On July 30, the CFPB’s Chief Legal Officer, Mark Paoletta, responded to a June GAO letter which raised several questions about the Bureau’s authority to request or decline funding. In particular, the CFPB focused on GAO’s allegation that Acting Director Russel Vought’s decision to decline to request the full amount of funds available from the Fed constituted an illegal impoundment under the Impoundment Control Act.
In its response, the CFPB criticized what it described as GAO’s “weaponization” of the Impoundment Control Act for political purposes, arguing that such actions may undermine GAO’s credibility with both the executive branch and Congress. The CFPB defended Acting Director Vought’s decision not to request additional funds from the Fed, stating the director has sole discretion to determine the amount “reasonably necessary” for the Bureau’s operations, subject to a statutory cap of 6.5 percent of the Fed’s total operating expenses after inflation. The CFPB asserted that declining to draw funds, given an existing balance of $711.6 million, does not constitute an illegal withholding under the Impoundment Control Act. The CFPB also asserted that GAO’s allegations were improperly based on a social media post by Acting Director Vought and did not consider or address the Bureau’s formal notice letter to the Fed which set forth its reasoning for declining to request additional funds. Mr. Paoletta sent a copy of his response to “Congressional leadership” noting that Congress may “be interested in this most recent attempt by GAO to undermine both President Trump and Congress.”
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