A GOP-backed proposal from the Senate Committee on Banking, Housing and Urban Affairs would eliminate a critical funding source for the Consumer Financial Protection Bureau (CFPB), according to legislative text released June 6.
To support its operations, the CFPB’s current funding structure allows it to request up to 12% of the Federal Reserve’s total operating expenses in 2009, adjusted annually based on the percentage increase in the employment cost index for total compensation for state and local government workers.
The Senate Banking Committee’s proposal, spearheaded by Committee Chairman Tim Scott, R-S.C., would reduce that cap from 12% to zero. The proposal goes even further than the version of the One Big Beautiful Bill Act passed by the House of Representatives on May 22, which called for the cap to be reduced to 5%. If enacted, the legislation would force the CFPB to rely on annual funding through other congressionally approved taxpayer appropriations.
Sen. Elizabeth Warren, D-Mass., who is a ranking member on the Senate committee, excoriated Scott’s proposal in a statement.
“This bill goes beyond the already extreme House bill and is yet another example of Republicans’ reckless and bloodthirsty pursuit of destroying the CFPB — an agency that has returned over $21 billion to scammed Americans — by any means necessary, after failing to get their way in court,” Warren stated.
Warren added that she believes the proposal violates the “Byrd Rule,” a section of the Congressional Budget Act of 1974 that prevents the inclusion of “extraneous” provisions in budget reconciliation bills.
Scott released a statement of his own on June 6 defending the proposed legislation.
“Congress has a mandate to deliver President Trump’s agenda for the American people — and that means streamlining the federal bureaucracy, cutting red tape and saving taxpayer dollars,” the statement read. “This legislation takes important steps to reduce waste and duplication in financial regulation while bolstering our national security, and I look forward to advancing these provisions as part of the One Big Beautiful Bill.”
