget, have you requested that the Department of Housing and 
Urban Development make recommendations on recessions to 
specific accounts, projects, or functions funded in the 
Consolidated Appropriations Act of 2018 (P.L. 115-141)? If so, 
please provide the specific directions OMB gave to agencies for 
identifying these rescissions.

A.6. The Office of Management and Budget did not provide 
specific directions to agencies for identifying rescissions to 
specific
accounts, projects, or functions funded in the Consolidated
Appropriations Act of 2018, but did more generally inform 
agencies that OMB would review any rescission proposals that 
agencies would like OMB to consider. OMB worked with the 
Department of Housing and Urban Development to identify viable 
candidates from among these proposals. In addition, OMB has 
asked Federal agencies to provide information concerning the 
obligational availability of funds appropriated to specific 
accounts, projects, or functions.

Q.7. In your role as Director of the Office of Management and 
Budget, have you requested that the Department of 
Transportation make recommendations on recessions to specific 
accounts, projects, or functions funded in the Consolidated 
Appropriations Act of 2018 (P.L. 115-141)? If so, please 
provide the specific directions OMB gave to agencies for 
identifying these rescissions.

A.7. The Office of Management and Budget did not provide 
specific directions to agencies for identifying rescissions to 
specific accounts, projects, or functions funded in the 
Consolidated Appropriations Act of 2018, but did more generally 
inform agencies that OMB would review any rescission proposals 
that agencies would like OMB to consider. OMB worked with the 
Department of Transportation to identify viable candidates from 
among these proposals. In addition, OMB has asked Federal 
agencies to provide information concerning the obligational 
availability of funds appropriated to specific accounts, 
projects, or functions.

Q.8. In your role as Director of the Office of Management and 
Budget, have you requested any other Federal agency make 
recommendations on recessions to specific accounts, projects, 
or functions funded in the Consolidated Appropriations Act of 
2018 (P.L. 115-141)? If so, please provide the specific 
directions OMB gave to agencies for identifying these 
rescissions.

A.8. The Office of Management and Budget did not provide 
specific directions to agencies for identifying rescissions to 
specific accounts, projects, or functions funded in the 
Consolidated Appropriations Act of 2018, but did inform 
agencies that OMB would review any rescission proposals that 
agencies would like OMB to consider. In addition, OMB has asked 
Federal agencies to provide information concerning the 
obligational availability of funds appropriated to specific 
accounts, projects, or functions.
                                ------                                


  RESPONSES TO WRITTEN QUESTIONS OF SENATOR CORTEZ MASTO FROM 
                         MICK MULVANEY

Q.1. The Congressional Budget Office said that the tax bill 
that gave massive tax cuts to multinational corporations and 
the wealthiest families. All while raising taxes on 92 million 
middleclass families--leading to a Federal budget deficit of 
$804 billion this year. The tax scam bill will lead to a 
deficit 43 percent higher than it had projected last summer, 
and exceed $1 trillion a year starting in 2020. Last year, 
without the tax giveaway bill, the deficit was $665 billion, 
next year, it will be $804 billion. Debt held by the public 
will hit $28.7 trillion at the end of fiscal year 2028, or 96.2 
percent of gross domestic product, up from 78 percent of GDP in 
2018. Those estimates assume current law will remain in effect, 
meaning Congress would allow some tax cuts to expire and
spending caps to take effect again in the coming years. If 
Congress extends the tax cuts, as many Republicans want to do, 
the CBO predicted higher deficits and publicly held debt 
totaling 105 percent of GDP by the end of 2028--a level 
exceeded only once in U.S. history, in the immediate aftermath 
of World War II.

   LIf you decide to reverse course and use this time 
        of strong economic growth to reduce the deficit, who 
        will bear the cost of deficit reduction? What 
        investments do you plan to reduce or eliminate and 
        which region, population, or industry will bear these 
        costs?

   LWill you seek to cut Social Security, Medicare, and 
        Medicaid to offset the debt increase from the tax bill?

   LWill you seek to reduce resources that help poor 
        families afford safe homes and nutritious food? Or will 
        you urge higher taxes on the powerful corporations and 
        the 1 percent of families?

A.1. The CBO baseline confirms that deficits and debt will rise 
to alarming levels unless we take strong action to grow the 
economy and reduce spending, as proposed in the 2019 
President's Budget. The Administration's ambitious deregulatory 
efforts, combined with tax reform and our pro-growth budget 
policies, are key components of returning to sustained economic 
growth. In addition, the Administration is committed to 
bringing Federal spending under control by eliminating wasteful 
spending and making Government programs more efficient, as 
detailed in the most recent Budget.
    The Administration is committed to bringing Federal 
spending under control, while preserving economic and social 
programs for the most vulnerable by making them more efficient 
and sustainable. The 2019 President's Budget is consistent with 
the President's commitment to protect Social Security and 
Medicare, while also taking steps to extend the solvency of 
Medicare by reducing wasteful spending. The 2019 Budget also 
contains Medicaid reforms which will allow States to design 
State-based solutions that put the program on a sustainable 
fiscal path while ensuring Medicaid is preserved for the most 
vulnerable.
    We plan to continue to protect these vital programs and to 
strive to make the programs more cost-effective and efficient.
    The 2019 President's Budget demonstrated the 
Administration's dedication to helping needy families through 
smart reforms to affordable housing and food assistance 
programs. For example, the Budget included reforms to the SNAP 
program that are designed to ensure that participants who can 
work are expected to do so, that benefits are reserved for the 
neediest households, and that we reduce wasteful and improper 
spending.
    We plan to maintain our commitment to needy families, while 
also striving to spend taxpayer dollars responsibly. It is 
imperative that we keep the tax cuts in place and pursue other 
policies to support economic growth and bring spending under 
control to ensure greater security for America's fiscal future.

