WASHINGTON — House lawmakers clashed this week over a bill making changes to the Consumer Financial Protection Bureau that would cap the agency's budget in coming years.
The Bureau of Consumer Financial Protection Advisory Boards Act, by Rep. Robert Pittenger, R-N.C., would codify two advisory boards for community banks and credit unions that the CFPB has already assembled and establish a new Small Business Advisory Board. But disagreement broke out over the bipartisan measure — which passed out of the committee last month with strong Democratic support — when Republicans added an amendment to fund the bill with cuts to the CFPB's budget. The House approved the legislation Wednesday by a vote of 235-183, largely down party lines.
"An agency as powerful as the CFPB will benefit from the advice of small businesses, community banks and credit unions," Financial Services Committee Chairman Jeb Hensarling, R-Texas, said in a press release. "The CFPB should listen to them so it can issue smart regulations rather than dumb regulations that harm Main Street America."
Democrats pushed back on the budget change, which would cap the agency's funding requests for fiscal years 2020 and 2025 to offset the $9 million the measure is estimated to cost. The CFPB receives its funding as transfers from the Federal Reserve and is not part of the congressional appropriations process — a perennial sore spot for the GOP.
"The bill before us today is just the latest instance of Financial Services Committee Republicans snatching defeat from the jaws of victory," Rep. Maxine Waters, D-Calif., ranking member on the banking panel, during a heated debate Wednesday afternoon. "It makes clear their commitment to do all they can to undercut the Consumer Financial Protection Bureau — an agency with an extraordinary record of success protecting consumers, reining in bad actors, and ensuring that we do not return to the predatory practices that put this nation on the verge of economic collapse less than 10 years ago."
Critics argued that the House has repeatedly waived "pay for" rules in recent years, and warned that the provision could cut the agency's budget by as much as $100 million over the next ten years.
"The CFPB itself estimates Chairman Hensarling's poison pill amendment will cut its budget by about $45 million over the next 5 years and by $100 million over the next ten years — capping it at substantially less than the amount that they are currently able to request," Waters added. "Make no mistake about the intent of the Hensarling Amendment — it is designed to back Democrats into a corner by attaching an unacceptable provision cutting the CFPB's budget to a proposal that Democrats supported in Committee."
The bill would likely face similar Democratic opposition were it to come up for a vote in the Senate. The White House threatened to veto the amended bill Tuesday in a Statement of Administration Policy, charging that the funding provision "is solely intended to impede the CFPB's ability to carry out its mission of protecting consumers in the financial markets."