Citing predatory lending in Baltimore, lawmakers question reduced consumer enforcement

Maryland's Democratic senators, Chris Van Hollen, left, and Ben Cardin, talk to reporters on Capitol Hill.

WASHINGTON — Maryland’s senators, noting a history of predatory real estate practices in Baltimore, called on the Trump administration Wednesday to abandon plans to strip a division of the Consumer Financial Protection Bureau of its enforcement powers.

Nearly seven years after Democrats created the bureau, the Republican administration has proposed a major reorganization to “prevent actions that unduly burden the financial industry and limit consumer choice.” Some of the proposed changes were included in the $4.4 trillion budget unveiled by the White House this week.


White House budget chief Mick Mulvaney, a vocal critic of the agency who was named its director in November, moved the Office of Fair Lending and Equal Opportunity under the office of the director and tasked it with education and advocacy rather than enforcement. The agency has said enforcement will be handled by other divisions.

In a letter to Mulvaney sent Wednesday, Sens. Chris Van Hollen and Ben Cardin point to a history of discriminatory lending in Baltimore and argue for keeping the division’s enforcement in place. Most recently, Wells Fargo settled a $175 million lawsuit in 2012 brought by Baltimore for what the city described as a practice of selling subprime mortgages to African American and Hispanic families.


Van Hollen is a member of the Senate Committee on Banking, Housing and Urban Affairs, which oversees the bureau.

“The destruction and equity stripping of communities throughout our country did not have to happen, but serious enforcement gaps in the mortgage and financial markets, especially with regard to fair lending and consumer lending laws, allowed it to happen,” Cardin and Van Hollen, both Democrats, wrote in their letter.

“The support of the federal government is imperative as cities like Baltimore continue to grapple with the consequences of decades of discriminatory lending practices that systemically segregated and stripped wealth from communities of color,” they wrote.

But the argument is unlikely to gain much traction in Washington, where the bureau and the underlying law that created it — the 2010 Dodd-Frank financial overhaul bill — has long been a target for Republicans. Many call it a rogue agency; in the 2016 party platform the GOP said it was responsible for “regulatory harassment” and called for its abolishment.

Mulvaney denied Tuesday that he is gutting the agency.

“Yes, I mean to change the bureau,” the former South Carolina congressman wrote in USA Today on Tuesday. “This shouldn’t surprise anyone. That’s exactly what happens to every agency when a new administration appoints new leadership.

“I changed the internal structure of our fair lending enforcement and supervision functions. I did that in order to have only one office, not two, that handles enforcement, and only one, not two, that handles supervision.”