Mick Mulvaney, President Trump’s appointee as CFPB Acting Director, has sent a letter to Fed Chair Janet Yellen “to inform [her] that for the Second Quarter of Fiscal Year 2018, the Bureau is requesting $0.” (emphasis included).
Pursuant to Section 1017(a)(1) of the Dodd-Frank Act, subject to the Act’s funding cap, the Fed is required to transfer to the CFPB on a quarterly basis “the amount determined by the [CFPB] Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, taking into account such other sums made available to the Bureau from the preceding year (or quarter of such year.)”
In his letter, Mr. Mulvaney states that he has been assured that the current balance of the CFPB’s fund at the Federal Reserve Bank of New York is sufficient for the CFPB “to carry out its statutory mandates for the next fiscal quarter while striving to be efficient, effective, and accountable.” Mr. Mulvaney indicates that the CFPB’s projected second quarter expenses are approximately $145 million and its current balance at the New York Fed is $177.1 million.
Mr. Mulvaney suggests that there is no statutory support for the CFPB’s practice under former Director Cordray of maintaining a “reserve fund” for possible financial contingencies. He states further that he sees “no practical reason for such a large reserve, since I have been informed that the Board has never denied a Bureau request for funding and has always delivered requested funds in a timely fashion” and that he intends “to spend down the reserve until it is of a much smaller size.”
Mr. Mulvaney concludes his letter with the observation that while the approximately $145 million in CFPB expenses he plans to pay from the CFPB’s reserve rather than seek new funding for “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.”