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Monday, December 12, 2011

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Jeff Sovern

At present, the Bureau, like most bank regulators, does not get its funding through annual congressional appropriations. Instead, the Bureau gets its money from the Federal Reserve budget, though it can't spend more than a certain percentage of the Fed's budget. As I explained last week on the blog at http://pubcit.typepad.com/clpblog/2011/12/why-the-cfpc-needs-the-same-budgetary-authority-as-other-bank-regulators.html, the Republican proposal to subject the Bureau to the annual appropriations process would enable financial institutions to lobby members of congress to reduce the Bureau's budget to keep the Bureau from doing things the industry doesn't like. The same formula crippled Fannie Mae's regulator, which led to Fannie and Freddie needing a buyout.

Bongo Jim

What does it mean to say that the CFPB is not subject to the congressional budgetary process?

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