Bill slashes CFPB’s budget nearly in half and leaves consumers vulnerable to fraud and abuse
WASHINGTON DC – The Senate narrowly approved the budget reconciliation bill today, which included a provision that cuts the funding for the Consumer Financial Protection Bureau nearly in half. The deep cut in funding will significantly undermine the CFPB’s ability to protect consumers and hold big banks and predatory lenders accountable when they break the law and treat consumers unfairly, according to Consumer Reports.
“Slashing the CFPB’s budget nearly in half will severely compromise its ability to stand up for consumers and take on big banks and unscrupulous financial firms when they cheat working families out of their hard-earned money,” said Chuck Bell, advocacy program director at Consumer Reports. “Consumers will be more likely to fall victim to shady financial industry practices, hidden fees, and other scams because of this devastating budget cut. Shrinking the CFPB’s funding so dramatically on top of the administration’s ongoing efforts to gut the Bureau will effectively muzzle this critical watchdog and leave consumers more vulnerable to fraud and abuse.”
Congress created the CFPB after other federal financial regulators failed to rein in risky mortgage lending, which triggered the 2008 financial crisis and resulted in millions of Americans losing their homes to foreclosure. Since its founding, the CFPB has helped millions of consumers resolve their complaints with financial firms and secured more than $21 billion in refunds and relief for an estimated 205 million consumers who were treated unfairly.
The Senate vote to cut the budget at the CFPB comes after the administration has issued stop work orders, sought to lay off all but a small number of its staff, and suspended most enforcement activities. The CFPB’s acting director has halted many vitally important rulemakings and civil cases targeting companies from engaging in harmful and predatory practices, and abandoned efforts to obtain refunds and restitution for those who have been directly harmed.
Media Contact: Michael McCauley, michael.mccauley@consumer.org