White House Budget Director Mick Mulvaney, in his unprecedented simultaneous role as acting head of the controversial Consumer Financial Protection Bureau, on Monday submitted the Trump administration’s fiscal 2019 budget containing a proposal to restructure the bureau and cap its special funding from the Federal Reserve.
The budget proposed limiting the Federal Reserve funding for the independent regulatory agency at $147 million below current levels in 2019 and then $610 million below current funding in 2020, when Congress would enact an appropriation. Hence, in the decade from 2019-28, the bureau would lose more than $6.4 billion without Congress increasing funding.
Since CFPB statutorily receives funding from the Federal Reserve, the plan would require Congress to amend the 2010 Dodd-Frank Financial Reform Act.
The consumer bureau “has broad authority to unilaterally develop and enforce regulations irrespective of congressional intent or economic impact,” the budget documents said. “The CFPB's short history is rife with examples of the poor financial and personnel management decisions that can result from this form of unchecked authority.”
In addition, the proposal would restrict CFPB’s “broad authority over federal consumer law,” in order to “prevent actions that unduly burden the financial industry and limit consumer choice.”
The budget documents attacked the bureau by citing a Government Accountability Office report questioning its financial controls and reporting, while also pointing to news stories about discriminatory hiring and promotions.
Progressive groups pounced on the plan. “This budget is a testament to President Trump’s unequivocal contempt for consumers and his unwavering loyalty to the big banks, predatory lenders and Wall Street special interests that the CFPB is tasked with holding accountable,” said Karl Frisch, executive director of Allied Progress. "As CFPB’s acting director, Mulvaney has already forced the bureau to operate using its emergency reserve fund rather than requesting its normal budget. He is clearly working from the outside and the inside to destroy the CFPB and cripple its ability to protect consumers from financial predators.”
CFPB’s new strategic plan was also released Monday, and it bore Mulvaney’s imprint as well.
“If there is one way to summarize the strategic changes occurring at the bureau, it is this: we have committed to fulfill the bureau’s statutory responsibilities, but go no further,” Mulvaney said in a statement explaining that the bureau will now give equal time to the legal rights of the companies being regulated. “By hewing to the statute, this strategic plan provides the bureau a ready roadmap, a touchstone with a fixed meaning that should serve as a bulwark against the misuse of our unparalleled powers.”