Funding for the Consumer Financial Protection Bureau would move to the congressional appropriations process and then be almost completely wiped out, under President Trump's budget proposal for fiscal 2019.
Of the $3 trillion-plus in spending cuts proposed in Trump’s budget request, $6.4 billion would come from the CFPB, the small agency tasked with regulating mortgages, credit cards, and other financial products.
The proposed cuts are noteworthy for a few reasons.
First is that the bureau is currently headed by acting director Mick Mulvaney — the same person who, in his other role as director of the Office of Management and Budget, called for the cuts.
The second is that the bureau doesn’t get funding from Congress. Instead, it receives its funding from the Federal Reserve, which in turn raises revenue from its multi-trillion dollar bond portfolio.
In documents supporting the budget, the OMB described the bureau’s ability to draw funds from the Fed as giving it “unchecked authority,” and criticized it for financial mismanagement.
For fiscal 2018, the bureau could draw up to $663 million, an amount that is set to rise with inflation.
Mulvaney’s fiscal 2019 budget proposes to reduce spending on the bureau by roughly equivalent amounts after a few years. It also calls for limiting its authority to simply enforcing existing consumer protection laws, rather than proposing new rules and policing markets for abuse or broadly defined fraud.
The former Republican congressman is "clearly working from the outside and the inside to destroy the CFPB and cripple its ability to protect consumers from financial predators," said Karl Frisch, executive director of Allied Progress, an outside group that favors a more activist agency.
Trump appointed Mulvaney to run the bureau in November after director Richard Cordray left. In the time since, Mulvaney has slowed the agency’s efforts to implement new rules and take action against some companies.
Conservatives generally have opposed the agency since it was created by the 2010 Dodd-Frank financial reform law.
The fiscal 2018 budget written by Mulvaney also called for gutting the CFPB, although that was before he took over responsibility for it.