CFPB’s Mulvaney taps reserves for 2Q budget, calls for review of functions

In the latest change at the CPFB, acting director Mick Mulvaney requested $0 from Federal Reserve Chair Janet Yellen for the second quarter, instead proposing to pull from a back-up fund created by former director Richard Cordray.

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, has requested a second-quarter allocation of $0 from the Federal Reserve.

In his request letter to Fed Chair Janet Yellen, Mulvaney instead proposed dipping into the bureau’s $177 million reserve fund, which would cover the projected $145 million needed for the second quarter. The reserve fund was set up by the Obama-appointed Cordray and intended to cover unexpected costs, but Mulvaney said he saw no need for it since the Fed has always provided for the CFPB’s financial needs.

In comparison, former director Richard Cordray asked for $217.1 million for the first quarter, according to Politico, and $86.6 million for the fourth quarter.

The funds the bureau currently has are “sufficient to carry out its statutory mandates for the next fiscal quarter while striving to be efficient, effective, and accountable,” Mulvaney said in the letter.

Instead Mulvaney, who is also head of the Office of Management and Budget, suggested the Fed return the $145 million to the Treasury to 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.

This is the latest in a string of changes made by the Trump-appointed Mulvaney, who voted to dismantle the CFPB as a Republican Congressman and who called it “an awful example of a bureaucracy gone wrong” on his first day as acting director in November.

Mulvaney has also launched a review of the bureau’s functions, calling for feedback on “enforcement, supervision, rulemaking, market monitoring, and education activities.” The first request for information will focus on civil investigative demands.

“In this New Year, and under new leadership, it is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau’s statutory mandate,” Mulvaney said. “Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process.”

Just last week, Mulvaney also put the recently finalized payday lending rule under review, suggesting it might be repealed completely.

Even the language appearing at the bottom of all press releases has changed. Under Cordray, the CFPB was described as “a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules.” Now, it “helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary or unduly burdensome regulations.”

Fredrikson & Byron Law