President Trump has proposed dramatically cutting back the funding for the Consumer Financial Protection Bureau. In his first budget proposal as president, which was released yesterday morning, the president is proposing reducing the CFPB’s budget by $145 million in 2018, and cutting nearly $7 billion from the agency during the next 10 years. The proposal is on the next-to-last page of the budget.
As justification for the cuts, the president wrote:
Restructuring the CFPB to refocus its efforts on enforcing enacted consumer protection laws is a necessary first step to scale back harmful regulatory impositions and prevent future regulatory hurdles that stunt economic growth and ultimately hurt the consumers that CFPB was originally created to protect. Furthermore, subjecting the reformed Agency to the appropriations process would provide the oversight necessary to impose financial discipline and prevent future overreach of the Agency into consumer advocacy and activism.
The CFPB’s budget for 2017 is in the neighborhood of $636 million. The total cuts during the next decade proposed in the budget would basically eliminate all of the CFPB’s funding, reducing it to next-to-nothing.
There are many forces swirling around the CFPB, any of which could dramatically alter its mission and future. Today, the D.C. Court of Appeals will hear arguments whether the leadership structure of the agency is constitutional, or whether it should be changed so the president can fire the director for any reason, instead of just for cause.
And legislation in the House of Representatives — The Financial Choice Act — would completely overhaul the agency from top to bottom.
As can be expected, Democrats are not happy with the proposal.
“Donald Trump has once again revealed who he really is, with a cruel and senseless budget that abandons Main Street and the vulnerable,” said Rep. Maxine Waters [D-Calif.], the ranking member of the House Financial Services Committee, in a statement.
“The Trump budget mirrors efforts by Congressional Republicans to roll back Wall Street reform and take us back to the bad old days of weak oversight, lax enforcement and taxpayer bailouts,” Waters added. “The budget proposes to functionally terminate the Consumer Financial Protection Bureau, the only federal agency with the sole purpose of protecting consumers, and once again expose communities across the country to predatory financial institutions.”
