House financial services funding bill puts new restraints on regulators
A spending bill released Wednesday by the House Appropriations Committee includes major restraints for financial regulatory agencies.
The panel’s fiscal 2018 financial services spending bill would give Congress control of major federal financial regulators’ budgets and bar them from implementing certain rules passed in the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The restrictions were also included in a financial services bill approved by the House earlier this year, but that legislation faces an uncertain future in the Senate.
{mosads}Including the provisions in the spending bill, which is must-pass legislation, increases the odds they could become law.
The measure places the Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau (CFPB), National Credit Union Association, Federal Housing Finance Agency, the Office of the Comptroller of the Currency and regulatory functions of the Federal Reserve under the congressional appropriations process.
Congress already controls the budgets of the Securities and Exchange Commission (SEC) and IRS. If enacted, the spending bill would give Congress near total control of the federal government’s financial regulatory system.
GOP lawmakers have long called for greater congressional oversight of federal financial regulators. The sweeping bill rolling back Dodd-Frank approved by the House last month included several of the provisions in the financial services funding bill. Those include removing the CFPB’s power to crack down on “unfair, abusive and deceptive practices” and its ability to supervise the financial sector, both of which Republicans say the agency has consistently abused.
Dodd-Frank established the CFPB to police predatory lending, and Democrats have been steadfast supporters of the agency. However, Republicans counter that the CFPB is an overbearing, unaccountable and redundant strain on the country’s economy. While the broader Dodd-Frank rollback bill passed by the House reorganizes the CFPB, the funding bill includes no changes to the agency’s structure.
The funding bill also bars regulators from implementing certain rules passed in Dodd-Frank, such as the “Volcker Rule” banning banks from making risky investments with their own capital. It also prevents the SEC from developing a rule requiring corporations to disclose donations to political candidates and action committees, which Republicans have long opposed.
The $20.2 billion measure is $1.28 billion less than fiscal year 2017 funding level and $2.48 billion less than President Trump’s fiscal 2018 budget request. It includes a $149 billion cut to IRS funding, despite Treasury Secretary Steven Mnuchin’s request for more funding.
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