The huge FY26 budget reconciliation bill, H.R. 1, dubbed the “One Big Beautiful Bill Act,” contains provisions that would slash CFPB spending.

“We put a firm cap on the Consumer Financial Protection Bureau’s budget, setting its funding at no more than $249 million for 2025, with an annual adjustment for inflation going forward,” House Financial Services Committee Chairman Rep. French Hill, R-Ark., told the House Rules Committee before the committee approved a rule for floor debate of the measure.

By comparison, as of September. 30, 2024, the CFPB had incurred about $755.1 million in FY 24 obligations, according to a bureau report. Of that total, about $480 million was spent on employee compensation and benefits for the 1,755 bureau employees who were on board at the end of the quarter.

The CFPB currently is funded by the Federal Reserve Board from the combined earnings of the Federal Reserve System. The agency currently may draw 12% of the Fed’s 2009 operating budget.

The Trump Administration has proposed eliminating more than 1,400 employees at the agency, leaving about 200 workers. That plan has temporarily been blocked by the Court of Appeals for the District of Columbia Circuit.

The House passed the reconciliation bill mostly along party lines, 215-214, with one Republican member voting “present”.

The reconciliation legislation bundled budget-cutting proposals approved by House authorizing committees with tax proposals from the House Ways and Means Committee.

Among other Financial Services provisions, the bill would require the CFPB to transfer to the Treasury Department’s general fund any amounts remaining in its Civil Penalty Fund, from a civil penalty it imposed, after all direct victims have been compensated.

As Republicans were piecing together the massive reconciliation bill, the Financial Services Committee was charged with finding $1 billion in savings from programs under its jurisdiction. Hill told the Rules Committee that the provisions approved by his committee—in a party line vote—would save $5.2 billion.

In her Rules Committee testimony, Financial Services Committee ranking Democrat Rep. Maxine Waters, D-Calif., blasted the Republican plan to cut CFPB funding.

“This budget scheme will slash the Bureau’s budget by 70% and put the agency’s crucial work – like cracking down on illegal junk fees, tackling discrimination in housing, and protecting servicemembers and students from scams – to a grinding halt,” she said.

The Senate has not yet considered the reconciliation bill, so it is not possible to predict what changes Chairman Sen. Tim Scott, R-S.C. of the Senate Banking, Housing and Urban Affairs Committee , and other Senators, may push. During the last Congress, Scott cosponsored legislation that would have subjected the CFPB to the annual appropriations process. Significantly, reconciliation bills are not subject to filibusters in the Senate and, thus, may be passed with a simple majority vote. As a result, no votes from Democrats would be needed to pass the bill in the Senate.

American Bankers Association President and CEO Rob Nichols has said the ABA supports the Financial Services provisions, but favors larger changes at the CFPB.

“We have long argued that the CFPB should be funded through the traditional appropriations process and led by a bipartisan commission rather than a single director, consistent with other federal agencies,” Nichols said.