WASHINGTON–After the Senate Parliamentarian ruled efforts in Congress to reduce funding for the CFPB and other federal agencies that provide oversight must be removed from the so-called “big, beautiful bill,” two new questions have been raised: What’s next for the Bureau’s fate, and what of the statutes it enacted that remain in place?
As the CU Daily reported here, Senate Parliamentarian Elizabeth MacDonough ruled many of the provisions in the reconciliation bill are in violation of the Byrd Rule, which was established in the Senate as part of the Congressional Budget Act as a mechanism to prevent non-budgetary provisions from being included in reconciliation bills and is meant to ensure reconciliation remains focused on fiscal issues
The Senate bill included a provision that would have placed a funding cap on the CFPB) and which would have cut $6.4 billion by reducing its maximum funding to zero percent of the Federal Reserve’s operating expenses.
In short, it would have eliminated the CFPB, which is currently operating on a bare bones basis.
Now What?
So, now what?
“The Republican leadership and the Senate Banking Committee, obviously, want to limit and, quote/unquote, ‘starve’ the agency as much as possible to limit its impact,” said Jason Stverak, chief advocacy officer with the Defense Credit Union Council. “I don’t believe they have the 60 votes needed to pass legislation to get rid of the CFPB. So, they will go back to the drawing board and find another way to try to limit or hinder the CFPB and its ability to operate. It might not be through funding; it might be through increased oversight. It might be just come down to the administration having more of a hands-off approach and being much more laissez faire and not proactive.”
Carrie Hunt, chief advocacy officer with America’s Credit Union believes the Senate will take a new approach with separate legislation that reduces the amount of funding the Bureau can draw from the Federal Reserve.
“Ultimately, the goal (of Congress) is to have a shrunken CFPB, but the statutes are in place, so until Congress changes that we need a functional regulator,” Hunt stated. “Otherwise, we will see states jump in, and on consumer laws there’s a long history of state AGs having consumer protections and jumping into areas that the federal government does not.”
Hunt said she believes the pressure will remain on Congress to continue to bring reforms to the CFPB as the Bureau is challenged to implement its statutory directives.
Hunt added America’s Credit Unions continues to support a three-member board for the CFPB (it currently has a single director) and the trade group will continue to push for CUs to be exempt from many of the CFPB’s rules.
“At a minimum (the CFPB will) have a smaller footprint certainly, though our biggest concern is what does that mean for credit unions if we have the CFPB less active on those previously or less-regulated entities and more continued focus on depositories,” Hunt said. “We don’t want that to have a negative impact on our members, so how that plays out is certainly top of mind.”
Compliance Deadlines Pushed Back
Separately, the CFPB has delayed all three compliance deadlines for its Section 1071 rule, which requires lenders to collect and report detailed data on their small-business loans. The delay came in an interim final rule released this week.
America’s Credit Unions said the compliance dates are adjusted as follows:
- For high volume lenders, the compliance date is July 1, 2026, with the first filing date June 1, 2027;
- For moderate volume lenders, the compliance date is January 1, 2027, with the first filing date June 1, 2028; and
- For small volume lenders, the new compliance date is October 1, 2027, with the first filing date June 1, 2028.
The CFPB said it issued the delay as it waits for court challenges, including one in which America’s Credit Unions is an intervenor, to run their course.
