Senate Republicans on Thursday moved to revive a plan to dramatically reduce the Consumer Financial Protection Bureau’s budget after the chamber’s parliamentarian determined that an earlier proposal ran afoul of reconciliation rules.
The previous proposal, crafted by Republicans on the Senate Banking Committee, would have zeroed out the CFPB’s budget, but the Senate parliamentarian deemed it in violation of the Byrd Rule.
The new attack on the CFPB, unveiled by Senate Banking Committee Chair Tim Scott (R-S.C.) — a major recipient of financial industry donations — would cut the agency’s budget nearly in half. The proposal still must face scrutiny from the parliamentarian.
Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee and an architect of the consumer bureau, said in a statement that Democrats would introduce an amendment to strip the proposal from the reconciliation package, noting that the CFPB has “returned $21 billion to scammed American families” since its inception in the wake of the Great Recession.
“Donald Trump and Republicans tried to shut down the CFPB by gutting its entire operating budget to 0%,” said Warren. “We fought back and won. Now, Senate Republicans will bring to the floor a proposal that slashes the agency’s available budget so they can hand out more tax breaks for billionaires and billionaire corporations.”
The CFPB has been a major target of the Trump administration, which has installed an opponent of the agency — Russell Vought — as its acting director, moved to gut the bureau’s staff, and effectively halted its enforcement efforts. Since the start of Trump’s second term, the CFPB has dropped at least 18 enforcement actions against predatory financial firms.
“Trump is making his corporate backers even richer by letting them swindle you,” former U.S. Labor Secretary Robert Reich wrote Thursday.
Research released earlier this week estimates that the Trump administration’s assault on the CFPB has already cost Americans $18 billion worth of fees and lost compensation for harms inflicted by law-breaking corporations.
“The increased consumer costs from the CFPB’s rollback of regulations on bank fees, wholesale dismissal of cases against banks and other lenders, and the apparent failure to disburse funds intended for harmed borrowers run counter to Trump’s campaign pledges to ease the cost of living,” Reuters reported Tuesday, citing an analysis by the Student Borrower Protection Center and the Consumer Federation of America.
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