Mulvaney requests no funding for consumer agency in 2Q

NEW YORK (AP) - The Trump-appointed acting director of the federal government's consumer watchdog agency requested zero dollars of funding for its second-quarter budget, saying he intends to first spend down the agency's rainy day fund.

In a letter to the Federal Reserve, which directly funds the Consumer Financial Protection Bureau, Mick Mulvaney said the bureau does not need any new funds to operate during its second quarter. The bureau has on deposit $177.1 million to cover emergencies and contingencies, which Mulvaney says is too large. He said he intends to spend that down by roughly $145 million.

The $145 million budget estimate is roughly equal to what Richard Cordray, who was appointed by Obama as the first permanent director of the bureau, requested for the CFPB in the second quarter of 2017.

The CFPB gets its funding from the Fed, and whatever profits the nation's central bank produces each year gets turned over to the federal government. By not requesting additional funds for the CFPB, Mulvaney argues, those additional funds can be turned over to the Treasury Department to pay down a tiny amount of the government's debts.

Mulvaney became acting director of the CFPB in late November after Cordray stepped down to run for governor in Ohio. Since taking over, he has been moving quickly to reshape the bureau. The Bureau announced just this week that it intends to revisit regulations it finalized over payday loans and also intends to review all aspects of its operations.

What budget priorities Mulvaney has for the CFPB will become more clear once he makes his request for third-quarter funding later this year as the agency spends down its rainy day fund.

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Ken Sweet covers banks and financial issues for The Associated Press. Follow him on Twitter at @kensweet.