House GOP Looks to Cut CFPB Funding, Warren Defends

Obama’s proposed budget, released earlier this week, added roughly $6.5 billion in spending for financial regulators, Bloomberg News reported. But a provision from House Republicans may mean a lot less money than expected for the newly forming Consumer Financial Protection Bureau (CFPB).

Boomberg crunched some of the numbers and found that implementing Dodd-Frank could mean 5,000 new jobs across eight agencies including 1,225 hires for the CFPB, headed by White House adviser Elizabeth Warren.

While the funding falls short of spending authorized for the SEC in Dodd-Frank by about 100 million, the budget was well received by the commission, as represented in a statement by Chairman Mary Schapiro in a statement following the budget release.

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Funding for the CFPB overall looks less certain, however, pending a U.S. House Republican movement to cut the spending of the bureau by 40%. “A provision in the so-called continuing resolution that would limit Federal Reserve transfers to $80 million,” reported Bloomberg BusinessWeek, is in stark contrast to the $134 million that Obama’s 2011 included for the CFPB.

In a speech given for the Consumers Union’s 75th anniversary celebration following the budget release, Warren encouraged supporters of the CFPB to remain defensive.

“Many of those who have opposed the CFPB are still trying to chip away at its independence by subjecting it entirely to Congressional appropriations without any dedicated funding from the Federal Reserve,” Warren said. “While the banking regulators charged with preserving the safety and soundness of financial institutions and ensuring consumer protection compliance by smaller banks would continue to receive independent funding, the agency in the financial regulatory system with lead responsibility for protecting consumers would face a different set of rules—rules that threaten its independence.”

Read Warren’s full remarks to the Consumers Union.

Written by Elizabeth Ecker

 

 

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  • Wow!! Here is an Assistant to the President and a Special Advisor to the Secretary of the Treasury speaking out in regard to the budget of the CFPB. In reading the article it is very clear that she is not overseeing the creation of the CFPB but rather is involved directly in its daily operations.

    Now consider where the Special Advisor gave this message. It was at the celebration of the 75th anniversary for Consumers Union.

    The cozy and warm connection which Ms. Warren herself portrays as existing between Consumers Union and herself is not reassuring. In this speech she uplifts the CEO by saying that starting with her first week on the job when it came to the CFPB (Consumer Financial Protection Bureau), she followed his advice.

    To read the “sage advice” Consumers Union gives on reverse mortgages is enlightening (http://www.consumersunion.org/pub/core_financial_services/017189.html). Most of us are already aware of the awful and irresponsible information they have provided on reverse mortgages.

    Here is a group which advocates the position that a family owned and run style “reverse mortgage” is a win-win for the family. The problem is they are also potentially the most divisive and explosive to family relationships and can be the most depressive to the financial independence of a senior. With little actual information, Consumers Union blows its value out of proportion. It seems this is what they believe is THE answer to financial need if no government or charitable program will work. It is clear that few of these “advisers” have ever dealt with this situation and are just plain biased against the HECM program.

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