Senate Banking, Housing and Urban Affairs (Banking Committee) Republicans have received the Senate Parliamentarian's approval to cut the CFPB's funding. As a result, in the large budget reconciliation bill now being written in the Senate the amount will drop from a maximum of 12% of the Federal Reserve's inflation adjusted profits in 2009 to 6.5% of those profits.
The provision would save $2 billion a year, the Republicans said. They added that the provision does not affect the bureau's ability to request funds from Congress.
Banking Committee Republicans originally proposed eliminating all CFPB funding by decreasing its funding cap to 0%. However, Senate Parliamentarian Elizabeth MacDonough ruled that provision could not be offered in the massive budget bill.
The House-passed version of the reconciliation measure would set funding for 2025 at no more than $249 million, with an annual adjustment for inflation.
The reconciliation bill is exempt from a Senate filibuster and only requires 50 votes to pass.
Republicans on Capitol Hill have long argued that the CFPB was unaccountable. They have advocated for the bureau being funded through the annual appropriations process. However, the Supreme Court has ruled that the funding method is constitutional.
The Banking Committee did not address the fact that the CFPB is only allowed under Dodd-Frank to be funded out of "combined earnings of the Federal Reserve System" and there have been no combined earnings of the Federal Reserve System since September, 2022.
Senate Budget Committee Chairman Sen. Tim Scott, R-S.C., hailed approval of the CFPB provision.
"After working closely with my colleagues on the committee and across the Republican conference, as well as the Senate Parliamentarian, we're in a position to advance legislation that helps deliver on President Trump's mandate to cut waste and duplication in our federal government and save hardworking taxpayer dollars," Scott said. "The committee's language decreases the Consumer Financial Protection Bureau's funding cap without affecting the statutory functions of the Bureau."
However, Banking Committee ranking Democrat Sen. Elizabeth Warren, D-Mass. blasted Republicans and said Democrats will introduce an amendment on the floor to strip the provision from the bill.
"Donald Trump and Republicans tried to shut down the CFPB by gutting its entire operating budget to 0%," she said. "We fought back and won. Now, Senate Republicans will bring to the floor a proposal that slashes the agency's available budget so they can hand out more tax breaks for billionaires and billionaire corporations."
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