It was no wonder the public tuned out the CFPB narrative that Democrats have repeated since they controlled Congress and the White House and passed the 2010 Dodd-Frank Act, which created the bureau. The plot never changes — before Cordray’s resignation, Republicans opposed the bureau because it kept the financial industry honest; now they restrain the CFPB so businesses can cheat consumers.
.. The Dodd-Frank Act forbids the Federal Trade Commission and the CFPB from conducting independent inquiries into the same matter. Cordray may have authorized an investigation of the Equifax data breach, but the FTC ended up conducting the full-scale probe.
.. Cordray and Warren, who helped draft the law, surely recognized Rucker’s sleight-of-hand. Nevertheless, the senator tweeted, “Another middle finger from @MickMulvaneyOMB to consumers: he’s killed the @CFPB’s probe into the #EquifaxBreach.”
.. Since 2010, Republicans have objected to the lack of legislative and executive checks on a regulator with so much impact on the economy.
.. Democrats, confident there would never be a Republican director, characterized the near-absolute power as independence from political influence.
.. Ironically, the once-secretive CFPB has been more transparent since Mulvaney throttled its External Affairs Division, the propaganda machine Warren created in 2010 while leading the agency’s yearlong start-up process as a presidential adviser.
.. The division’s copious press releases have been replaced by more-informative leaks from the bureau’s overwhelmingly Democratic employees. Contrary to the stale narrative that liberals craft from the leaks, the acting director does not hate consumer protection; he just hates the CFPB’s structure, which he once described as “a joke . . . in a sad, sick way.” Warren’s obstinacy has only allowed him to validate the now-famous comment and delight in the bully’s comeuppance.
.. Mulvaney invited a Daily Caller reporter to the CFPB headquarters Warren had procured in 2011. Cordray’s $124 million renovation of the Brutalist eyesore came to symbolize the bureau’s elitist liberal entitlement. The reporter was escorted through a 2,660-square-foot athletic facility with two huge locker rooms, offices with electric height-adjustable workstations, a library with a sofa and lounge chairs but few books, a roof deck with spectacular views and motorized cantilevered umbrellas, and a courtyard with lavish fountains. The images recalled the familiar spectacle of triumphant soldiers touring a deposed dictator’s opulent palace.
.. But exposing his predecessor’s sins is only Mulvaney’s jab. His knockout punch is demonstrating that the CFPB’s structure allows its director to behave like the Republican stereotype.
.. Unlike other Trump nominees who renounced previous calls to eliminate the agencies they were tapped to lead, Mulvaney told reporters he was not shutting the CFPB down because the law did not permit him to do so. In his introduction to the agency’s five-year strategic plan he declared that “we have committed to fulfill the Bureau’s statutory responsibilities, but go no further.”
.. He requested no funding from the Fed for the first three months of 2018 and instead financed the CFPB’s operations by draining its stockpiled reserves, a likely prelude to agency layoffs... Rather than defend his policies, Mulvaney reminded his critics: “I am the judge, I am the jury, and I am the executioner in some of these investigations, and that is completely wrong. . . . If you don’t like it, talk to the person who wrote the statute.”.. Her attempt to shame Republicans is laughable — Democrats remained silent for five years while Cordray proved that Congress is powerless to rein in the director... Mulvaney is not, as Warren writes, “turning the CFPB into a politicized rogue agency.” He is showing Democrats that it will continue to be one unless they help restructure it.
Turn weaknesses into strengths.
This is when things start to get graceful; when you can find a way to turn something that should be working against you into an advantage. Haigh isn’t a lawyer, and this was his first time in court. But as Shang pointed out:
“When you’re showing up in small claims court, it’s not a literal battle between you and the other side. It might feel like it, but you’re really trying to impress the judge. It’s an arena for regular people to settle grievances. So Christian’s weakness–no law degree–became his strength.”
.. Turn strengths into weaknesses.
Haigh won, but Equifax appealed the judgment, and it sent a high-powered lawyer from the law firm of King & Spalding to oppose him–along with an in-house lawyer and a company vice president. It would have been natural to be intimidated, but Haigh said he realized this could actually be a good thing for him.
“Equifax, being a large national corporation, part of their litigation strategy is to hire the best people, so they hire King & Spalding. But they’re not really thinking through the fact that King & Spalding probably doesn’t go to small-claims court very often,” he told me.
Sure enough, Haigh writes in his blog post, this benefited him when the company’s lead lawyer didn’t know (or seemed not to know) that in small claims court, hearsay evidence is admissible. Thus, he wasted time and effort arguing that Haigh shouldn’t be allowed to use a report about the Equifax breach from Senator Elizabeth Warren as evidence.
As the great philosopher Wayne Gretzky once put it, you miss 100 percent of the shots you don’t take. And I guess you lose 100 percent of the small-claims court cases you never get around to filing.
.. Keep showing up.
As long as I’m punctuating these principles with quotes, how about one supposedly from Winston Churchill: “Success consists of going from failure to failure without loss of enthusiasm.”
.. “we realized if they pursued their cases in small-claims court, it might be a good opportunity. So we put out an announcement that we would fund Equifax cases, and they really started coming in.”
