Q: When was the last time a federal agency director asked for no money to fund its operations?
A: This week, when Mick Mulvaney, the Trump administration budget director tapped as interim director of the Consumer Financial Protection Bureau, said he needed $0 to cover the watchdog’s second-quarter expenses.
Mulvaney, a consistent critic of the consumer agency he now heads, wrote in a Jan. 17 letter to Federal Reserve Chair Janet Yellen that the watchdog had $177.1 million left over at the start of the federal government’s 2018 fiscal year in September.
He said the money had been kept as a reserve fund during the tenure of Richard Cordray, the Obama administration appointee who headed the consumer bureau before Mulvaney was appointed by President Trump late last year.
The consumer bureau’s projected second-quarter expenses total roughly $145 million. Therefore, wrote Mulvaney, “I have been assured that the funds 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.”
He asked the Fed to redirect the $145 million it would have sent to the consumer bureau instead to the U.S. Treasury, where it might make a small dent in the federal deficit.
The consumer bureau was created through Dodd-Frank Wall Street reforms after the U.S. financial crisis a decade ago. Unlike most other federal agencies, its funding comes directly from the Fed, with no oversight by Congress — a sore point for Mulvaney and many other Capitol Hill Republicans.
The Federal Reserve is largely self-financed and doesn’t rely on taxpayer funds.
Conservatives endorsed Mulvaney’s funding decision. However, some consumer advocates characterized the move as the latest in what they said were Trump administration efforts to tame the watchdog that during Cordray’s tenure returned nearly an estimated $12 billion to more than 30 million consumers hurt by financial companies.
“There can be no clearer signal of Mick Mulvaney’s intent to defang and dismantle the Consumer Financial Protection Bureau than his request of zero dollars in funding and his decision to instead drain the Bureau’s reserve,” said Karl Frisch, executive director of Allied Progress,” a consumer group backed in part by the New Venture Fund, a public charity focused on conservation, education and other issues.
Mulvaney is expected to head the consumer bureau until Trump nominates someone to succeed Cordray for a full term. While acknowledging his past criticism of the agency, Mulvaney has acknowledged he cannot dismantle it without congressional and White House approval.
Speaking at a White House briefing Friday, Mulvaney said he will “continue to fulfill the statutory mission of the CFPB.”
Earlier this week, Mulvaney announced plans for a new rule-making procedure that could roll back safeguards the watchdog finalized last year to protect consumers from so-called payday lenders that provide high-interest loans to borrowers trying to make ends meet between paychecks.