The Consumer Financial Protection Bureau is ramping up its assaults on the Government Accountability Office, claiming the unbiased congressional watchdog was “politicized” for questioning his resolution to reject funding for the CFPB this yr.
Mark Paoletta, the CFPB’s chief authorized officer, despatched a letter Thursday criticizing GAO for questioning Vought’s authority over the CFPB’s funds. Vought formally notified the Federal Reserve Board in February that the CFPB wouldn’t be requesting funding this yr.
In the letter, Paoletta known as Congress “reckless and irresponsible,” for funding the CFPB by the Federal Reserve System slightly than the traditional appropriations course of, which has been the topic of protracted debate for the reason that bureau was first created in 2010. The letter was first reported by the Daily Caller, and was despatched to Speaker of the House Mike Johnson and Senate Majority Leader John Thune.
Vought “acted nicely inside his authorized authorities in declining to request additional funds from the Federal Reserve System for FY 2025,” Paoletta wrote, alleging GAO had conflated a publish on X with a letter Vought despatched to Powell the identical day formally notifying the Fed that funding “wouldn’t be fairly crucial for the bureau to carry out its statutory capabilities.”
The GAO agreed to analyze the CFPB on the request of Senate Democrats who alleged the Trump administration was searching for to illegally fireplace nearly all of the company’s workers.
Vought has sparred with the GAO over the Trump administration’s unlawful withholding of Congressionally-appropriated funds. Vought’s resolution to not request funds for the CFPB, Paoletta wrote, was not an unlawful withholding underneath the Impoundment Control Act.
“We as soon as once more take problem along with your weaponization of the Impoundment Control Act of 1974 (ICA) for political functions, which continues to hurt GAO’s credibility with the Executive Branch and with Congress,” Paoletta wrote.
Vought and President Trump declare the Impoundment Control Act of 1974, which permits the president to delay or withhold congressional funding, is an infringement on government authority.
Vought, who can be director of the Office of Management and Budget, is locked in a contentious authorized battle with the CFPB’s union, which sued the company in February to halt mass firings earlier than they came about.
On Feb. 8 Vought wrote on X that the CFPB had $711.6 million “in funding available,” which he stated was “extreme within the present fiscal setting.” The CFPB wouldn’t be “taking its subsequent draw of unappropriated funding as a result of it’s not ‘fairly crucial’ to hold out its duties.”
“This spigot, lengthy contributing to CFPB’s unaccountability, is now being turned off,” Vought stated within the X publish.
A day after that publish, Vought closed the CFPB’s headquarters in Washington and instructed the company’s workers to “cease working and stand down.”
Work on the CFPB has been at a standstill since February when the company was sued by the National Treasury Employees Union, which alleged Vought deliberate to problem a mass layoff that will have reduce the workforce from 1,750 to roughly 200. The CFPB issued RIFs on April 17 however a federal decide issued an injunction on April 18 halting the layoffs. An appellate courtroom panel is anticipated to rule any day on whether or not the injunction might be lifted and RIFs can proceed.
Paoletta claimed within the letter to GAO’s basic counsel, Edda Emmanuelli Perez, that the watchdog was overly targeted on Vought’s social media posts slightly than the CFPB’s funding.
“As reckless and irresponsible as it might have been, Congress designed CFPB’s funding mechanism to insulate the Bureau from accountability to Congress relating to the quantity it requests from the Federal Reserve,” the letter states. “Any conclusion that the Acting Director lacks the authority to make his company funding willpower can’t be reconciled with statutory textual content.”
Republicans have lengthy sought modifications to the CFPB’s funding construction, and secured some modifications by the recently-passed funds invoice that President Trump signed into legislation on July 4. That invoice reduces the utmost quantity that the CFPB can request from the Federal Reserve by nearly half.
“Your boss — Congress — has thus enshrined its settlement with the Acting Director’s efforts to right-size the Bureau into legislation,” Paoletta instructed the GAO.
The CFPB’s funds is now capped at 6.5% of the overall working bills of the Federal Reserve, down from 12%, which was mandated by the Dodd-Frank Act of 2010. Last yr, the CFPB’s estimated funds was $684.9 million.
“The objective of eradicating the Bureau’s funding from the annual appropriations course of is to permit the Director — in his sole discretion — to find out the quantity the Bureau requires to perform,” Paoletta wrote to the GAO. “To learn this unambiguous grant of discretion as a requirement that the Director request the total quantity of funds out there from the Federal Reserve is untenable and a part of a politicized marketing campaign in opposition to President Trump’s historic efforts to revive fiscal sanity and effectivity to the Federal Government.”
The CFPB didn’t reply to a request for remark.
