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Mulvaney asks Fed to withhold additional consumer bureau funding

Mulvaney asks Fed to withhold additional consumer bureau funding
© Greg Nash

The acting director of the Consumer Financial Protection Bureau (CFPB) asked the Federal Reserve on Wednesday to withhold additional funding from the agency for the second quarter of fiscal 2018.

Acting CFPB Director Mick MulvaneyJohn (Mick) Michael MulvaneyPoll: Majority disapproves of Trump's military parade plan Mulvaney travels to Middle East: report Pentagon concerns mounting about Trump’s proposed parade: report MORE requested $0 from the Fed to fund bureau operations for three months in a letter to Fed chairwoman Janet Yellen. While Mulvaney said the CFPB’s expects to spend $145 million in the next quarter, he intends to fund it through the bureau’s $177 million emergency reserve account with the Fed’s New York branch.

“I have been assured that the funds in the currently in the Bureau Fund are sufficient for the Bureau to carry out its statutory mandates for the next fiscal quarter while striving to be efficient, effective and accountable,” Mulvaney wrote.

Mulvaney's empty request is his latest effort to reshape and reign in the CFPB. The agency announced Wednesday that it would allow companies subject to its new payday lending rule to apply for a delay in complying with its first deadline. And Mulvaney announced Thursday that the CFPB would solicit complaints about its practices as he looks to loosen its hold on the financial services industry.

Under the Dodd-Frank Act, which created the bureau, the CFPB is to be funded through the Federal Reserve system. The director is empowered to request as much money as he or she deems necessary on a quarterly basis, and the Fed is obligated to match the request.

The CFPB asked for $217 million in its funding request for the first quarter of 2018, the last one issued under former director Richard CordrayRichard Adams CordrayMick Mulvaney has ignited a firestorm to rein in the CFPB Overnight Finance: Mulvaney sparks confusion with budget remarks | Trump spars with lawmakers on tariffs | Treasury looks to kill 300 tax regs | Intel chief's warning on debt Trade commission makeover should begin with dumping Obama's failed agenda MORE. The bureau filed the request Oct. 12, and it was granted Oct. 18.

Mulvaney wrote that the Fed’s history of approving every CFPB funding request gives him “no practical reason” to maintain the reserve fund started under Cordray. He also questioned the legality of maintaining the backup account and promised to slash it.

“It is my intent to spend down the reserve until it is of a much smaller size, while still allowing the Bureau to successfully perform its functions, before making an additional financial request of the Board,” Mulvaney wrote.

If the CFPB’s budget estimates hold up, the bureau would have roughly $30 million left in the reserve by the end of the second quarter.

Mulvaney boasted that the decision to send an empty funding request to the Fed would save taxpayers $145 million, since the Fed’s profits are given to the Treasury Department. He said that while the saving wouldn’t make much of dent in the deficit, “the men and women at the Bureau are proud to do their part to be responsible stewards of taxpayer dollars.”