Q.2. As the former Attorney General (AG) of Nevada during the 
financial crisis, my office oversaw foreclosure fraud, 
insurance fraud, Medicare and Medicaid fraud and many consumer 
protection issues. State attorneys general have a big job. When 
it comes to deceptive practices of financial firms, the CFPB 
has powers AGs do not have--like Civil Investigative Demands. 
The CFPB can see problems nationwide--so they can see patterns 
that State AGs cannot. In addition, some financial firms can 
pre-empt State law so we could not stop them even if we wanted 
to. Only the Bureau can do that.

Q.2.a. How have State AGs responded to your suggestion that 
they pick up the slack from your lack of enforcement? Please 
name any AGs you have had communications--conversations, 
correspondence, etc.--and their comments and concerns about 
leading without the CFPB's resources.

A.2.a. I do not believe that I have ever stated that State 
attorneys general would need to ``pick up the slack from [the 
Bureau's] lack of enforcement.'' The Bureau of Consumer 
Financial Protection (Bureau) intends to enforce the law as 
written. But, as with every law enforcement agency, the Bureau 
has limited resources. To the extent an attorney general 
believes that there is a relevant legal violation not being 
addressed by the Bureau, that attorney general can bring suit 
pursuant to authority granted him or her by the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (Dodd-Frank Act). No 
State attorney general has commented to me on the Bureau's 
level of enforcement activity.

Q.2.b. Why have there been no public enforcement actions 
announced in the past 5 months since you were illegally 
appointed to head the Bureau?

A.2.b. I reject your assertion that I was illegally appointed 
to head the Bureau. The President validly exercised his 
authority to designate me pursuant to the Federal Vacancies 
Reform Act. Further, the only court to review the validity of 
my appointment has agreed that the President acted within his 
statutory authority. The legal challenge to my authority was 
subsequently voluntarily dismissed by the plaintiff.
    As for substance of your question, the Bureau has taken 
several enforcement actions. The list of enforcement actions 
taken has been updated as of November 1, 2018.
    The Bureau entered into a consent order with Wells Fargo on 
April 20, 2018.\1\
---------------------------------------------------------------------------
    \1\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/wells-fargo-bank-na-2018/.
---------------------------------------------------------------------------
    The Bureau entered into a consent order with Security 
Group, Inc., Security Finance Corporation of Spartanburg, 
Professional Financial Service Corp., et al., on June 13, 
2018.\2\
---------------------------------------------------------------------------
    \2\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/security-group-inc/.
---------------------------------------------------------------------------
    The Bureau entered into a consent order with Citibank N.A. 
on June 29, 2018.\3\
---------------------------------------------------------------------------
    \3\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/citibank-na-2018/
---------------------------------------------------------------------------
    The Bureau entered into a consent order with National 
Credit Adjusters, LLC and Bradley Hochstein on July 13, 
2018.\4\
---------------------------------------------------------------------------
    \4\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/national-credit-adjusters-llc-and-bradley-hochstein/.
---------------------------------------------------------------------------
    The Bureau entered into a consent order with Triton 
Management Group, Inc. on July 19, 2018.\5\
---------------------------------------------------------------------------
    \5\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/triton-management-group-inc/.
---------------------------------------------------------------------------
    The Bureau filed a lawsuit against Future Income Payments, 
LLC, Scott Kohn, and related entities on September 13, 2018.\6\
---------------------------------------------------------------------------
    \6\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/future-income-payments-llc/.
---------------------------------------------------------------------------
    The Bureau entered into a consent order with Bluestem 
Brands on October 4, 2018.\7\
---------------------------------------------------------------------------
    \7\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/bluestem-brands-inc/.
---------------------------------------------------------------------------
    The Bureau entered into a consent order with Cash Express 
on October 24, 2018.\8\
---------------------------------------------------------------------------
    \8\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/cash-express-llc/.

Q.2.c. Why did you end the investigation into the marketing and 
lending practices of World Acceptance Corporation, a South 
Carolina lender? On what basis did you stop the investigation? 
It has been reported that you have taken campaign contributions 
from some of these lenders. Will you recuse yourself from 
deciding on enforcement and litigation actions from firms in 
---------------------------------------------------------------------------
which you received campaign contributions?

A.2.c. As a general policy, the Bureau of Consumer Financial 
Protection (Bureau) does not confirm the existence of an 
investigation or its disposition, but is aware of the public 
statement made by World Acceptance Corporation.

Q.2.d. Has the CFPB taken any public action against recent 
reports that African Americans are more likely to be denied a 
mortgage even with an adequate down payment and prime credit?

A.2.d. Redlining and discrimination in mortgage underwriting 
and pricing practices continue to be priority areas of focus in 
the Bureau's fair lending supervisory and enforcement 
activities.

Q.2.e. Has the CFPB taken any public action following an Urban 
Institute report showing that single women pay more for a 
mortgage than single men even though the women are actually 
better credit risks?

