WASHINGTON–Should the Financial CHOICE Act pass Congress as currently written it would result in a reduction in direct federal spending over a 10-year period from 2017-27 of $30.1 billion, while revenues would be reduced by $5.9 billion, according to estimates published by the Congressional Budget Office (CBO).
Although the legislation also affects NCUA, the CBO said most of the savings would stem from repealing Federal Deposit Insurance Corporation’s authority to use the Orderly Liquidation Fund and from changing how the CFPB is funded.
The Financial CHOICE Act (HR 10), which has the support of credit unions, has passed out of the House Financial Services Committee and now awaits a floor vote. Its fate is much less certain in the Senate (see related story).
The CBO analysis notes that “Under current law, the CFPB is funded by transfers from the Federal Reserve and the agency’s spending is recorded as direct spending. Title VII would amend current law to make spending for the CFPB (renamed the Consumer Law Enforcement Agency) subject to annual appropriations. The bill would authorize the appropriation of $485 million for fiscal year 2018, an amount equal to the amount transferred from the Federal Reserve to the CFPB in 2015. CBO estimates that enacting this provision would reduce direct spending by $6.9 billion over the 2018-2027 period and cost $485 million over the 2018-2022 period, subject to appropriation of the authorized amounts. HR 10 would not authorize appropriations for the agency after 2018, but CBO estimates that its operations would cost about $5 billion over the 2019-2027 period, assuming appropriations were provided in those years that were equal to the amount authorized for 2018, adjusted for anticipated inflation.”
The CBO report also addresses how the legislation, as currently proposed, would affect NCUA. “Under current law, the NCUA imposes fees on all federally chartered credit unions to pay for its operations. Under HR 10, the NCUA would instead impose a fee on all credit unions, including those chartered by states, to offset the costs of an annual appropriation for the agency’s administrative operating costs. Under the bill, the total collections from credit unions would be higher than under current law because the bill would not reduce current assessments as much as current spending for administrative costs. By making the NCUA’s administrative costs subject to annual appropriation, this provision would, by CBO’s estimates, decrease the deficit by $2.3 billion over the 2018-2027 period, reflecting decreases in direct spending of $3.4 billion and reductions in offsetting receipts of $1.1 billion over the 2018-2027 period. Because the NCUA would collect fees to offset any spending of appropriated funds, implementing the provisions regarding the NCUA would have no net effect on spending that is subject to annual appropriations.”
The CBO estimates that implementation of the bill would cost $1.8 billion.