Washington, DC – Today, the White House announced a budget proposal that targets the funding structure for the Consumer Financial Protection Bureau (CFPB). The proposal would jeopardize the Bureau’s independence by eliminating its current source of funding through revenue generated from the Federal Reserve banks. Instead, the President’s plan would threaten the independence of the agency.
The proposal would also slash the consumer protection agency’s funding for the upcoming year and recommends eliminating its funding altogether by 2020.
Christopher Peterson, a Senior Fellow at the Consumer Federation of America and the John J Flynn Endowed Professor of Law at the University of Utah, made the following statement:
“Those who care about protecting American families from deceptive and unfair debts should insist on preserving the current system of funding the CFPB through Federal Reserve bank revenue. The Federal Reserve generates much of its own funding by providing services to the nation’s banking industry. It makes sense for banks to help cover the costs of providing a consumer protection watchdog and for banks to be insulated from a political appropriations process.”
“The Administration’s budget plan would allow banking industry lobbyists to put a leash on America’s most important Consumer Watchdog.”
“President Trump came into office promising to remember the forgotten people that are struggling throughout middle America. Instead, the Administration is taking the side of big banks and payday lenders by trying to strip funding and authority from the agency that is working to make sure that those families are treated fairly.”
“The CFPB has been a highly efficient use of public funds. One study found that for every dollar spent on CFPB’s law enforcement staff, over $53 were returned to the public in law enforcement cases targeting deceptive practices by banks and other financial companies.”
“The Administration and Congress need to remember the lessons learned from the Great Recession. Reckless consumer lending has the potential to harm millions of Americans and derail the American economy. American families need an effective, well-funded regulator to keep an eye on both Wall Street banks and Main Street predatory lenders.”
Contact: Christopher L. Peterson, 202-387-6121 x1020.