A.2.e. The Bureau continues to review reports, studies, 
consumer complaints, whistleblower tips, and other sources of 
leads in deciding where to conduct fair lending supervisory and 
enforcement activities. As part of its mortgage-related 
supervisory and enforcement activity, the Bureau routinely 
assesses data related to possible gender discrimination. The 
Bureau has not taken any public enforcement actions involving 
gender-based pricing in its history, even under the previous 
Director.

Q.2.f. Was it your decision to drop the lawsuit against Golden 
Valley Lending and three other payday lending companies which 
used faux partnerships with Native American tribes to charge 
excessive interest rates of up to 950 percent--a clear 
violation of State interest rate caps?

A.2.f. The decision to dismiss the case without prejudice was 
made by me. Dismissal of a case, which is one legal theory 
based on one set of facts, does not mean that a decision has 
been made on whether to pursue other legal theories based on 
different facts.

Q.3.a. When you arrived at the Bureau, you froze the Civil 
Penalty Fund. By freezing this fund, you prevented people from 
getting compensation due them. These are people who have 
already suffered. They paid late fees, missed paychecks, and 
lost earnings because of these overcharges.
    How many people are still waiting for compensation from 
completed enforcement actions as of December 31, 2018?

A.3.a. I have not prevented people from getting compensation 
due to them. As of November 9, 2018, funds from the Civil 
Penalty Fund have been allocated to classes of consumers from 
22 cases. Of those 22, funds have been distributed to consumers 
in all but three cases. Preparations for the remaining three 
distributions are continuing according to the Bureau's 
established procedures. In my time as Acting Director, the 
Bureau has released over $110 million to nearly 30,000 harmed 
consumers from the Civil Penalty Fund.

Q.3.b. Why are you delaying people from getting compensation 
due them?

A.3.b. The Bureau is maintaining operation of the Civil Penalty 
Fund. We are not delaying payments from the Civil Penalty Fund.

Q.3.c. You testified before the House that since you arrived at 
the Bureau $92 million has been returned to consumers. How does 
$92 million compare with how much is owed?

A.3.c. As noted in a previous response, there are three cases 
for which funds have been allocated but not yet distributed. 
The allocations for those three cases total $72 million.

Q.4.a. The Consumer Bureau fined Wells Fargo for opening 1.5 
million fake accounts causing consumers to incur more than $2 
million in fees.
    Has every Wells Fargo customer who had a fake account or 
unauthorized credit card been compensated?

A.4.a. The Bureau entered a consent order with Wells Fargo on 
September 8, 2016.\9\ The order provided for remediation, which 
is ongoing.
---------------------------------------------------------------------------
    \9\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/wells-fargo-bank-2016/.

Q.4.b. What about those who were illegally charged auto 
insurance or had unnecessary fees added to their mortgage? Will 
the Bureau take action against Wells Fargo for other fraudulent 
actions beyond the fake accounts and fake credit cards? If so, 
---------------------------------------------------------------------------
when?

A.4.b. Since the hearing, the Bureau has taken action relating 
to these matters in coordination with the Office of the 
Comptroller of the Currency (OCC). On April 20, 2018, the 
Bureau announced a public enforcement action against Wells 
Fargo regarding its mortgage origination and auto-loan 
servicing practices.\10\
---------------------------------------------------------------------------
    \10\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/wells-fargo-bank-na-2018/.

Q.4.c. Have all the people who paid Equifax, Transunion, and 
Experian for credit scores that turned out to be useless--not 
their real scores but an ``educational score''--received the 
---------------------------------------------------------------------------
tens of millions promised to them?

A.4.c. The Bureau entered consent orders with Equifax \11\ and 
Transunion \12\ on January 3, 2017, and with Experian \13\ on 
March 23, 2017. Equifax has completed remediation to consumers. 
Transunion's remediation is ongoing. Experian was not directed 
to pay remediation.
---------------------------------------------------------------------------
    \11\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/equifax-inc-and-equifax-consumer-services-llc/.
    \12\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/transunion-interactive-inc-transunionllc-and-transunion/.
    \13\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/experian-holdings-inc-experian-information-solutions-inc-and-
consumerinfocom-inc-dba-experian-consumer-services/.

Q.4.d. Navy Federal Credit Union illegally threatened to tell 
their customers--members of the military--that the Credit Union 
would tell their chain of command about their debts. Have all 
those customers received all of the $23 million promised to 
---------------------------------------------------------------------------
them?

A.4.d. The Bureau entered a consent order with Navy Federal 
Credit Union on October 11, 2016.\14\ The order provided for 
remediation, which is complete.
---------------------------------------------------------------------------
    \14\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/navy-federal-credit-union/.

Q.4.e. Woodbridge Gold & Pawn deceived consumers about the 
actual annual cost of its loans by as much as half. Has 
Woodbridge provided the $56,000 in restitution to all of the 
---------------------------------------------------------------------------
1,000 people who were overcharged?

A.4.e. The Bureau, jointly with the Virginia Attorney General's 
office, filed an enforcement action against Woodbridge Gold & 
Pawn on February 2, 2017.\15\ The district court entered the 
parties consent order providing for remediation on February 7, 
2017, and that remediation is complete.
---------------------------------------------------------------------------
    \15\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/woodbridge-coins-and-jewelry-exchange-inc-db-woodbridge-gold-
pawn/.

