President Barack Obama on Tuesday issued a veto threat against a bill that would reduce funding available to an embattled consumer watchdog agency.
The bill would require the director of the Consumer Financial Protection Bureau to create a Small Business Advisory Board, Credit Union Advisory Council and a Community Bank Advisory Council to “advise and consult” with bureau. The White House took issue specifically with an amendment to the bill that would lower the total amount of funding that the bureau could request for fiscal years 2020 and 2025.
The bill as amended lowers the bureau’s budget cap by $9 million over 10 years. The cap is set at 618.7 million for fiscal year 2015.
Given that the law already caps the bureau’s funding and allows increases it only in line with the government’s employment cost index, the lower cap proposed in the amendment “is solely intended to impede the (bureau’s) ability to carry out its mission of protecting consumers in the financial markets,” said the White House Office of Management and Budget in a statement released Tuesday.
“These reductions to the caps could result in, among other things, undermining critical protections for families from abusive and predatory financial products,” the statement said.
If the bill came to the president’s desk as amended, his senior advisers would recommend he veto it, the statement said.
A spokesman for the GOP-controlled House Committee on Financial Services said in an email that the bill doesn’t cut funding; it just lowers the maximum amount the bureau could request from the Federal Reserve during two of the next 10 years by 0.1 percent.
“If this budget cap were applied to the typical American family with a household income of $50,000 a year rather than Washington bureaucrats, it would be the equivalent of tightening their budget by $7 per year,” wrote the spokesman, Jeff Emerson. “Most every American has done much more than that in the Obama economy. Surely the (consumer bureau) can, too.”
The Consumer Financial Protection Bureau was created by the Dodd Frank Wall Street Reform Act of 2010. The agency has oversight over mortgages, credit reporting, debt collection and payday loans, among other financial products and services.
Republicans complain that the bureau generates too much red tape and unnecessary regulations that hurt businesses and discourage job creation. They’ve proposed restructuring it or even doing away with it altogether.
Obama has previously warned that he would veto any bill that threatened the Dodd-Frank Wall Street overhaul.
Co-sponsors of the bill that came under veto threat Tuesday include Republican Reps. Ann Wagner and Blaine Luetkemeyer of Missouri, Patrick McHenry of North Carolina and Randy Neugebauer of Texas.
Democratic co-sponsors Derek Kilmer and Denny Heck of Washington withdrew their support of the bill following the addition of the controversial amendment.
“The reason folks hold Congress in such low regard is because of partisan tricks like this,” Kilmer said in a statement. “The Consumer Financial Protection Bureau was created to help middle-class families and support an economy that creates opportunities for everyone. I won’t stand for these changes that turn a bipartisan bill into something that does harm to an agency trying to do some good.”
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