Senate Republicans are taking another swing at scaling back the Consumer Financial Protection Bureau’s funding, marking the latest round in a long-running battle over the agency’s independence.
Driving the news: In newly released legislative text, Republicans on the Senate Banking Committee are proposing to reduce the CFPB’s funding cap from 12% to 6.5% of the Federal Reserve’s 2009 operating expenses, adjusted for inflation. This revised attempt comes after the Senate parliamentarian blocked an earlier proposal to cut the funding cap to zero, ruling it violated the Byrd Rule, which governs what can be included in reconciliation bills.
Why it matters: The CFPB’s current funding structure allows it to operate outside the traditional congressional appropriations process by drawing funds directly from the Federal Reserve. Republican lawmakers argue that this setup gives the agency too much autonomy and too little accountability. Democrats argue that the agency’s independence is precisely what allows it to protect consumers from financial misconduct without political interference.
By the numbers:
- The original zero-percent cap proposal was estimated to save $6.4 billion over 10 years.
- The updated 6.5% cap is projected to save approximately $2 billion over the same period.
- The Senate Banking Committee’s full slate of provisions in the “One Big Beautiful Bill” claims $1.595 billion in net savings over 10 years, with additional cuts targeting the SEC’s technology fund and green housing initiatives.
What they’re saying: Sen. Tim Scott [R-S.C.], Chair of the Banking Committee, said the changes “decrease the CFPB’s funding cap without affecting the statutory functions of the Bureau” and framed the move as part of an effort to cut government waste and duplication.
Sen. Elizabeth Warren [D-Mass.], the CFPB’s chief architect and top Democrat on the Senate Banking Committee, blasted the revised plan, saying it still “slashes the agency’s available budget so [Republicans] can hand out more tax breaks for billionaires.” She pledged Democrats would introduce an amendment to remove the provision.