Q.4.f. When RushCard had a massive service breakdown, tens of 
thousands of people could not get their paychecks or pay bills. 
Have all the thousands of UniRush and Mastercard customers 
---------------------------------------------------------------------------
received their share of the $10 million compensation owed them?

A.4.f. The Bureau entered a consent order with UniRush and 
Mastercard on February 1, 2017.\16\ Under the order, payments 
by check and account credits were issued to consumers in March 
2018. Certain reporting and other obligations related to 
remediation under the order remain outstanding.
---------------------------------------------------------------------------
    \16\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/unirush-llc-and-mastercard-international-incorporated/.

Q.4.g. Planet Home Lending took illegal kickbacks for mortgage 
referrals. Have all people who were overcharged and cheated 
---------------------------------------------------------------------------
received the $265,000 in redress?

A.4.g. The Bureau entered a consent order with Planet Home 
Lending on January 31, 2017.\17\ The order provided for 
remediation, which is complete.
---------------------------------------------------------------------------
    \17\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/planet-home-lending-llc/.

Q.4.h. Attorneys at the Williamson Law firm conspired to charge 
illegal fees to people seeking help with debt relief. Has the 
---------------------------------------------------------------------------
CFPB provided funds to all the people who were overcharged?

A.4.h. The Bureau filed a complaint against the Williamson Law 
Firm and related parties on January 30, 2017.\18\ That case is 
ongoing.
---------------------------------------------------------------------------
    \18\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/vincent-howard-lawrence-w-williamson-howard-law-pc-williamson-
law-firm-llc-and-williamson-howard-llp/.

Q.4.i. Have all the clients of Works & Lentz received 
compensation to offset the harm they suffered when this medical 
collection firm provided inaccurate credit information to the 
---------------------------------------------------------------------------
credit bureaus?

A.4.i. The Bureau entered a consent order with Works and Lentz 
on January 9, 2017.\19\ The order provided for remediation, 
which is complete.
---------------------------------------------------------------------------
    \19\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/works-lentz-inc/.

Q.5. Congress has made inadequate investment in IT and cyber 
security for Federal agencies. The leaders of SEC, HUD, and the 
CFTC have all told us recently that they need to upgrade their 
IT systems but Congress has not provided adequate resources. 
How many open IT security specialist positions have you chosen 
---------------------------------------------------------------------------
not to fill?

A.5. The Bureau has a Cyber Team comprised of 20 positions, 
which includes IT Specialists, Information Security 
Specialists, Supervisory IT Specialists, and Policy & Planning 
Specialists. There are six current vacancies among the team and 
the Bureau is finalizing hiring for the Chief Information 
Security Officer (CISO) position. Once this position is 
permanently filled, the Bureau will assess the remaining five 
positions to determine the need to proceed with filling the 
existing vacancies as is given there are current staff 
performing this same work or whether additional skillsets are 
needed within the team. As of November 13, 2018, the remaining 
five positions are:

   LCybersecurity Architecture & Engineering Team Lead 
        (CN-60)

   LInformation System Security Manager (CN-52/53) 
        positions (x2 vacancies)

   LCloud Security Engineer (CN 52/53) positions (x2 
        vacancies)

Q.6. In my State of Nevada, half of renters pay more than \1/3\ 
of their income for rent. Other States also have a rental 
housing crisis with tens of millions of families whose low 
wages leave them struggling to pay rent and other bills. Yet, 
fewer than 6 million families receive Federal assistance with 
their rent. As OMB Director, you develop President Trump's 
budgets. The 2019 budget request proposes the most radical 
retrenchment of Federal aid for such families since the U.S. 
Housing Act was first enacted in 1937.

Q.6.a. Why did the Trump administration's budget ask Congress 
to cancel housing choice vouchers for 200,000 low-income 
families? What will happen to these people--low-income 
families, seniors, people with disabilities, veterans--if you 
strip away the housing benefits they are currently receiving?

A.6.a. The 2019 Budget requested $20.5 billion for the Housing 
Choice Voucher program. This amount provides sufficient funding 
to continue to support all households currently assisted by the 
program, and enables housing authorities to reissue all 
vouchers currently in use to new families upon turnover.

Q.6.b. About 2 million people live in public housing. It's a 
critical and deeply underfunded source of housing. Why does the 
Trump administration budget cut public housing funding by half?

Q.6.c. For people who are elderly, have a disability, or are 
children, what is the public health impact of not repairing 
broken elevators, replacing broken windows or removing lead-
based paint in their homes?

A.6.b.-c. The current approach to supporting the Public Housing 
program is unsustainable and has resulted in units lost due to 
poor physical conditions. To address this problem, the 2019 
President's Budget provides resources to shift Public Housing 
to the Section 8 funding platform (Housing Choice Vouchers, 
Project Based Rental Assistance) where it can leverage private 
financing to address capital repairs. The Budget also allows 
Public Housing Authorities (PHAs) to retain full control of 
properties while protecting residents from displacement, and 
facilitate demolition of uninhabitable units. Further, the 
Administration believes that State and local governments should 
more fully share in the responsibility of providing affordable 
housing.
    The Budget continues to support the Department of Housing 
and Urban Development's (HUD) mission to provide decent, safe, 
and sanitary housing for assisted families, including 
addressing the health and safety conditions of Public Housing 
residents. The 2019 Budget requests $10 million to address 
emergency capital needs in Public Housing, including safety and 
security measures, and $145 million for the Lead Hazard 
Reduction program. Further, HUD has published a competitive 
notice to award $25 million that was provided in 2017 to abate 
lead hazards in public housing.

