The House Financial Services Committee has approved its part of the massive budget bill, saving some $1 billion by, among other things, slashing the CFPB's budget by more than 60%.
The Committee did so by modifying the bureau's authority to draw funds from the Federal Reserve's operating budget, limiting the agency to a maximum of 5% of the Fed's total operating expenses. The agency currently may draw 12% of the Fed's operating budget.
The change would cap 2025 spending at $249 million. By comparison, as of September. 30, 2024, the CFPB had incurred about $755.1 million in FY 24 obligations, according to a bureau report. Of that total, about $480 million was spent on employee compensation and benefits for the 1,755 bureau employees who were on-board at the end of the quarter.
The committee approved the measure along party lines, 30-22. The committee was charged with finding budget savings of at least $1 billion. Chairman Hill announced that it had exceeded that threshold, apparently due in no small part to the reduction in funding for the CFPB. Democrats offered dozens of amendments to restore CFPB funding, but all were defeated, with Republicans contending that its part of the budget bill was intended to cut spending.
In order to pass the Senate under the budget reconciliation process, only provisions that change revenue or spending may be included in the budget measure. The reconciliation process allows the measure to be considered in the Senate without the threat of a filibuster.
The CFPB has been a favorite target of Republicans. In the past, they tried to make the bureau subject to the annual appropriations process, but those efforts have failed. More recently, the Trump Administration has attempted to eliminate about 1,400 positions at the CFPB, but that effort has been blocked by a federal appeals court.
The Financial Services Committee's budget measure also would require the CFPB to return to the U.S. Treasury any amounts in the bureau's Civil Penalty Fund that remain after direct payments to victims.
Financial Services Chairman Rep. French Hill, R-Ark., said the Republican Congress must show discipline to solve what GOP members contend is a budget crisis.
"Past Congresses failed to make the tough decisions, and so now the crisis is here, confronting [the] very Americans they failed to help," Hill said at the markup. He reminded committee members that "we are here with one purpose, to do our part to put our nation back on a responsible fiscal trajectory."
Still, committee ranking Democrat Rep. Maxine Waters, D-Calif.,said it was "ridiculous" to be cutting the CFPB's budget to find savings.
"From cracking down on illegal junk fees, tackling discrimination in housing, and protecting servicemembers and students from scams – the Bureau and its hardworking employees are doing crucial work," she said.
On the other side of the Capitol, Senate Banking Chairman Sen. Tim Scott, R-S.C., may be considering even larger cuts, Politico reported. In an interview, Scott told Politico that one option being considered is to eliminate all funding for the CFPB. Scott also said he supports subjecting the CFPB to the annual appropriations process.
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