Consumer Watchdog Racism Controversy

FILE- In this Aug. 27, 2018, file photo a sign stands at the construction site for the Consumer Financial Protection Bureau's new headquarters in Washington. The nation’s financial watchdog has opened a formal investigation into writings and comments by Eric Blankenstein, a Republican appointee overseeing the agency’s anti-discrimination efforts, which he alleged that most hate crimes were fake and argued that using racial epithets did not mean a person was racist. (AP Photo/Andrew Harnik, File)

In 2008, then-State Rep. Mick Mulvaney opposed removing the Confederate flag from the South Carolina Statehouse. Like many who held the same view, he didn’t fully comprehend the pain of such a divisive symbol flapping in the faces of African-Americans. “My guess is that this has more to do with (then-candidate) Obama being on the ticket than anything else,” he cynically said at the time.

After the slaying of nine black parishioners at Emanuel AME Church in Charleston some seven years later, Mulvaney had a change of heart on the Confederate flag. A few days after the tragedy, he was quoted saying “ ... in speaking with many people ... it has become clear that the flag does in fact mean different things to different people in our state… (a)nd I blame myself for not listening closely enough to people who see the flag differently than I do. It is a poor reflection on me that it took the violent death of my former desk mate in the S.C. Senate, and eight others of the best the Charleston community had to offer, to open my eyes to that.’”

Mulvaney’s honesty made a real difference after the Charleston tragedy. Now, as President Trump’s acting director of the Consumer Financial Protection Bureau (CFPB), he once again has an opportunity to re-evaluate his view on an issue of great importance and to use his position of even greater influence to ensure everyone has an opportunity to pursue the American dream.

The CFPB is the only federal agency with a mission entirely focused on protecting consumers from the misdeeds of financial institutions and predatory lenders. Policing discriminatory lending is one of its main focuses. To root out such abuses, it looks for, among other things, examples of disparate impact in lending — when the lending practices of a financial institution disproportionately benefits one group of people, typically whites over African-Americans and other communities of color.

Since the CFPB’s creation in 2011, it has sought to ensure that such discriminatory practices, whether intended or not, would end, and if banks and other financial institutions continued to engage in such behavior, they would receive hefty monetary fines and risk incurring reputational harm.

Unfortunately, as CFPB acting director, Mulvaney has questioned the use of disparate impact and more broadly, taken an ax to the office charged with ensuring our fair lending laws are followed. Before his arrival at the bureau, more than $400 million in fines and remediation for victims of redlining and other discriminatory practices was secured. Since his installation, Mulvaney has sabotaged the Fair Lending Office’s ability to enforce these laws, leaving such work in the hands of Eric Blankenstein, a man recently discovered to have written racist and sexist blog and message board posts.

According to news reports, Blankenstein wrote that calling someone the n-word (he actually used the word) didn’t make them a racist, asked “does it matter that someone got beat up because they were black” and claimed that hate crime “hoaxes” are “three times as prevalent as actual hate crimes.”

Who in their right mind would allow someone who harbors such repugnant beliefs to keep their position in the public trust?

Blankenstein has corrupted the rationale behind Mulvaney’s zeal to cripple fair lending policy and enforcement. That is why many from his own staff and dozens of consumer and civil rights groups have called on him to revisit his changes to fair lending policy and to dismiss Blankenstein, one of the most highly paid employees in the entire federal government.

Allowing someone like Blankenstein to continue overseeing fair lending enforcement negates the good will Mulvaney earned when he evolved on the Confederate flag. He has a choice to make. Will he show political courage and stand up for consumers and against bigotry or will he allow his inaction to serve as an endorsement for Blankenstein’s demented world view?

This is a legacy-defining moment for Mulvaney. For the sake of millions of Americans impacted by discriminatory lending practices each year, we implore him to make the right decision.

Karl Frisch is executive director of Allied Progress, a consumer advocacy organization based in our nation’s capital.