Q.6.d. Local elected officials, housing developers, and others 
rely on the HOME Investment Partnerships, Community Development 
Block Grant (CDBG), and Choice Neighborhoods programs which 
give flexible aid to low-income rural, suburban, and urban 
communities.
    Why does the Administration budget propose cutting more 
than $4 billion a year to improve basic infrastructure like 
water and sewer lines, provide life-enriching services to youth 
and seniors, build and rehabilitate affordable housing for low-
income residents, and promote economic development?

A.6.d. The 2019 President's Budget recognizes a greater role 
for State and local governments and the private sector to 
provide funding for community and economic development needs. 
The program objectives of HOME, CDBG, and Choice Neighborhoods 
could be met by non-Federal dollars. Many factors contribute to 
housing cost burden and the problem cannot be solved by the 
Federal Government through HOME or the subsidization of housing 
construction alone. For CDBG, it has been documented that the 
allocation formula poorly targets funds to the areas of 
greatest need, and many aspects of the program have become 
outdated. And finally, early reports suggest that many of the 
funds leveraged by Choice Neighborhood grantees were existing 
commitments and appear as if they would have occurred in the 
absence of a Choice grant.

Q.7. We desperately need more resources for affordable housing 
for families whose wages are too low to pay the rent and other 
expenses. The National Housing Trust Fund provided $219 million 
last year nationwide. In Reno, we received a $1.8 million 
investment that provided 20 homes to low-income families.

Q.7.a. Why did the Administration propose eliminating the 
National Housing Trust Fund even though these funds are NOT 
even taxpayer funds?

A.7.a. The Housing Trust Fund, managed by the Department of 
Housing and Urban Development, is a fee-funded Federal program 
that provides grants to States to increase and preserve the 
supply of affordable housing primarily for extremely low-income 
families. Housing for low-income families is also currently 
funded by multiple funding sources, including Federal, State, 
and local governments, as well as the private and nonprofit 
sectors. The result is a fragmented system with varying rules 
and regulations that create overlap and inefficiencies, as well 
as challenges to measuring collective performance. The 
Administration's proposal to eliminate the Housing Trust Fund, 
in concert with other proposals in the 2019 President's Budget, 
would devolve some affordable housing activities to State and 
local governments who are better positioned to comprehensively 
address the array of unique market challenges, local policies, 
and impediments that lead to housing affordability problems.

Q.7.b. Can I get your commitment that the Trump administration 
will not seek to rescind any of the 2018 HUD and USDA housing 
funds? That every dollar Congress provided to help veterans, 
people with disabilities, low-income seniors and families live 
in safe and affordable housing will be available?

A.7.b. Given the long-term fiscal constraints facing our 
Nation, the President is committed to using all available tools 
to put our fiscal house back in order. This includes his 
authority to propose rescissions under the Congressional Budget 
and Impoundment Control Act of 1974. I appreciate you sharing 
your views on these rescissions.

Q.7.c. Can I get your commitment to prioritize funding for 
affordable housing in your 2020 budget submission if you are 
still serving as Director of OMB?

A.7.c. The President's 2019 Budget delivers on key promises 
made to the American people by focusing on four main 
priorities: the safety and security of the American people, 
continuing to build an even stronger and robust American 
economy, an enhanced quality of life for hardworking Americans, 
and a commitment to a better future. As we begin work on 
President Trump's FY 2020 Budget, I appreciate you sharing your 
views on Federal affordable housing programs.

Q.8. More than 91,000 Nevadans have submitted complaints to the 
Consumer Complaint database. About \1/3\ of the complaints in
Nevada and nationwide are about debt collection. People said 
debt collectors illegally harass them for debts that were not 
theirs, try to collect the wrong amount or demand payment on 
outdated debts while they hold people's credit reports hostage. 
Was it your
decision to drop the lawsuit against Golden Valley Lending and 
three other payday lending companies which used faux 
partnerships with Native American tribes to charge excessive 
interest rates of up to 950 percent--a clear violation of State 
interest rate caps?

A.8. The decision to dismiss the case without prejudice was 
made by me. Dismissal of a case, which is one legal theory 
based on one set of facts, does not mean a decision has been 
made on whether to pursue other legal theories based on 
different facts.

Q.9. A Reuters' report stated that ``A CFPB investigation found 
[National Credit Adjusters] wrongly collected roughly $50 
million.'' National Credit Adjusters, a notoriously abusive 
payday loan collector, announced that the Bureau investigations 
have ended.

Q.9.a. Was it your decision to drop this investigation? Did 
your senior staff participate in this decision? If so, who 
advised you to drop the investigation into NCA?

Q.9.b. Do you dispute the claim that National Credit Adjusters 
wrongfully collected millions of dollars from American 
consumers?

Q.9.c. If no, how can these consumers be made whole?

Q.9.d. If yes, would you provide in writing, the evidence you 
have for disputing this claim?

Q.9.e. Are you considering dropping cases against debt 
collection firms Security Finance, Cash Express, and Triton 
Management Group?

