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Elimination of CFPB and Other Financial Agencies Tossed Out of Budget Bill
The Senate parliamentarian has been hearing arguments over whether certain provisions can stay in the One Big Beautiful Bill Act, and the first set of decisions preserves several federal banking agencies.
The ruling means that these provisions would only be able to return to the bill in one of two ways: either with a 60-vote waiver of the Byrd Rule, or with the chair of the Senate ignoring the parliamentarian and allowing the measures to stay. Senate Majority Leader John Thune (R-SD) has ruled out the latter, but now we’ll get a test of whether he is committed to abiding by this.
This decision has once again preserved the Consumer Financial Protection Bureau, which has survived several near-death experiences this year.
The Senate Banking Committee attempted to essentially zero out the CFPB by reducing the cap for funds that the Federal Reserve can transfer to the agency to zero percent. That’s a full defunding, and it doesn’t directly impact the overall budget, since it’s a reduction in funds coming from off-budget, via the Federal Reserve. The parliamentarian ruled that this did not have a primary budgetary purpose but was a policy move by Republicans to get rid of a disfavored agency. This isn’t allowed in budget reconciliation.
The same ruling was made for the zeroing out of the budget of the Office of Financial Research, which is funded through an assessment on large banks. Under the bill, that assessment money would get swept into the general fund; the parliamentarian saw that as a policy maneuver to kill OFR, a critical agency for market operations as well as for seeing over the horizon on the stability of the financial system.
The ruling means that these provisions would only be able to return to the bill in one of two ways: either with a 60-vote waiver of the Byrd Rule, or with the chair of the Senate ignoring the parliamentarian and allowing the measures to stay. Senate Majority Leader John Thune (R-SD) has ruled out the latter, but now we’ll get a test of whether he is committed to abiding by this.
This decision has once again preserved the Consumer Financial Protection Bureau, which has survived several near-death experiences this year.
The Senate Banking Committee attempted to essentially zero out the CFPB by reducing the cap for funds that the Federal Reserve can transfer to the agency to zero percent. That’s a full defunding, and it doesn’t directly impact the overall budget, since it’s a reduction in funds coming from off-budget, via the Federal Reserve. The parliamentarian ruled that this did not have a primary budgetary purpose but was a policy move by Republicans to get rid of a disfavored agency. This isn’t allowed in budget reconciliation.
The same ruling was made for the zeroing out of the budget of the Office of Financial Research, which is funded through an assessment on large banks. Under the bill, that assessment money would get swept into the general fund; the parliamentarian saw that as a policy maneuver to kill OFR, a critical agency for market operations as well as for seeing over the horizon on the stability of the financial system.
https://prospect.org/politics/2025-06-20-elimination-cfpb-financial-agencies-tossed-senate-byrd-rule/
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