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Spending Bill Should Omit Changes to CFPB, Waters Says

by Victoria Finkle, American Banker

WASHINGTON — Rep. Maxine Waters, D-Calif., is warning that a key House appropriations bill soon to be considered by the full chamber could hurt the ability of the Consumer Financial Protection Bureau and other regulators to oversee the financial services industry.

Legislation to fund the Treasury Department, the Securities and Exchange Commission, the Small Business Administration and several other agencies is expected to proceed to the House floor in coming days after being considered by the Rules Committee on Wednesday afternoon.

But Waters, the top Democrat on the Financial Services Committee, is pushing back again several provisions, calling it "inappropriate" to include them in a spending bill. She says Democrats on her committee have not been given an adequate chance to weigh in on them.

Waters is asking Rep. Pete Sessions, R-Texas, chairman of the rules panel, to abide by certain House rules that would allow lawmakers the opportunity to object to specific measures in the bill during the floor debate.

"The funding process for our financial regulatory agencies should not be used as a way to sidestep the proper role of authorizing committees in Congress," she wrote to Sessions in a letter Wednesday.

Chief among her concerns is a section of the bill that would subject the CFPB to the congressional appropriations process. Dodd-Frank allowed the bureau to be funded independently as an arm of the Federal Reserve Board, but Republicans have repeatedly called for giving Congress greater control over the consumer agency's finances.

"It has been well-established that Congress intended for the Consumer Financial Protection Bureau's funding to be free of political influence, similar to other independent banking regulatory agencies," Waters said. "Sources of funding for the Consumer Financial Protection Bureau have been appropriately debated during the current Congress in the authorizing committee of jurisdiction."

The legislation would also subject the Office of Financial Research — another Dodd-Frank creation that is tasked with providing systemic risk data for the Financial Stability Oversight Council — to the appropriations process.

The bill would also loosen restrictions on what kinds of swaps banks can hold on their books and restrict the SEC's spending.

The Appropriations Committee approved the spending bill late last month. The legislation would provide $21.3 billion in funding for the relevant agencies, which is $566 million below the amount awarded by Congress for fiscal year 2014 and $2.3 billion below President Obama's April budget request for fiscal year 2015.

"This bill reflects common-sense decisions to place priority on programs and services that are effective, efficient, and essential to the financial health of our nation and the federal government's service to our people," said Rep. Hal Rogers, R-Ky., chairman of the Appropriations Committee, in a press release last month.

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