A.9.a.-e. As I mentioned in my response to Question 2, the 
Bureau entered into a consent order with National Credit 
Adjusters, LLC and Bradley Hochstein on July 13, 2018.\20\ The 
Bureau also entered into a consent order with Security Group, 
Inc., Security Finance Corporation of Spartanburg, and 
Professional Services Corp. on June 13, 2018,\21\ a consent 
order with Cash Express, LLC on October 24, 2018,\22\ and a 
consent order with Triton Management Group, Inc. on July 19, 
2018.\23\
---------------------------------------------------------------------------
    \20\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/national-credit-adjusters-llc-and-bradley-hochstein/.
    \21\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/security-group-inc.
    \22\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/cash-express-llc/.
    \23\ https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/triton-management-group-inc/.

Q.10. In your Wall Street Journal op-ed you said almost a third 
of consumer complaints received by the Bureau are associated 
with debt collection and said ``data like that should, and 
---------------------------------------------------------------------------
will, guide our actions.''

Q.10.a. Why then did the Consumer Bureau, at your direction, 
cancel a survey of consumers about their experiences with debt 
collection?

A.10.a. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member. Additionally, this question is substantially similar to 
a question I received from Ranking Member Brown following my 
testimony before the Senate Committee on Banking, Housing, and 
Urban Affairs, regarding the Bureau's Semi-Annual Report. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member.
    The survey for which the Bureau sought Office of Management 
and Budget (OMB) approval under the Paperwork Reduction Act was 
tied to testing particular disclosures that were under 
consideration as part of a potential rulemaking with respect to 
debt collection. The request for comment on the Bureau's 
request appeared in the Federal Register on November 14, 2017, 
less than 2 weeks before I became the Acting Director. I 
decided that before proceeding with the survey I first wanted 
to review the proposals that were under consideration for the 
rulemaking so that any data collection would be tailored to 
what I determined to be the appropriate scope for the 
rulemaking rather than driven by decisions that may have been 
made by my predecessor. Prior to my tenure as Acting Director, 
the Bureau did conduct a survey of consumers about their 
experiences with debt collection.

Q.10.b. The debt collection industry and consumer groups both 
believe a rule is needed either to clarify which types of debt 
collection practices are acceptable or to protect consumers 
from abuse. Given this information, are you also in agreement 
that the Bureau should issue a debt collection rule?

A.10.b. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member.
    The Bureau has identified debt collection as part of its 
plans for upcoming proposed rules in the Fall 2018 Unified 
Agenda. Debt collection is one of the most complained-about 
financial products, and industry and consumer groups have 
encouraged the Bureau to engage in rulemaking regarding this 
over 40-year-old statute. The Bureau has engaged in research 
and pre-rulemaking activities regarding debt collection 
practices, including issuing an Advance Notice of Proposed 
Rulemaking in November 2013 and releasing an Outline of 
Proposals Under Consideration in preparation for a Small 
Business Regulatory Enforcement Fairness Act (SBREFA) panel in 
July 2016. The Bureau expects to issue a Notice of Proposed 
Rulemaking addressing such issues as communication practices 
and consumer disclosures by spring 2019.

Q.11. The Pathways Program was designed to increase the number 
of highly skilled, well-trained minorities working at the 
Bureau.

Q.11.a. Why have you canceled hiring under the Pathways 
Program? How many full-time Federal staff members in the 
Pathways Program will not be eligible for a permanent position 
at the Bureau?

A.11.a. On November 28, 2017, I instituted a 30-day hiring 
freeze which was extended indefinitely on January 18, 2018. The 
freeze is designed to give the Bureau's leadership time to 
align the agency's budget, programs, and staffing plans with my 
priorities and evolving mission needs. The freeze prohibits the 
Bureau from hiring external candidates, posting and filling 
certain vacancies that result in promotion, converting Pathways 
appointments, or extending temporary or term appointments. 
While the freeze prohibits converting Pathways program staff to 
permanent positions, on November 13, 2018, I signed an 
exception granting conversion to all remaining full-time 
Pathways employees currently onboard. As of November 21, 2018, 
I have granted exceptions to the freeze for 47 positions so far 
in 2018. The chart below indicates the type and number of 
exceptions made for each position.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Q.11.b. How many of the staff you hired are Latino? African 
American? Women?

A.11.b. From November 27, 2017 through October 23, 2018, 4 of 
the 25 externally hired staff identified in the personnel 
system as Hispanic or African American/Black (these numbers do 
not include interns). Eleven of the new external hires are 
identified in the personnel system as female. Of the 12 
Schedule C appointments, not included in the exceptions list 
above, made between November 27, 2017 and October 23, 2018, 
none of the appointees are identified in the personnel system 
as Hispanic and one appointee is identified as African 
American/Black. Five of the Schedule C appointees are 
identified in the personnel system as female.

Q.11.c. Do you have any Latinos or African Americans in your 
top policy positions at the Bureau? Please name them.

A.11.c. There are currently 63 executives at the Bureau (pay 
bands 81, 82, or 90). This includes Schedule C appointees. 
There are no Hispanic employees serving in Schedule C political 
appointments at the executive pay band levels and one African 
American/Black employee serving in a Schedule C appointment at 
the executive pay band level. For the rest of the executive 
corps, there are four career employees who are identified in 
the personnel system as Hispanic and seven career employees are 
identified in the personnel system as African American/Black.

