The House Financial Services Committee voted 31-26 Wednesday in favor of moving the Consumer Financial Protection Bureau funding under the authority of an appropriations panel.
The House budget panel instructed the financial services committee to find $29.8 billion savings over the next 10 years. Republicans on the committee elected to shed $35 billion in costs from the Dodd-Frank Act orderly liquidation authority, the Home Affordable Modification Program and redirect any funds the Federal Reserve would send to the CFPB back to the Treasury Department.
The CFPB estimates it will spend $356 million in 2012 as part of its continued buildup. This will increase 26% in 2013 to roughly $448 million.
Under the Dodd-Frank Act, the bureau can use up to 12% of the Fed budget in 2013, which is estimated to be roughly $598 million. It could also request an additional $200 million above that, which CFPB Director Richard Cordray said in previous testimony the bureau is not expected to need.
Republicans claimed by moving the bureau to under an appropriations committee, the bureau would have more accountability.
“Let’s put CFPB on budget and let them come and justify why they’re hiring all these people and leasing all this space, and let’s hold them accountable. If it’s on the up and up, it won’t be a problem,” said Rep. Randy Neugebauer, R-Texas.
Democrats charged the GOP with attempting to defang the new agency.
“When we have oversight hearings in which the absent oversight is lamented, no one has lamented what the bureau has done. In fact, it has drawn praise,” said Rep. Barney Frank, D-Mass.
Frank and Rep. Brad Miller, D-N.C., made a move during the session Wednesday that silenced some on the Republican side. Each filed separate amendments to the bill that would place Office of the Comptroller and Federal Reserve regulatory spending under an appropriations committee as well.
Members on both sides of the aisle balked at the idea of placing the agencies independent in charge of ensuring the safety and soundness of the financial system under the influence of Congress.
Frank and Miller each said their amendments were bad ideas, but argued removing independence from a consumer protections agency was also troubling.
“I would not have done this in the absence of the effort to do this for the CFPB. But I don’t want to put the bureau at a disadvantage,” Frank said. “This is a request for uniformity.”
“The Fed and the OCC are responsible for ensuring our financial system remains solvent. Their mission is different. One can question whether they were up to the task. One cannot question maintaining independence of safety and soundness,” said Rep. Ed Royce, R-Calif.
Frank then asked if would be opposed to placing funding for the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, under an appropriations committee as well.
“I think you made a point,” Royce said after a long pause. “I’m considering that point.”
“A pregnant pause,” Frank said.