White House Threatens to Veto Bill That Cuts CFPB Funding

President Barack Obama has threatened to veto a proposed amendment to the Consumer Financial Protection Act of 2010 that the White House claims would reduce the amount of funding the CFPB director can request.

H.R. 1195, known as the Bureau of Consumer Financial Protection Advisory Boards Act, was introduced in the House by Robert Pittenger (R-North Carolina) and Denny Heck (D-Washington) on March 2. The bill calls for the establishment of advisory boards or councils within the CFPB of 15 to 20 members each for small businesses, credit unions, and community banks. The stated purpose of each advisory board or council is to "advise and consult" with the CFPB on issues that impact their respective groups. The bill was approved in the House Financial Services Committee earlier this year by a vote of 53 to 5.

A recently proposed amendment to the bill by House Financial Services Committee Jeb Hensarling (R-Texas), however, reduces the amount of funding the CFPB director can request by about $45 million and $100 million for the fiscal years of 2020 and 2025, respectively. The White House said in its statement that "These reductions to the caps could result in, among other things, undermining critical protections for families from abusive and predatory financial products."

The bill's co-sponsor, Heck, is urging his fellow Democrats to oppose the amendment to the bill, saying that Hensarling "put the torch" to his bill.

Republicans have been attempting to chip away at the CFPB, and at the Dodd-Frank Act which created the Bureau, for the last three years but have made an extra push since gaining a majority in both the House and the Senate last November. Democrats have vowed to fight the Republicans' attempts to reduce Dodd-Frank or the CFPB's power, but last week, a bill passed in the House with overwhelming bipartisan support (a vote of 401 to 2) that would subject the CFPB to the provisions of the Federal Advisory Committee Act, making the proceedings of each advisory committee and subcommittee of the CFPB open to the public. The bill was one of several introduced in early March by Representative Sean Duffy (R-Wisconsin).

Other legislation attempting to reform the CFPB is currently pending. In February, Representatives Steve Stivers (R-Ohio) and Tim Walz (D-Minnesota) revived a bipartisan bill that would create an independent Inspector General for the CFPB that is appointed by the president and approved by the Senate. The Bureau currently shares an IG with the Federal Reserve, a position that is appointed by the Fed chair and not subject to Senate approval.