Q.12. On December 21, 2017, the CFPB announced that it does not 
intend to assess penalties for errors in Home Mortgage 
Disclosure Act (HMDA) data collected in 2018, and that it plans 
to reconsider various aspects of its 2015 HMDA rule.
    How can you enforce the law against racial discrimination 
without actual data about who gets what type of loan? Or 
without penalties for discrimination?

A.12. The Bureau issued its statement in recognition of the 
significant systems and operational challenges needed to adjust 
to the revised Regulation C, for Home Mortgage Disclosure Act 
(HMDA) data collected in 2018 and reported in 2019. The 
statement does not modify financial institutions' obligation to 
submit 2018 HMDA data. The statement regarding HMDA 
resubmission and penalties applies only to HMDA data collected 
in 2018 and submitted in 2019.
    For data collected in 2018 and submitted in 2019, the new 
HMDA Platform, which allows financial institutions to upload 
HMDA files, perform validation on the data, review edits, 
submit HMDA data, and complete the HMDA filing process, will 
encourage and facilitate financial institutions' ability to 
file accurate and complete HMDA data. Further, under Regulation 
C (and effective for data submitted in 2019), an authorized 
representative of the financial institution with knowledge of 
the data submitted shall certify to the accuracy and 
completeness of data submitted.

Q.13. This year is the 50-year anniversary of the Fair Housing 
Act. Yet, we have the largest homeownership gap between whites 
and blacks as in 1968.

Q.13.a. How does your decision to suspend penalties for HMDA 
violations move us toward closing the racial homeownership and 
wealth gap?

A.13.a. The Bureau understands that financial institutions have 
devoted considerable resources to properly convert their 
systems, policies, procedures, and training to conform to the 
changes in Regulation C that took effect on January 1, 2018. 
The Bureau's decision along with the decision of the prudential 
regulators not to
require financial institutions to pay penalties with respect to 
errors in data collected in 2018 and reported in 2019 will not 
undo their work or the ongoing work of institutions to get HMDA 
reporting right. Collection and submission of the 2018 HMDA 
data will provide financial institutions an opportunity to 
focus on identifying any gaps in their implementation of the 
additional requirements in Regulation C and making improvements 
in their HMDA compliance management systems for future years. 
The Bureau plans to conduct HMDA exams on 2018 data with the 
goal of helping financial institutions improve data quality 
going forward, and required HMDA reporting in future years will 
also provide an incentive for HMDA filers to address any 
compliance gaps as soon as possible.

Q.13.b. Director Mulvaney, would you please explain why you 
believed it was necessary to change the language of the 
Bureau's mission statement that focused on protecting 
consumers?

A.13.b. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters (CA) following my 
testimony before the House Committee on Financial Services, 
regarding the Bureau's Semi-Annual Report. For that reason, I 
am providing you the same response I provided the Ranking 
Member.
    You may recall that the language is drawn from one of the 
five statutory objectives of the Bureau, and is drawn directly 
from Section 1021(b)(3) of the Dodd-Frank Act.

Q.14. Director Mulvaney, it appears that you have begun to 
refer to the Consumer Financial Protection Bureau as the 
``Bureau of Consumer Financial Protection'' and also changed 
the seal of the agency.

Q.14.a. If you persist in this confounding change, what are you 
doing to minimize confusion to consumers, the very people the 
Bureau was created to protect?

A.14.a. We are using the name expressly assigned to us by 
Congress in the Dodd-Frank Act. To the extent you believe the 
correction is confounding, the decision to use an improper name 
for the agency was made by prior leadership.

Q.14.b. The current name puts people--consumers--first. Why do 
you seek to change the name to minimize the responsibility that 
we need a banking system that serves people, not financial 
firms?

A.14.b. I am not sure why Congress decided in the Dodd-Frank 
Act to call our agency the Bureau of Consumer Financial 
Protection. We are using the name given to us in the law. You 
would have to ask the drafters for insight into the meaning 
they intended to convey by choosing this name.

Q.15. When I talk with banking regulators, they tell me that 
they support a robust Consumer Financial Protection Bureau that 
can focus 100 percent on consumer protection from unfair, 
deceptive, and abusive practices while bank examiners focus on 
safety and soundness.

Q.15.a. Are the banking regulators--the Federal Reserve, the 
OCC, NCUA, the FDIC--prepared to step up their consumer 
protection efforts as you weaken yours? Please provide evidence 
that the banking regulators are planning to increase their 
oversight of consumer protection for their regulated banks.

A.15.a. We are not weakening efforts. I do not accept your 
premise. Requests for evidence about the planned future 
activities of other Federal agencies should be directed to 
those agencies.

Q.15.b. What about State attorneys general? Do they think they 
can manage to fill the consumer protection void you are 
leaving? Please provide evidence that AGs are ready to expand 
their consumer protection activities in the financial 
marketplace.

A.15.b. We are not leaving a void. I do not accept your 
premise. Requests for evidence about the planned future 
activities of State attorneys general should be directed to 
those offices.

Q.15.c. What entities will police payday lenders, the title 
insurance firms, the credit reporting agencies, money remitters 
if the Bureau limits its oversight? Please provide evidence 
that other regulators like the IRS and the FTC are planning to 
expand their oversight over firms the Bureau has chosen to 
weaken regulatory oversight.

A.15.c. We are not limiting oversight. I do not accept your 
premise. Requests for evidence about the planned future 
activities of other Federal agencies should be directed to 
those agencies. The Bureau will continue to enforce Federal 
consumer financial law as defined in the Consumer Financial 
Protection Act.

