President’s Budget Proposes Changes to CFPB Funding Structure
Last Monday, President Trump sent Congress a record $4.8 trillion budget proposal for the 2020 fiscal year. The budget also includes a proposal that would subject the Consumer Financial Protection Bureau (CFPB) to Congressional appropriations, a long-standing goal by Congressional Republicans.
Under the Dodd-Frank Act, the CFPB currently receives its funding from the Federal Reserve. Congressional Republicans have long argued that Congress should provide the funding for the CFPB, which would make the federal agency more accountable to Congress.
The CFPB “is an independent agency with a single unaccountable director who is able to draw funding from the Federal Reserve without oversight from the Congress,” said the budget proposal. “The proposed reforms would impose financial discipline, reduce wasteful spending, and ensure appropriate congressional oversight, by subjecting the Agency to discretionary appropriations starting in 2020.”
While the proposed budget calls for CFPB restructuring, it also calls for an increase in funding for the CFPB at $636 million, which is substantially more than the $533 million estimated by CFPB Director Kathy Kraninger.
The president’s budget proposal now heads to Congress where Congressional Democrats have criticized it with Senator Chuck Schumer deriding it as a “gut punch to the American middle class.”