House Bill Likely D.O.A. Because of Proposed Funding Cap on CFPB (April 23, 2015)
Spoiler alert: A bill approved yesterday by the U.S. House of Representatives basically will be dead on arrival as President Barack Obama has vowed to veto any legislation that tries to touch the purse strings of the CFPB. The House approved the Bureau of Consumer Financial Protection Advisory Boards Act by a vote of 235-183 that would require representation of small businesses during the CFPB’s rulemaking process.
However, an amendment places a cap on the amount of funding the CFPB director can request from the Fed. Although text of the amendment is not yet available, reports suggest it would cut the amount of funding the CFPB can request from the Fed by $9 million each year for the next five years and—according to CFPB estimates—also would result in a $100 million budget cut over the next decade.
“These reductions to the caps could result in, among other things, undermining critical protections for families from abusive and predatory financial products,” the White House said in a statement
The main portion of HR 1195 would give representation to small businesses dealing with financial services products to advise CFPB regulators. The legislation also makes permanent two existing advisory boards representing credit unions and community banks. Currently, both boards are voluntary and could be eliminated at any time by CFPB Director Richard Cordray.
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