Q.15.d. Can you point to any other precedent in history where 
the head of the Office of Management and Budget had a second 
job?

A.15.d. I am not aware of any such precedent.

Q.15.e. Can you point to any other precedent in history where 
the head of a White House office also simultaneously headed an 
independent banking regulatory agency?

A.15.e. I am not aware of any such precedent.

Q.15.f. What policies and procedures are in place to ensure 
that your responsibilities at the Office of Management and 
Budget do not undermine the Bureau's independence?

A.15.f. Emails and records relating to the separate agencies 
are created and preserved on the respective agency's systems 
and in accordance with the agency's record schedules and 
retention policies. Funds of the respective agencies are used 
only to cover costs associated with the respective agency's 
duties. Personnel not detailed to the Bureau are not involved 
with specific party matters before the Bureau, except when 
specifically authorized and required by their normal OMB 
duties. OMB and Bureau ethics officials coordinate on the 
application of the ethics rules to ensure that OMB personnel 
detailed to the Bureau comply with the rules of both agencies.

Q.15.g. Has either the Consumer Bureau Board or the Office of 
Management and Budget Inspector General reviewed these 
potential conflicts and the appropriateness of holding two 
conflicting part-time jobs instead of focusing full-time on the 
position of which you were confirmed and sworn into? If so, 
what did they say? Please provide any correspondence or notes.

A.15.g. I note that this question is identical to a question I 
received from Ranking Member Maxine Waters following my 
testimony before the House Committee on Financial Services. For 
that reason, I am providing you the same response I will 
provide to the Ranking Member. There is no conflict and I am 
not aware of any such review by the Inspector General of the 
Board of Governors of the Federal Reserve System and the Bureau 
of Consumer Financial Protection. There is no Inspector General 
for the Office of Management and Budget.

Q.15.h. Please detail every meeting you attended at a Trump-
branded property since the 2016 election. Please note any 
expenses you incurred at these properties including any 
lodging, meals or other expenses. If you attended such events, 
please list any staff who assisted in your attendance at events 
at Trump property. Please define the name of the staff member, 
that person(s) position(s) and the amount of time that they 
devoted to scheduling your attendance at events at a Trump-
owned property.

A.15.h. On December 5, 2016, President-elect Trump interviewed 
me as a candidate for Office of Management and Budget Director 
at Trump Tower in New York. No executive branch staff assisted 
in my attendance at that interview, and I did not incur any 
expenses there. On February 19, 2017, I attended a meeting at 
Mar-a-Lago. I was accompanied by Russ Vought and Emma Doyle, 
who were both Senior Advisors at the Office of Management and 
Budget at the time. Ms. Doyle spent less than one half hour 
scheduling my attendance at this meeting. Neither Mr. Vought, 
Ms. Doyle, nor I incurred any expenses at Mar-a-Lago. Finally, 
on August 15, 2017, I attended a meeting at Trump Tower in New 
York. I was not accompanied by any staff, though Ms. Doyle, by 
then my Chief of Staff, spent less than 15 minutes scheduling 
my attendance at this meeting. I incurred no expenses at Trump 
Tower.

Q.16. During the hearing, you agreed with comments that 
manufactured home lending has fallen. However, the HMDA data 
(see below) finds that in 2016, 118,637 manufactured home loans 
were made. This is higher than any year since 2009 when 125,832 
loans were made. This is consistent with Nevada data that finds 
that manufactured homes fell to 1,460 in 2009 and has since 
rebounded with 1,612 loans in 2016.
    On what basis do you assert that loans to manufactured 
homeowners has fallen? Please share any information on lending 
for manufactured housing for both real property and chattel 
loans from 2008 to 2017, or the most recent available data.

A.16. At the hearing Senator Thom Tillis observed that because 
of regulatory overreach consumers are not getting the loans 
they need, including the kinds of loans his family relied upon 
to live in a mobile home back in the 1970s and 1980s. I 
expressed my agreement with the concern about the impact of 
overregulation on access to credit. I am particularly concerned 
about the impact that the Bureau's rules have had on the 
ability of consumers to obtain smaller mortgages. The Bureau is 
committed to understanding this important segment of the 
housing market, including loans for
relatively low dollar amounts. In 2014, the Bureau issued a 
white paper entitled ``Manufactured-housing Consumer Finance in 
the United States,''\24\ and in May, we released our report on 
2017 Home Mortgage Disclosure Act (HMDA) data trends,\25\ which 
includes a section on Home Ownership and Equity Protection Act 
(HOEPA) loans with a particular focus on manufactured housing. 
HMDA data indicates, for example, that the number of mortgages 
under $50,000 made to purchase a manufactured home is below the 
level of such loans in 2013.\26\ The Bureau is examining 
certain trends in mortgages for manufactured homes in its 5-
year assessment of the ability-to-repay and qualified mortgage 
rule.
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    \24\ http://files.consumerfinance.gov/f/
201409_cfpb_report_manufactured-housing.pdf.
    \25\ https://www.consumerfinance.gov/data-research/research-
reports/cfpb-data-point-mortgage-market-activity-and-trends/.
    \26\ Table 9b of the Data Point, https://s3.amazonaws.com/
files.consumerfinance.gov/f/documents/bcfp_hmda_2017-mortgage-market-
activity-trends_report.pdf.
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