RSSSenate Banking Committee Republicans introduced a bill last week requiring the Consumer Financial Protection Bureau to be funded through an annual Congressional appropriations process.
Introduced June 12, the bill is authored by Sen. Bill Hagerty (R-Tenn.), Ranking Member Tim Scott (R-S.C.) and seven additional committee Republicans: Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Cynthia Lummis (R-Wyo.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.) and Steve Daines (R-Mont.).
“The CFPB has continued to operate as a partisan, rogue regulator, acting far outside of its Congressional mandate and without any true accountability to Congress,” Britt said. “This commonsense legislation would ensure the bureau is held accountable to the American people.”
The bill was introduced less than one month after the Supreme Court ruled the CFPB is constitutionally funded. In a ruling authored May 16 by Justice Clarence Thomas, the Court found Congress did not violate the Appropriations Clause of the Constitution by allowing the bureau to decide how much funding to draw from the Federal Reserve up to a limit. The CFPB’s budget can be a maximum of 12 percent of the total operating expenses of the Federal Reserve. The Supreme Court found the CFPB’s appropriation of longer than two years is acceptable as other fee-based agencies including the Post Office are also not time-limited.
The Biden administration had asked the Supreme Court to review the case after a three-judge panel in the U.S. District Court for the Western District of Texas ruled the funding mechanism violated the Constitution’s Appropriations Clause because it drew funding from the Federal Reserve instead of Congress.
Similar legislation was introduced in April 2023 by Rep. Andy Barr (R-Ky.), who also proposed placing the CFPB under annual Congressional appropriations and reestablishing it as an independent agency. Barr’s bill would also establish a five-person commission led by a chair rather than a director and eliminate the bureau’s option to receive funding through Federal Reserve transfers. The bill has not passed the House or Senate.
