CFPB's Tough Monday: Ripped in Budget and Reined in by New Chief

(Bloomberg) -- The Trump administration’s determination to revamp the Consumer Financial Protection Bureau took shape Monday with its acting head pledging to narrow the agency’s focus just hours after the White House ripped the regulator in its annual budget proposal.

The CFPB will “will go no further” than the mission outlined in the 2010 Dodd-Frank Act, Mick Mulvaney, its temporary director, said in a revised five-year strategic plan for the regulator. Doing so will serve as a “bulwark against the misuse of our unparalleled powers,” he added.

Mulvaney, whose permanent job is leading the Office of Management and Budget, has been a longtime critic of the agency that regulates mortgages, credit cards and other consumer products. The OMB plays a key role in formulating the president’s government spending plan, which was aggressive this year in calling out the CFPB.

A key criticism: the agency’s director has too much power to issue rules and penalize companies without accountability from lawmakers.

The CFPB’s brief history has been “rife with examples of the poor financial and personnel management decisions that can result from this form of unchecked authority,” President Donald Trump’s budget proposal said. The spending request called for cutting the agency’s funding and limiting its enforcement powers.

Since taking over the CFPB in November, Mulvaney has vowed to dial back the assertive stance taken by Richard Cordray, the Obama administration appointee who ran the agency from 2012 to 2017.

In the 16-page strategic plan released Monday, Mulvaney said “pushing the envelope in pursuit of other objectives ignores the will of the American people, as established in law by their representatives in Congress and the White House.” That sentiment differs markedly from the CFPB’s previous, lengthier plan issued in 2013, which said the agency would try to “empower consumers” and promote better financial-industry practices.

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