Consumer advocates are up in arms over a budget amendment, approved Thursday by the Senate Budget Committee, that would end the independent funding of the Consumer Financial Protection Bureau and instead bring it under the congressional appropriations process.
Meanwhile, House Ways and Means Chairman Paul Ryan, R-Wis., also plans to vote next week on H.R. 1105, The Death Tax Repeal Act of 2015, which would repeal the estate tax. However, such a measure would likely be vetoed by President Barack Obama, who supports higher estate taxes.
Sen. David Perdue, R-Georgia, introduced the CFPB funding amendment Thursday to the Senate’s 2015 Budget Resolution, stating that the “reckless” CFPB was “spawned from the disastrous Dodd-Frank financial regulation law,” and that CFPB is “a rogue agency that dishes out malicious financial policy and creates new rules and regulations without any oversight from Congress.”
Furthermore, argued Perdue, a freshman senator who has been CEO of several major companies including Reebok, “the agency itself has failed to operate within its own budget and proven it is more concerned with preserving its own power than protecting the public.”
The CFPB currently gets its funding from and operates under the Federal Reserve and is “unaccountable to Congress,” Perdue said.
Dodd-Frank established the CFPB’s budget at as much as 12% of the Fed’s annual operating expense. “That is roughly $600 million without any Congressional oversight over the agency’s functions,” Perdue stated.
But Americans for Financial Reform decried Perdue’s amendment, stating that putting the CFPB under congressional appropriations “would cripple the first and only financial regulator with a mandate to put consumers’ interests first.”
Like other bank oversight agencies, AFR said, “the CFPB is currently funded in a way that insulates it from financial industry pressure.”
By approving Perdue’s amendment, the Budget Committee “is acting on behalf of Wall Street banks and predatory lenders who opposed the CFPB’s creation and have fought it since, precisely because they do not want it to succeed.”
Enacting Perdue’s measure “would be a green light for more of the tricks and traps that characterized the banking and lending world for too long, and that the CFPB is working to clean up,” AFR said.
The full House and Senate will consider their budget committees’ framework proposals next week.
— Check out DOL’s Authority to Define Fiduciary Questioned on ThinkAdvisor.