By Douglas Gillison and Daniel Wiessner
(Reuters) - Top officials at the embattled U.S. Consumer Financial Protection Bureau have not allowed staff to resume supervising financial companies despite committing to engage in all legally-required work, according to an internal email seen by Reuters.
The apparent decision to keep supervision inert could run counter to claims the CFPB has made in court that it remains committed to meeting its legal obligations. The agency has denied in court papers that intends to abolish the agency completely, arguing that some of its functions are continuing.
In an email sent on Monday, Cassandra Huggins, a top official in the CFPB's division of supervision, said senior officials at the agency had confirmed that supervisory work is not to resume, despite staff being told one day prior that they should still be carrying out all legally mandatory work.
"We have requested and received clarification that their message was not intended to authorize the reinstatement of supervision/examination activity, even though the Bureau is required by law to carry out these activities," Huggins wrote, according to a copy seen by Reuters.
The CFPB is the only federal agency with the power to supervise non-bank financial institutions for compliance with consumer financial law. The CFPB also has primary authority to police consumer financial protection laws in larger banks.
Huggins' message comes one day after a separate internal message from Mark Paoletta, the top lawyer at the CFPB, who said he was writing to be certain "everyone is carrying out any statutorily required work."
According to a copy of that email seen by Reuters, Paoletta emphasized staff should be fulfilling legally required duties amid a broader effort to halt other work at the agency.
A spokesperson for the agency said Monday that it is false that staff have been told not to resume supervisory work and noted that Paoletta's email "says the exact opposite."
Staff had previously been ordered to halt supervision and examination activity by acting director Russell Vought.
On Monday, government lawyers appeared in federal court in Washington, D.C., to oppose a bid by a union representing CFPB workers, consumer advocacy organizations and others seeking a court order blocking the dismantling of the agency.
In court papers, top CFPB officials have said the agency remains committed to meeting its obligations under the law, rejecting arguments that by idling the majority of the agency's staff and canceling the bulk of its contracts, the Trump administration is violating the law.