Democrats lash out at consumer watchdog amid reports it is dropping Equifax inquiry
Democratic lawmakers lashed out at the Consumer Financial Protection Bureau on Monday, Feb. 5, amid a report that the agency was backing off an investigation into a massive data breach at Equifax last year that exposed sensitive data about millions of people.
Reuters, citing former officials familiar with the probe, reported that the CFPB has not taken routine steps to move forward with an investigation into the incident, including ordering subpoenas or seeking sworn testimony from Equifax executives.
The report stirred an immediate backlash from Democratic lawmakers, who have feared that President Donald Trump's pick to temporarily lead the agency, Mick Mulvaney, was weakening the consumer watchdog. Failing to investigate the data breach would put "145 million Americans at risk is malpractice," said Sen. Sherrod Brown, D-Ohio, ranking member of the Senate Banking Committee. Sen. Catherine Cortez Masto, D-Nev., said "the Trump Administration has chosen to protect Equifax, while denying Americans justice and accountability."
The CFPB's former director, Richard Cordray, said on Twitter "if you're not going to stand up for consumers on something this important, then what good are you?"
The CFPB did not immediately return a request for comment from The Washington Post but told Reuters that it was not permitted to acknowledge an open investigation. Mulvaney has said he would be reviewing all of the CFPB ongoing enforcement cases before they moved forward.
Mulvaney's efforts to remake the agency have repeatedly stirred protests from Democrats and consumer groups. Last week, a CFPB unit responsible for pursuing discrimination cases was stripped of its enforcement powers. Mulvaney has also dropped a lawsuit against payday lenders and said the agency would reconsider rules the financial industry complained would be particularly onerous.
For Republicans, who have long been critical of the CFPB, Mulvaney's efforts are a welcome change for the agency, which they say has been too aggressive. In a memo to his staff this week, Mulvaney said the agency would act with "humility and prudence" and no longer "push the envelope."
But Democrats say Mulvaney is gutting the CFPB, which was created after the global financial crisis.
Equifax drew the ire of lawmakers last year after the company's massive data breach and its bungled response. For several days, the company's Twitter account directed consumers in search of help to a fake site pretending to be Equifax and it initially required consumers to agree not to join a class-action lawsuit to get some form of help. It eventually dropped that demand.
The company is now under investigation by several agencies, including the Federal Trade Commission and the CFPB. In September, Cordray, then the CFPB director, said credit bureaus such as Equifax should prepare for a "different regime" and that "some of the critics of the Consumer Bureau are among the 143 million people who've now had their precious financial information compromised and are going to have to worry about what it means for them and their families."
But, so far, despite the heavy criticism, lawmakers have yet to take up legislation to address the matter and regulators have not penalized the company. New York Attorney General Eric Schneiderman said on Twitter that he is "continuing to move full steam ahead" with a multistate investigation into the matter.
Story by Renae Merle. Merle covers white-collar crime and Wall Street for The Washington Post.