WASHINGTON The House Appropriations Committee approved legislation Wednesday to subject the Consumer Financial Protection Bureau to the federal appropriations process and block the agency from issuing a rule on mandatory arbitration clauses.
The financial services funding bill, which sets budgets for agencies including the Internal Revenue Service and the Securities and Exchange Commission, passed the panel by a partisan vote of 30-20.
"This bill covers a wide swath of programs that enable our federal government to do its job. From preserving an open and fair judicial system, to investing in small businesses that help our economy grow, this bill does a great deal of good work, and I am proud to support it today," Rep. Hal Rogers, R-Ky., chairman of the panel, said in a press release.
Critically, the bill would alter the CFPB's funding process, stopping the direct transfer the agency receives from the Federal Reserve and putting the agency's funding under control of Congress. GOP lawmakers in both chambers have long pushed for direct oversight of the CFPB's budget a move the White House has vowed to veto. Democrats would almost certainly try to block the measure again.
The legislation also includes several amendments, including the provision blocking CFPB from finalizing any rule on the use of arbitration clauses until it further studies the issue, which was adopted by voice vote. The consumer agency finalized a major report on the issue earlier this spring, but has yet to draft a proposal.
Another amendment would stop the Financial Stability Oversight Council from designating systemically important nonbanks without giving the institutions the opportunity to change their business practices first. That measure was approved 31-19.
The bill sets aside $1.5 billion for the SEC, equal to last year's enacted funding level and $222 million below President Obama's budget request.
Still, critics charged that the legislation goes too far in directing the agency on how to use the funds.
"The 'level funding' provided is so prescriptive, it actually takes funds from the SEC's enforcement and examinations offices in favor of modest investments in IT and economic analysis," said Rep. Maxine Waters, D-Calif., in a press release.
Waters is not on the appropriations panel, but is the top Democrat on the Financial Services Committee.
She added: "This bill is a handout to Wall Street that will ultimately be paid by Main Street. It is bad for consumers, students, seniors and those saving for retirement. I will strongly oppose this measure on the House floor, and I hope many of my fellow Democrats will do the same."
