Why the CFPB’s funding is guaranteed
The Consumer Financial Protection Bureau’s funding comes not from Congress but from the Federal Reserve, which has a fixed formula for doling out the funds. Victoria McGrane explains:
Under the Dodd-Frank law, the CFPB gets its money from transfers from the Federal Reserve System, up to specific caps set by the law. The Fed can’t turn down requests under that cap.
The caps are fixed percentages of the Fed’s operating expenses, which works out to the following:
–10% of Fed operating expenses in fiscal 2011 or $498 million — 11% of Fed operating expenses in fiscal 2012 or $547.8 million — 12% in fiscal 2013 or $597.6 million
–12% each fiscal year thereafter, subject to annual adjustments for inflation
If the CFPB thinks it needs more money it can ask for an extra $200 million through fiscal 2014, but the CFPB says it won’t.
Republicans, needless to say, aren’t happy with this arrangement, and they’re pushing a bill to have Congress hold the purse strings.