Overview
Title
To amend the Consumer Financial Protection Act of 2010 to limit the funding of the Consumer Financial Protection Bureau to an amount equal to $1.
ELI5 AI
The bill wants to change the rules so that the Consumer Financial Protection Bureau, which helps keep our money safe, would only get $1 to do all its work, making it very hard for them to protect people from unfair money tricks.
Summary AI
H.R. 8908 aims to amend the Consumer Financial Protection Act of 2010 by significantly reducing the funding for the Consumer Financial Protection Bureau (CFPB) to just $1. This change would alter the current provision, which allows the Director of the CFPB to determine the necessary amount needed to fulfill its responsibilities under federal consumer financial law. Additionally, it removes certain existing paragraphs related to this funding process.
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AnalysisAI
General Summary of the Bill
The bill titled "Consumer Financial Protection Bureau Withdrawal Cap Adjustment Act of 2024" seeks to significantly amend the Consumer Financial Protection Act of 2010. Specifically, it proposes to limit the funding of the Consumer Financial Protection Bureau (CFPB) to a mere $1. The bill strikes out previous provisions that allowed the CFPB Director to determine the necessary funding for the Bureau's operations. By removing paragraphs that guide funding determination and allocation, the bill aims to restrict the CFPB's financial resources drastically.
Significant Issues
A major issue with this proposed legislation is the reduction of the CFPB's funding to only $1. Such a change could essentially dismantle the Bureau, disabling its capacity to function effectively and protect consumers from financial exploitations. The current law enables the Director to allocate funds based on what is reasonably necessary, taking into account challenges in the financial landscape. This flexibility is also targeted for removal, further hindering the Bureau's adaptability.
Moreover, the bill intends to strike additional sections of the existing law without clearly outlining the impacts this would have on the Bureau's operations and statutory responsibilities. The absence of detailed alternative funding mechanisms compounds the uncertainty about how the CFPB is expected to fulfill its mandates under these extreme financial constraints.
Impact on the General Public
If enacted, this bill could have sweeping ramifications for the public. The CFPB was established to protect consumers in the financial sector, overseeing issues like predatory lending, unfair credit practices, and banking abuses. Limiting its funding to $1 would effectively strip the agency of its ability to serve as a consumer watchdog. This could leave the public, particularly vulnerable populations, exposed to unethical financial practices without any federal recourse or protection.
Impact on Specific Stakeholders
The bill may yield divergent impacts on different stakeholders:
Consumers: Most negatively impacted would be consumers, especially those who are economically disadvantaged or lack financial literacy. Without the CFPB's oversight, they could fall prey to deceptive practices without an adequate means for protection or redress.
Financial Institutions: For certain financial institutions, particularly those that view regulatory oversight as cumbersome, the bill may be seen as beneficial. It could reduce the compliance costs associated with adhering to CFPB regulations, giving these institutions more leeway in their operations.
Regulatory Bodies and Lawmakers: Other regulatory bodies may face increased pressure and workload if tasked with filling the gap left by the CFPB. Lawmakers supportive of consumer protection might view the bill as a severe regression in financial industry oversight, potentially leading to increased legislative and public debate.
Overall, while some might argue that reducing funding could streamline operations or reduce perceived regulatory overreach, a broader consensus leans toward viewing the bill as a potential threat to consumer safety and market fairness.
Financial Assessment
The proposed bill, H.R. 8908, addresses a notable and contentious aspect regarding the funding of the Consumer Financial Protection Bureau (CFPB). Specifically, the bill seeks to amend the Consumer Financial Protection Act of 2010 by dramatically limiting the CFPB's funding to $1. This financial allocation would effectively replace the existing provision, which grants the Bureau's Director the discretion to determine the necessary funding level needed to support the Bureau's mission in consumer financial protection.
The core financial implication of this proposed amendment is the potential dismantling of the CFPB's operational capacity. By limiting the funding to an amount so nominal, the Bureau would be stripped of the resources critical to its role of safeguarding consumers against financial abuses and misconduct. This limitation is significant because it directly affects the Bureau's ability to function effectively and fulfill its legislated responsibilities.
Moreover, the bill proposes to strike paragraphs (2) and (3) of Section 1017(a) from the funding provisions, although it does not clarify how this removal might affect the CFPB's operations or responsibilities. This introduces ambiguity about how the Bureau will manage its obligations and continue to protect consumers in the absence of these provisions.
One of the issues linked to this drastic funding cut is the lack of any alternative funding mechanism within the bill. By not providing a replacement funding source or method, the bill leaves a substantial gap in the operational framework of the CFPB. This lack of sustainable financial structure elevates concerns about how the Bureau could manage evolving financial challenges and meet its mandate to protect consumer interests moving forward.
In summary, the bill's financial reference to set the funding of the CFPB to $1 poses significant challenges. The proposed financial allocation would likely diminish the Bureau's operational capabilities, leading to potential vulnerabilities for consumers against predatory financial practices. The absence of additional details on the ramifications of striking funding-related provisions adds to the uncertainty regarding the future efficacy and strength of consumer financial protections.
Issues
The most significant issue is that Section 2 proposes to limit the funding of the Consumer Financial Protection Bureau (CFPB) to only $1. This extreme measure could effectively dismantle the agency's ability to operate, thereby stripping consumers of critical protections against financial abuses and misconduct. The financial, legal, and ethical implications of this would be considerable, potentially leaving consumers vulnerable to predatory practices.
Section 2 removes the current provision allowing the CFPB Director to determine necessary funding based on reasonable necessity. This could hinder the agency's ability to adapt and respond to evolving financial challenges and protect consumer interests effectively.
The amended bill text in Section 2 eliminates paragraphs (2) and (3) of the funding provisions, but does not provide details on the comprehensive effects of striking these paragraphs. This lack of transparency might create ambiguity regarding the CFPB's operational capacity and the potential effects on its statutory duties.
Section 2 lacks any alternative mechanisms for funding the Consumer Financial Protection Bureau, which introduces uncertainty around how the Bureau could continue to function or fulfill its mandate without the necessary resources.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the act provides its official short title, allowing it to be referred to as the “Consumer Financial Protection Bureau Withdrawal Cap Adjustment Act of 2024”.
2. Limiting funding of consumer financial protection bureau to an amount equal to $1 Read Opens in new tab
Summary AI
The proposed amendment changes the funding for the Consumer Financial Protection Bureau to just $1, replacing previous funding language with this new amount and removing certain other paragraphs from the original text.
Money References
- SEC. 2. Limiting funding of consumer financial protection bureau to an amount equal to $1. Section 1017(a) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5497(a)) is amended— (1) in paragraph (1), by striking “the amount determined by the Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, taking into account such other sums made available to the Bureau from the preceding year (or quarter of such year)” and inserting “an amount equal to $1”; (2) by striking paragraphs (2) and (3); and (3) by redesignating paragraphs (4) and (5) as paragraphs (2) and (3), respectively.