House passes bill to rein in consumer bureau

Congressional Democrats and the Obama administration decried cuts to the bureau’s funding including in the measure.

The bill’s sponsor, Rep. Robert Pittenger of North Carolina, said the measure would bring “balance” to the bureau’s rulemaking process by creating a small business committee to advise the agency. Republicans have argued that the bureau is too powerful and unaccountable since it was created by the 2010 Dodd-Frank financial reform law.

“Too often, CFPB regulations designed for massive, ‘systemic risk’ financial institutions end up hurting small businesses, credit unions and community banks,” Pittenger said.

The measure also would reduce the funds available to the bureau, which gets its funding from the Federal Reserve rather than from Congress. The legislation would limit its ability to draw money from the central bank by 0.1 percent over the next 10 years, according to Republicans.

The White House issued a veto threat for the legislation Tuesday, saying that the funding limitation was “solely intended to impede the CFPB’s ability to carry out its mission of protecting consumers in the financial markets.”

Speaking on the House floor Tuesday, House Financial Services Committee ranking Democrat Maxine Waters of California said that “this vote is one to weaken an agency with the explicit mission of standing up for consumers and taxpayers who have been subject to the deceptive practices of unscrupulous corporations.” The bill had originally cleared the Financial Services Committee with little opposition from Democrats before being amended in the broader chamber.

Waters predicted that the legislation would never become law. Nevertheless, Republicans in both the House and Senate have sought legislation to portray the bureau as lacking accountability and imposing burdens on businesses, especially ones outside Wall Street.