Less is more
June 2, 2010 | federal legislation, industry | Comments (0)Discussion of the Consumer Finanical Protection “Bureau” versus “Agency” in an American Banker story that I won’t link to because it’s a subscription service:
The House bill would fund the new agency from multiple sources. It would allocate 10% of the Federal Reserve System’s operating costs to the new agency, allow it to charge assessments on large institutions, and appropriate $200 million annually from Congress.
The Senate’s approach is simpler, relying solely on funding from the central bank, starting out at 10% of the Fed’s operating expenses — roughly $500 million — and growing to 12% in fiscal 2013. (By comparison, the Federal Trade Commission’s budget for this fiscal year is $290 million).
Consumer groups, the chief proponents of a stand-alone agency, view the Senate’s funding approach as better. They fear that because the House bill also includes an appropriations process, it could be used to hamstring the agency by adding conditions on how its money is used. The Office of Federal Housing Enterprise Oversight, the last safety and soundness regulator that relied on appropriations for funding, was repeatedly caught up in battles over its budget.
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