WASHINGTON—Senate Banking Committee Republicans are now proposing to slash the CFPB’s funding by nearly 50% as part of their revised contribution to the GOP’s sweeping budget reconciliation bill, according to updated draft language obtained by Politico.
The scaled-back plan follows an earlier proposal from Banking Chair Tim Scott (R-SC) that would have eliminated the CFPB’s funding entirely—a move later ruled ineligible under Senate reconciliation rules, which CUToday.info reported here.
The revised text still requires approval from Senate Parliamentarian Elizabeth MacDonough, who determines whether provisions meet the strict criteria for inclusion in a filibuster-proof reconciliation bill. As of now, she has not issued a ruling on the new language, meaning further changes could still be made, according to a source familiar with the closed-door negotiations, Politico said.
Scott’s revised proposal would limit the Bureau’s funding to 6.5% of the Federal Reserve’s operating budget—down from the current 12% cap. The move reflects a longstanding Republican effort to place the CFPB, which currently receives its funding directly from the Fed, under the congressional appropriations process, Politico said.
Defense Credit Union Council Chief Advocacy Officer Jason Stverak welcomed the Republicans’ revised proposal.
“This is a positive step toward aligning the Bureau’s funding with appropriate oversight and accountability,” Stverak said. “As outlined in our June 25, 2025, letter to the House Financial Services Committee, DCUC has long advocated for reforms to CFPB governance – including placing the Bureau under the normal congressional appropriations process – to ensure robust oversight and accountability. We fully support efforts to rein in overly broad, punitive regulatory approaches that have unfairly burdened community-based institutions like defense credit unions. More targeted and accountable CFPB policies are essential to preserving access to affordable financial services for military families.”
America's Credit Unions commented on the Republicans' latest proposal.
"Credit unions are the original consumer financial protectors. It's why we've supported a right-sized CFPB and have long supported funding the CFPB through the appropriations process." - America's Credit Unions Chief Advocacy Officer Carrie Hunt