CFPB director a new hero on the right

The acting director of the Consumer Financial Protection Bureau (CFPB), former congressman Mick Mulvaney, has submitted a budget request that may be a first in the history of government.

The CFPB is an independent agency that receives its funding from the Federal Reserve.  The director must submit a budget request to the Fed every quarter.  The most recent budget request came from former director Richard Cordray, an Obama appointee.  Cordray asked the Fed for $217 million.

But Mulvaney shocked official Washington by making a budget request for zero dollars.  That's $0.00 in taxpayer funds. 


In a letter to Fed [c]hairwoman Janet Yellen on Thursday, interim [d]irector Mick Mulvaney said the bureau already has $177.1 million in its coffers – more than enough funds to cover the $145 million the CFPB's expenses for the second fiscal quarter.

"Simply put, 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," Mulvaney wrote in the letter.

And while Cordray may have kept a "reserve fund" in case of emergencies, Mulvaney said he didn't see a reason for it since the Fed has regularly supplied the money the agency needs.  He also questioned whether the the [sic] law even allows the CFPB to maintain such a reserve fund.

Instead, Mulvaney, who is also Trump's budget director, said the Fed could use that money to help pay down the country's 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.

Holy crow!  A bureaucrat actually wanting his agency staffers to be "responsible stewards of taxpayer dollars"?  When was the last time you heard that?  And when was the last time a federal agency admitted that it had enough funding and that it didn't need any more?

There is an old bureaucratic trick in Washington that, at the end of the fiscal year, bureaucratic managers scramble to find ways to allocate money that has been appropriated but not spent.  The reason is simple.  If Congress found out they had money left over at the end of the fiscal year, Congress might cut their budgets.

Bureaucrats can get very inventive when thinking up ways to spend tax dollars.

But now we have Mick Mulvaney saying thanks anyway, but he doesn't need the funds.  There is a method to Mulvaney's seeming madness: he wants to get rid of the CFPB, which was designed to "protect" consumers but instead has issued a blizzard of regulations that makes it harder for money-lenders to make loans.

In essence, the agency "protects" consumers from their own stupidity and ignorance.  The CFPB was born of a myth that the financial and housing crisis was caused by unscrupulous lenders who tricked consumers into getting bad loans.  Surely there were a few of those.  But most foreclosures were caused not by evil lenders, but by people who either took on too much debt or didn't understand the terms and conditions of the loan.

It raises an interesting question: should the federal government protect us from ourselves?  The Obama administration believed so, but Mulvaney and many conservatives are skeptical.

If Mulvaney succeeds in phasing out the CFPB, it will be a job well done.

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