House bill would cap CFPB budget

A bill passed Wednesday by the House would set new limits on, and effectively cut, the amount of money the Consumer Financial Protection Bureau can spend.

The legislation, passed with nearly exclusive Republican support, was originally aimed at placing new limits on agencies writing regulations, requiring them to conduct more analysis on their impact and subjecting them to additional legal review.

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But a late amendment from the bill's primary sponsor, Rep. Virginia FoxxVirginia FoxxOvernight Finance: Republicans move to block overtime rule | House, Senate split on IRS cuts | Yellen heading back before Congress Overnight Regulation: House Republicans move to block overtime rule House GOP moves to block overtime rule MORE (R-N.C.), would also place new limits on the funding for the CFPB.

Foxx's amendment, added to the bill at the House Rules Committee before it reached the House floor, would cap CFPB funding at $550 million — $36 million less than the Congressional Budget Office estimated the CFPB would spend in fiscal 2016.

Republicans have long sought to bring the agency's funding under congressional control, arguing its current funding structure makes it unaccountable to Congress. Agency backers argued that Republicans would simply look to stifle the agency with budget cuts with that control, and noted that other banking regulators also have funding arrangements that fall outside congressional purview.

Currently, the CFPB receives its funding from the Federal Reserve, but Foxx's amendment argued a cap was necessary because requiring the agency to meet new requirements under the bill could increase its costs, and in turn increase the cost of the legislation. The agency's budget is currently set at a percentage of Fed operating expenses, and its 2016 budget was estimated to be a maximum of $631.7 million by the CFPB.

The legislation was already hotly contested by financial reform advocates, who argued the new requirements on regulators would make it harder to write rules implementing still outstanding parts of the Dodd-Frank financial reform law, and make it easier for industry groups to challenge those rules in court.

The House approved the bill, with the amendment attached, by a vote of 250-173. Just nine Democrats voted in favor of the measure, and no Republicans voted against it.

This post was updated at 6:21pm. It originally said the amendment would set first-ever limits on the CFPB, but the agency's budget is already capped at a percentage of Fed operating expenses.