“Look at them as sleeping giants. They make the financial industry tick,” said Keith Snyder, an industry analyst at CFRA Research. “They’re the rails that the financial train runs on. Without them, everything would grind to a halt.”
.. the scrutiny comes at a time when credit-rating companies had hoped the Trump administration would roll back regulations, including limiting the powers one of its major watchdogs, the Consumer Financial Protection Bureau. Instead, the industry is facing its biggest challenge in decades.
.. Equifax traces its roots to 1899, when two Atlanta grocery store owners, Cator and Guy Woolford, started what was then known as Retail Credit Co. by going door-to-door to collect information about people in their community. Their $25 book, “The Merchant’s Guide,” noted who in the neighborhood typically paid promptly or who shouldn’t be trusted with credit.
.. The guide served as a key reference to local businesses that were grappling with rapid urbanization, said Josh Lauer, associate professor of media studies at the University of New Hampshire. Traditionally, local owners knew their customers, but as people flooded into the city, that had become more difficult, he said. “They were providing a service, trying to make lending safer,” he said.
.. But it also set up an adversarial relationship with consumers that survives today. “Their whole history is about skepticism toward consumers, believing that consumers are trying to get over on the local businesses,” said Lauer
.. Over time, credit bureaus, such as Retail Credit, would often align themselves with law enforcement, Lauer said. Some had desks set aside in their offices for the Internal Revenue Service or Federal Bureau of Investigation, he said. “There was no firewall, no protection for consumers at all.”
.. Retail Credit drew particular scrutiny because of its history of working with health and life insurance companies. When building reports about whether someone should be extended policies, the company would collect information from neighbors and family members about that person’s health, reputation, and sometimes note if they were homosexual, Lauer said.
“Credit worthiness was tied to character,” he said.
.. In 1974, four former employees of the company told a Senate subcommittee that they were forced to falsify credit reports and meet unrealistic goals to keep their jobs, including ensuring there was adverse information about 6 percent to 10 percent of consumers to prove to their business customers that they were being thorough.
.. Instead of simply selling credit reports to the business community, it has branched into new markets, using artificial intelligence, machine learning and other tactics to unearth information, even sweeping up Facebook and Twitter data on consumers to help companies decide whom to lend money to.
.. “You think about the largest library in the world . . . the Library of Congress, we manage almost 1,200 times that amount of content every day, around the world.”
.. Instead of focusing solely on the United States, Smith has pushed Equifax into 24 countries.
.. Early in his tenure, Smith made a risky bet to jump into a new market, buying Talx, which housed the world’s largest repository of employment data.
“Every time an employee was paid, it creates 50 data attributes,” including how much a person earns and how much was comprised of a bonus, Smith said in an August talk. The company could combine that information with data it already had on customers to create new products, he said.
.. It initially required companies to agree not to join a class-action lawsuit to get some forms of help.
“Their game plan is fairly aggressive, so obviously this might put a damper on their aspirations,” Snyder said
.. Smith is facing potentially the biggest challenge of his career when he testifies before a House committee next week. Lawmakers have criticized the company for waiting six weeks after learning of the breach to tell the public
Among the 2,000 or so enraged messages that I received after the most recent Equifax data breach, the wish that came up most often was that Richard F. Smith, the company’s chief executive, be pushed out the door.
But the messages also reflected something I had not seen before, not even after the scandals at Wells Fargo and Volkswagen, even though those companies committed similarly egregious offenses. It was a sense of helplessness, the recognition that we are at the mercy of an industry that makes money off our data, treats us with disdain and answers to no one.
.. “It’s going to dawn on people that we are defined by these descriptors, markers and measures, but we have no meaningful informational rights to them or over them,” Sarah Bloom Raskin, who served as deputy Treasury secretary during the Obama administration
.. The credit reporting industry begins with a sort of entrapment, said Amanda Steinberg, chief executive of DailyWorth, a financial website geared toward women,
.. If you want to do business with just about any financial services company, you must agree to allow it to report your payment history to the credit reporting agencies.
.. But there does not appear to be any way to step out of the system unless you can live a life completely free of the need for credit, mobile phones and many jobs (since employers often make a credit check a condition of employment).
.. Equifax persisted for days in charging many people for the privilege of freezing their credit files.
.. Richard Russell of the Bronx questioned whether Equifax might have an incentive to be casual about security so that it could turn around later and charge what amounted amounts to protection money. “Isn’t that what this credit freeze is essentially?” he asked in an email to me this week. “In many parts of the world, this would be labeled extortion.”
.. Equifax has not directly informed people who may have been affected by the breach. It could send them letters, but it has chosen not to so far.
.. Consider the revelation that the president of Equifax’s information solutions unit in the United States and its chief financial officer sold stock after the breach was discovered but before it was made public. If they knew about the break-in, they violated insider trading laws. The company says they did not know.
.. In what sort of company would Mr. Information Systems and Mr. Money not be in the loop on a problem like this? “That’s also horrifying,” said Cristi Page of San Diego. “They’re either unethical or they’re incompetent. Neither of those inspire much confidence.”