WASHINGTON—What’s next for the CFPB now that Republican efforts to slash its funding have been ruled out of bounds under Senate budget rules?
As CUToday.info reported, Senate Parliamentarian Elizabeth MacDonough has determined that the proposal to effectively defund the CFPB cannot proceed under reconciliation—a process that allows legislation to pass with a simple majority in the Senate.
“I do think the Senate is going to come out with a different approach (than the House to address the CFPB),” said America’s Credit Union Chief Advocacy Officer Carrie Hunt. “As we know, the House version of the One Big Beautiful Bill did not completely defund the CFPB. It reduced the amount of funding that the CFPB could draw from the Fed to 5%. So, we could see the Senate either pick that number or a slightly different one. Ultimately, though, the goal is to have a shrunken CFPB.”
The CFPB receives its funding directly from the Federal Reserve, with the authority to draw up to 12% of the Fed’s annual profits. Republicans have long criticized the agency as overly powerful and have repeatedly sought to move its budget under congressional control, arguing that such a shift would enhance oversight and accountability.
“Right now, what do I think is the future of the CFPB coming out of the One Big Beautiful Bill…Let's just say the Congress passes something similar to what is in the House version of the bill…It's going to be challenging for that agency to implement its statutory directives with that level of funding,” Hunt said.
Hunt, reminding ACU supports a three-member CFPB board as opposed to a single director, said no matter what the Senate decides, change at the CFPB is coming.
“It will have a smaller footprint, certainly. Our biggest concern is what does that mean for credit unions,” she said.
Defense Credit Union Council Chief Advocacy Officer Jason Stverak said he believes Republicans want to limit the CFPB’s future impact as much as possible. He acknowledged that without the votes to disband the Bureau, Congress will have to find ways to limit or hinder the CFPB’s authority and capabilities.
“It might not be just through funding. It could come down to more of an Administration directive to have a more hands-off approach, and be much more laissez-faire and not proactive in its enforcement efforts,” Stverak said.
If that happens, both Stverak and Hunt believe more states will step in to address consumer protections.