House GOP Looks to Cut CFPB Funding, Warren Defends

Obama’s proposed budget, released earlier this week, added roughly $6.5 billion in spending for financial regulators, Bloomberg News reported. But a provision from House Republicans may mean a lot less money than expected for the newly forming Consumer Financial Protection Bureau (CFPB).

Boomberg crunched some of the numbers and found that implementing Dodd-Frank could mean 5,000 new jobs across eight agencies including 1,225 hires for the CFPB, headed by White House adviser Elizabeth Warren.

While the funding falls short of spending authorized for the SEC in Dodd-Frank by about 100 million, the budget was well received by the commission, as represented in a statement by Chairman Mary Schapiro in a statement following the budget release.

Funding for the CFPB overall looks less certain, however, pending a U.S. House Republican movement to cut the spending of the bureau by 40%. “A provision in the so-called continuing resolution that would limit Federal Reserve transfers to $80 million,” reported Bloomberg BusinessWeek, is in stark contrast to the $134 million that Obama’s 2011 included for the CFPB.

In a speech given for the Consumers Union’s 75th anniversary celebration following the budget release, Warren encouraged supporters of the CFPB to remain defensive.

“Many of those who have opposed the CFPB are still trying to chip away at its independence by subjecting it entirely to Congressional appropriations without any dedicated funding from the Federal Reserve,” Warren said. “While the banking regulators charged with preserving the safety and soundness of financial institutions and ensuring consumer protection compliance by smaller banks would continue to receive independent funding, the agency in the financial regulatory system with lead responsibility for protecting consumers would face a different set of rules—rules that threaten its independence.”

Read Warren’s full remarks to the Consumers Union.

Written by Elizabeth Ecker



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