The Senate Republican budget would “dismantle” the Consumer Financial Protection Bureau, a group of Democrats warned Wednesday.
Sen. Elizabeth Warren, D-Mass., who proposed the bureau as a law professor at Harvard University, said Republicans “want to make sure that the watchdogs are tame.”
The GOP budget includes a provision allowing the Senate to consider subjecting the bureau’s funding to congressional approval, and an amendment offered by Sen. David Perdue, R-Ga., would do just that.
Currently, the bureau is funded with revenue from the Federal Reserve, which earns income on its book of bonds. It was set up with independent funding to keep Congress from exercising the power of the purse over its operations.
Sen. Jeff Merkley, D-Ore., said that funding the bureau through appropriations would be “an air hose that the Republicans can step on to diminish and degrade” the agency.
The bureau regulates consumer finance, from mortgages to credit cards. Democrats on Wednesday touted the fact that it has returned $5 billion from companies to consumers for abuse since its creation in 2011.
“The CFPB is a target precisely because it has been doing a good job,” Al Franken, a Minnesota Democrat, told reporters in the Capitol.
Warren on Wednesday said Republicans were doing the bidding of large banks at the expense of the middle class, aiming to “make it easier for Wall Street to rip them off.”
Perdue said in statement provided to the Washington Examiner that the move was “part of a broader goal to make government more accountable. Washington should not dictate the specific financial decisions consumers and families must make, especially what credit cards are in your wallet, how to mortgage your home, or where to do your banking.”
“We must make government as a whole work in a more transparent and accountable manner, and the CFPB should not be exempted from Congressional oversight,” Perdue added.
Warren, regarded as the Senate’s most strident critic of Wall Street practices, has sought to prevent any legislation that would change significant provisions of the sweeping 2010 Dodd-Frank financial reform law.
The budget agreement the Senate is working on this week would not become law. Rather, it is an agreement between chambers on spending levels and a statement of goals. The House GOP budget also provides a path to placing funds for the bureau under Congress.
Merkley said Democrats were concerned that Republicans would attach legislation curbing the bureau’s influence or rolling back another part of the 2010 Dodd-Frank financial reform law to must-pass legislation.
“That’s something we’re greatly concerned about,” said Merkley, a member of the Senate Banking Committee.
If the GOP does try to alter Dodd-Frank, he said, “we’re going to do everything we can to rally the American people.”
For their part, Republicans have said the bureau, which has broad powers to oversee and regulate financial products and practices, is unaccountable and lacks transparency.
House Republicans have waged a nonstop negative publicity effort against the bureau, holding numerous hearings on accusations of overspending and discrimination at the agency, as well as its regulation of banks and other financial firms.
Since gaining the majority this year, Senate Republicans, led by Banking Committee Chairman Richard Shelby of Alabama, also have sought reforms at the agency, although no specific legislation has been advanced.
