Mulvaney requests no funding for Consumer Financial Protection Bureau
Every quarter, the Consumer Financial Protection Bureau formally requests its operating funds from the Federal Reserve. Last quarter, former director Richard Cordray asked for $217.1 million. Cordray, an appointee of President Barack Obama, needed just $86.6 million the quarter before that. And yesterday, President Donald Trump’s acting CFPB director, Mick Mulvaney, sent his first request to the Fed.
He requested zero.
In a letter to Fed chair Janet Yellen obtained by POLITICO, Mulvaney wrote that the bureau already has $177 million in the bank, enough to cover the $145 million the bureau has budgeted for its second quarter. Cordray had maintained a “reserve fund” in case of overruns or emergencies, but Mulvaney said he didn’t see any reason for it, since the Fed has always given the bureau the money it needs. Mulvaney, who is also Trump’s budget director, noted that instead of advancing the funds to the bureau, the Fed could return them to the Treasury and reduce the deficit.
“While this approximately $145 million may not make much of a dent in the deficit, the men and women at the Bureau are proud to do their part to be responsible stewards of taxpayer dollars,” Mulvaney wrote.
The Trump administration has not shown much interest lately in deficit reduction, but it has shown avid interest in reining in the independent CFPB. As a member of Congress, Mulvaney (R-S.C.) routinely denounced it as an overzealous regulator, and on his first day at the bureau after replacing Cordray in November, he trashed his new workplace as “an awful example of a bureaucracy gone wrong.” And even as Cordray’s former deputy, Leandra English, has fought Mulvaney’s appointment in court, he has moved swiftly to shake up its culture.
Earlier this week, he announced the bureau would reconsider its new rules designed to protect consumers from payday lending debt traps, and yesterday, he launched a formal review of how the bureau demands information from firms it investigates. He has even revamped the agency’s mission statement; the new wording suggests that its first priority should be “identifying and addressing outdated, unnecessary, or unduly burdensome regulations.”
The bureau was created in response to the financial crisis of 2008, and under Cordray, it returned nearly $12 billion to nearly 30 million ripped-off consumers, cracking down on predatory lenders, bullying debt collectors, and a range of Wall Street scoundrels. But the financial industry and many Republicans have portrayed it as an out-of-control liberal bureaucracy, a hotbed of the anti-Trump resistance nestled inside the Washington bureaucracy, with a budget untouchable by Congress and a director with unusually broad powers. And several federal judges have rebuked the agency for overstepping its authority in pursuit of scammers.
Mulvaney has not yet laid out his plans for the bureau, but it’s clear that in general he wants it to do less, so it’s not surprising that he wants it to make do with with less money. In his letter to the Fed, he said he had been assured that the cash the bureau already has on hand is “sufficient to carry out its statutory mandates for the next fiscal quarter while striving to be efficient, effective, and accountable.”
It’s just the latest sign that change is coming to the CFPB. As Mulvaney said after his first day as acting director: “Elections have consequences at every agency.”