WASHINGTON—Support for the Consumer Financial Protection Bureau Accountability Act has been expressed in a letter from America’s Credit Unions to Sen. Bill Hagerty (R-TN).
The legislation would which require the CFPB’s funding be appropriated by Congress, an issue that was the subject of a recent ruling by the Supreme Court that found the funding outside the appropriations process to be constitutional.
“Currently, the Federal Reserve is required to provide whatever funding that the CFPB requests, within certain limits, a very unusual arrangement that allows the CFPB to avoid the fiscal accountability to which the rest of the executive branch is subject,” wrote ACU President/CEO Jim Nussle. “The broad power that the CFPB wields over financial products that affect every consumer makes it especially important that the Bureau operates with maximum transparency and accountability.”
Constitutionality of Funding Challenged
Nussle also suggested the current status of the constitutionality of CFPB funding remains unclear, despite the recent U.S. Supreme Court ruling.
“The CFPB’s funding mechanism, which draws its budget from the Federal Reserve’s earnings, is potentially invalid and unconstitutional because the Federal Reserve has not had earnings since September 2022,” added Nussle. “This raises significant legal questions about whether the CFPB has been lawfully funded since then and whether any of its actions taken since then are valid. Your bill would help ensure greater legal certainty in this area.”
Calls to Fund Various CU Priorities
Meanwhile, ahead of floor consideration for the Fiscal Year 2025 State, Foreign Operations, and Related Programs bill, America’s Credit Unions wrote to Speaker of the House Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) and members of the House of Representatives to advocate for a FY2025 $50 million funding level for the U.S. Agency for International Development’s (USAID) Cooperative Development Program (CDP), in addition to funding the World CouN.C.il of Credit Unions’ (WOCCU) efforts through the CDP funding.
In the letter, ACU’s Nussle pointed to credit unions’ historic role in responding to disaster and crisis situations, stating that “credit unions become a source of community stability as people come together to see that their families are fed.”
‘Unique’ Model Cited
“The credit union cooperative model is unique in that it provides them with the ability to weather financial shocks that draw consumers to them during times of crises,” wrote Nussle. “This must be recognized by policy makers to allow credit unions to play an important role in the recovery during a time of economic uncertainty.”
In addition, Nussle also pointed to WOCCU’s worldwide efforts to promote economic freedom and growth, financial inclusion, financial access, and more.