The U.S. House of Representatives recently passed a sweeping federal budget bill that could significantly reduce funding for the Consumer Financial Protection Bureau (CFPB), marking a major shift in how the agency would be financed moving forward.
Nicknamed the āOne Big Beautiful Bill Act,ā the legislation proposes capping the CFPBās annual funding at $249 million ā a sharp reduction from the over $700 million it currently accesses from the Federal Reserve. The bill passed narrowly, 215-214, with support falling along party lines.
Rep. French Hill, R-Ark., who chairs the House Financial Services Committee, explained the motivation behind the cap: āWe put a firm limit on the Consumer Financial Protection Bureauās budget, setting its funding at no more than $249 million for 2025, with an annual inflation adjustment thereafter.ā
Currently, the CFPB is authorized to draw up to 12% of the Federal Reserve’s annual operating budget. Under the new House proposal, that would be slashed to just 5%. For fiscal year 2024, the bureau had access to $764 million from the Fedās budget, according to government records.Ā
In addition to cutting the CFPBās primary funding stream, the bill includes a provision to redirect money from the Civil Penalty Fund ā a pool originally created to provide relief to consumers harmed by financial wrongdoing. The proposed change would transfer leftover funds to the U.S. Treasuryās general fund after victims have been compensated.Ā
Supporters of the legislation say the goal is to curb government spending and promote fiscal responsibility. āThis committee will do its part to reduce the deficit and decrease direct spending, so that Congress can enact pro-growth tax policies,ā Hill said during Aprilās budget markup hearing.Ā
The Financial Services Committee approved the budget section 30-22, once again along party lines. Committee Republicans claim their segment of the budget alone would produce over $1 billion in savings.Ā
The legislation still awaits review in the U.S. Senate. While it remains unclear how the Senate will respond, similar proposals have been floated previously, including legislation sponsored by Sen. Tim Scott, R-S.C., which would require the CFPB to be funded through the normal congressional appropriations process.Ā
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Author:Ā Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clientsā criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jenniferās guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
