CFPB Structure, CDFI Funding, and Marijuana Banking Addressed in New Appropriations Bill

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If you thought the Supreme Court laying down the law and declaring the Consumer Financial Protection Bureau’s (CFPB) funding method constitutional would be the end to a very, very, very long fight against the CFPB, guess again. Despite the Supreme Court’s ruling (which, in turn, labeled many controversial CFPB rules, such as the recent credit card late fee cap, as constitutional), House Republicans are continuing the fight through alternative methods.

Last week, the House Financial Services Appropriations Committee passed the FY25 Financial Services and General Government Appropriations Bill, which outlined a new organizational structure and funding mechanism for the CFPB that also holds the CFPB to the same appropriations clause as other government organizations and prevents it (very specifically) from using funds to cap credit card late fees.

Furthermore, it also reduced the CFPB’s budget to $650 million which is “$35 million below the authorized level and $54 million below the Federal Reserve transfer received through the third quarter of FY24.” The changes laid out for the organization are listed below:

  • Replaces the unaccountable CFPB Director with a bipartisan, five-person commission.
  • Prohibits funds to be used by CFPB to require small banks to collect and report sensitive and
    private information on their customers.
  • Prohibits funds from CFPB’s rulemaking capping credit card late fees.
  • Prohibits funds for CFPB’s non-bank registry that would impose severe and complex
    measures on covered entities, including many small businesses.

In response to the bill’s approval, Republican Committee Chairman Tom Cole said, “The FY25 FSGG bill protects taxpayers and constrains the burdensome hands of unelected bureaucrats. The integrity of our financial and judicial systems is supported without adding the red tape and reckless spending the White House requested. Above all, we made sure to focus agencies on their core missions. It’s a product that responsibly ensures government works for the people, and I am grateful for the leadership of Chairman Joyce.”

The “constrains the burdensome hands of unelected bureaucrats” is a not-so-subtle reference to the CFPB’s structure, as its lack of elected officials has long been a source of frustration for the organization’s opponents.

In addition to constraining the CFPB, the bill laid out funding for several other initiatives, many of which are of interest to credit unions, including $276 million for the Community Development Financial Institutions (CDFI) Fund, $3.42 million for the NCUA’s Community Development Revolving Loan Fund (CDRLF), and $170 million for the Financial Crimes Enforcement Network. It also adds a rule which would prohibit sanctioning any financial institution for providing services to a marijuana-related business—a long-awaited policy many agree is necessary, but is often tacked onto other legislation which fails to pass both the House and Senate.

Jim Nussle, President and CEO of Americas Credit Unions, has already written to the committee in response to the bill, praising its focus on credit union priorities and Americas Credit Unions-supported policies, while calling for $500 million of the CDFI funding and $6 million of the CDRLF for credit unions.

However, Democrats in the Senate are almost surely going to kill the bill when it arrives on their desks. In fact, Democrat Rep. Steny Hoyer of Maryland has already proclaimed that, “This bill is going nowhere.”

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