The Biden administration is working to reassert the government's top consumer watchdog, which was sidelined by President Donald Trump, just as the U.S. economy is showing signs of revving up.
The Consumer Financial Protection Bureau, or CFPB, hollowed out and politicized under Trump after his administration failed to eliminate it outright, is a regulatory agency created by former President Barack Obama in response to the last economic crisis. Democratic lawmakers, consumer finance experts and former CFPB employees say the groundwork is being laid for it to re-emerge as the aggressive enforcement entity it was originally envisioned to be, at a time when millions of Americans face unprecedented financial hurdles resulting from the pandemic.
The stakes are high for President Joe Biden, too: His administration has pinpointed the agency as a key weapon in his arsenal to address racial disparities in access to loans, capital and credit, part of major campaign promises to Black Americans and other people of color who have also been disproportionately affected by the Covid-19 crisis.
Experts said a fully staffed, enforcement-focused CFPB gives Biden a crucial tool to advocate for lower- and middle-class Americans who have in recent years, and during the pandemic in particular, been preyed on by financial institutions and subjected to dubious lending and debt collection practices.
"There is going to be a cop on the beat again," said Sen. Elizabeth Warren, D-Mass., who helped create the agency. "The Trump team, they tried to make clear they were there to help big banks and big money lenders, not families. But the Biden administration is focused on using it to level the playing field."
The approach would be in line with the agency's original mission, and it would mark a notable change from its direction under Trump.
Trump's first CFPB chief was Mick Mulvaney, who as a member of Congress had sponsored bills to eliminate the agency. As acting director, Mulvaney froze hiring, ceased investigations and fine collections, suspended most rulemaking and shifted the mission of the agency from enforcement, which helped consumers, to cutting regulations, which experts said helped lenders and other parts of the financial industry.
He famously submitted a budget request for the agency for zero dollars and created a new line of political appointees in each division of the agency, called policy associate directors, who experts and former employees said were meant to politicize the agency. In 2018, the Trump administration stripped the agency of its powers to enforce discrimination cases in lending, a move that enraged many Democrats and consumer finance advocates.
Experts viewed Mulvaney's successor, Kathy Kraninger, as a leader who more subtly exercised a conservative vision for the bureau, reshaping its mission as educating consumers so they can look out for themselves.
During Mulvaney's tenure, a number of enforcement actions were put on hold, but they picked up under Kraninger. Still, the money recovered by actions under both agency chiefs during the Trump administration paled in comparison to the total recovered during the Obama years. Kraminger resigned at Biden's request, hours after he was sworn in.
The Biden administration has already made moves to help return the agency to its original mission.
Biden named as his acting director Dave Uejio, an agency veteran who had served in various roles there since 2012.
Under Uejio, the agency has begun staffing up. In February, it announced a comprehensive recruiting effort for "mission-oriented" lawyers who would help "achieve the agency's mission priorities."
In a statement to NBC News, Uejio said that since he started the acting top job, he has "focused the CFPB on providing relief for consumers affected by the COVID-19 pandemic, and taking action on racial equity."
"We are taking a close look at previous policies that hampered the Bureau's effectiveness, and simultaneously working nonstop through supervision and enforcement to ensure financial institutions are treating consumers fairly and playing by the rules," he said.
He hired as a senior adviser Diane Thompson, a former agency employee who has written frequently about the need for the bureau to focus more specifically on racial inequality and antidiscrimination measures.
Agency officials said the agency no longer employed any policy associate directors.