CFPB Funding Cuts Get OK From Senate Parliamentarian

The future of the Consumer Financial Protection Bureau’s (CFPB) funding is once again uncertain.

That’s because Senate Republicans have gotten permission from the chamber’s parliamentarian to include a measure in President Donald Trump’s tax bill that slashes funds for the agency, Reuters reported Friday (June 27). 

The measure would reduce the consumer watchdog agency’s funding by nearly half, the report said. If approved, it would add by the Republicans’ ongoing effort to curb the CFPB’s powers.

According to Reuters, Sen. Tim Scott, R-S.C., who chairs  the Senate Banking Committee, said Parliamentarian Elizabeth MacDonough would allow a measure lowering the legal cap on CFPB funding to be approved via simple majority vote.

If approved, the measure would limit the CFPB’s funding to 6.5% of the Federal Reserve’s earnings, down from 12%. As Reuters noted, this would mean the bureau would likely employ significantly fewer people and have a more limited scope.

MacDonough had previously determined that a version of the measure that would have cut CFPB’s funding limit to 0% could not be included in the bill — dubbed the “One Big Beautiful Bill” — which is set for a vote in the Senate in the coming days.

The report quoted a statement from Scott, who said the cuts would reduce “waste and duplication in our federal government and save hardworking taxpayer dollars,” while also pointing out that the CFPB is funded by the Fed, and is thus not supported by taxpayers. 

The CFPB has been a target of Republican attacks since its inception, with critics calling it a burden on free enterprise. Trump has gone as far to call for its elimination, and its pushing to lay off 90% of the agency’s staff.

Democrats have defended the CFPB for its work in protecting consumers. Among its proponents is Sen. Elizabeth Warren, D-Mass., who has said her party would introduce a measure to block the funding cut. 

Meanwhile, other entities have begun to step in as the future of the CFPB remains in doubt, PYMNTS reported earlier this month.

“As the agency itself has been walking back, or outright canceling, its own rulemaking, there’s a flurry of activity at the state level where lawmakers and attorneys general are, in effect, stepping in for the bureau, levying lawsuits and legislation that treads ground typically covered by the consumer-focused watchdog,” that report said.

“For the providers, the state-by-state level actions mean there’s an increasingly fragmented regulatory terrain to navigate.”

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