Here’s another way Republicans are coming after the Consumer Financial Protection Bureau.
The GOP wants to severely limit the fledgling agency’s initial appropriations — just as its staffing up and growing into a functional oversight body.
Rep. Rush Holt (D-NJ) discovered the measure buried in the House Republicans’ new spending bill. He and his colleagues Barney Frank (D-MA) and Brad Miller (D-NC) are circulating a letter to colleagues to draw attention to the plan.
“Section 1517 of the Republicans Continuing Resolution would restrict the amount of money the CFPB can spend for Fiscal Year 2011 to less than the amounts the agency expects to need, and is a clear attempt to hamstring the new, independent agency as it hires staff and begins the critical work of providing clarity and security to the system of consumer finance,” they write. “This back-door attempt to weaken the CFPB is in direct conflict with the financial reform law which says, ‘…the funds derived from the Federal Reserve System pursuant to this subsection shall not be subject to review by the Committees on Appropriations of the House of Representatives and the Senate.'”
Later this year, the CFPB will become housed in the Federal Reserve, and draw its funds entirely independently of Congress. But until then, it’s being staffed up within the Department of the Treasury, and Republicans want to limit how much money the Fed can provide for that effort. “During fiscal year 2011, the Board of Governors of the Federal Reserve may not transfer more than $80,000,000 to the Bureau of Consumer Financial Protection for activities authorized to be carried out by the Bureau under title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”
Later this Congress, Republicans may try to transfer the CFPB into the Treasury, so they can fiddle with its funding on a more regular basis. You can read the entire letter below.
Dear Colleague:
If we should have learned only one lesson from the financial crisis of 2008, it should be that when we protect consumers, we protect the health of the entire financial system.
That is why we want to bring to your attention the House Republicans’ attempt to handcuff the newly created Consumer Financial Protection Bureau as it prepares to assume responsibility for safeguarding the nation’s consumers this summer. Section 1517 of the Republicans Continuing Resolution would restrict the amount of money the CFPB can spend for Fiscal Year 2011 to less than the amounts the agency expects to need, and is a clear attempt to hamstring the new, independent agency as it hires staff and begins the critical work of providing clarity and security to the system of consumer finance.
This attempt is particularly concerning, because last year, after an open process that included a rare, televised House-Senate conference, Congress agreed that in order for this new financial watchdog to be effective, it must be independent and adequately funded. By deriving its operating budget from the Federal Reserve, it would be insulated from the types of partisan fights on Capitol Hill in which we find ourselves today.
Let us be clear: this back-door attempt to weaken the CFPB is in direct conflict with the financial reform law which says, “…the funds derived from the Federal Reserve System pursuant to this subsection shall not be subject to review by the Committees on Appropriations of the House of Representatives and the Senate.”
Our amendment would stop the Republicans’ attempts to make an end-run around this important legislation, which provides the strongest consumer protections and reforms to our financial system since the Great Depression.
Sincerely,
RUSH HOLT
Member of CongressBARNEY FRANK
Member of CongressBRAD MILLER
Member of Congress
