Senate Republicans Seek Major Cuts to CFPB Budget/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Senate Republicans propose slashing the CFPB’s budget by half, risking hundreds of job losses. The cuts are tied to President Trump’s sweeping “Big Beautiful Bill.” Democrats vow to fight the move, calling it a threat to consumer protections.
Quick Look
Senate GOP Pushes CFPB Funding Cuts
- New bill halves CFPB budget, risking layoffs
- GOP aims to weaken financial watchdog authority
- Democrats warn consumer protections could collapse
Senate GOP Pushes to Slash CFPB Budget, Threatening Hundreds of Jobs
Deep Look
Senate Republicans are advancing a proposal to slash funding for the Consumer Financial Protection Bureau (CFPB) by nearly half, a move that could result in hundreds of job losses at the agency tasked with policing financial institutions.
The funding cut is folded into President Donald Trump’s sweeping “Big Beautiful Bill,” a package of tax cuts, spending changes, and regulatory rollbacks making its way through Congress. While the bill is widely expected to pass, the proposed cuts to the CFPB mark a significant victory for Republicans who have long sought to rein in—or eliminate—the agency created after the 2008 financial crisis.
CFPB Faces Major Budget Hit
Under the Senate Banking Committee’s proposal, the CFPB’s budget would drop from 12% of the Federal Reserve’s annual profits to just 6.5%. Unlike other federal agencies funded through congressional appropriations, the CFPB draws its budget directly from the Fed. However, a sharp cut in its funding cap would force the bureau either to shrink its operations dramatically or to seek funding through the politically fraught appropriations process—a goal Republicans have pursued for years.
“The committee’s language decreases the Consumer Financial Protection Bureau’s funding cap without affecting the statutory functions of the Bureau,” said Sen. Tim Scott (R-S.C.), chair of the Senate Banking Committee.
Last year, the CFPB requested $762.9 million from the Fed, close to its previous cap of $785.4 million. Halving that ceiling would create significant shortfalls, jeopardizing staff and operations.
A Weakened Watchdog
Under President Joe Biden, the CFPB aggressively pursued bad actors across the financial sector, returning billions of dollars to consumers through enforcement actions. Former Director Rohit Chopra expanded the bureau’s oversight beyond traditional banks to fintech companies, payday lenders, and credit card firms.
But under President Trump’s current term, the agency has come to a virtual standstill. Acting Director Russell Vought, also the president’s budget director, has suspended enforcement actions, stopped rule-making, and advised employees to avoid contact with outside entities, including financial institutions. Even the bureau’s press office has gone silent.
“Employees are logging in once or twice a day to check emails, but there is little supervisory or enforcement work happening at the bureau,” the report notes.
This contrasts with Trump’s first term, when the CFPB, although scaled back, still took significant enforcement actions, such as fining Wells Fargo $1 billion for sales scandals.
Political Battle Over Consumer Protection
House Republicans held hearings this week criticizing the CFPB’s previous leadership, labeling former director Chopra and his team as overzealous regulators unfairly targeting small businesses. Democrats, however, remain staunch defenders of the bureau, citing its critical role in protecting consumers and regulating emerging fintech players.
“Donald Trump and Republicans tried to shut down the CFPB by gutting its entire operating budget to zero,” said Sen. Elizabeth Warren (D-Mass.), the CFPB’s original architect. “Now, Senate Republicans will bring to the floor a proposal that slashes the agency’s available budget so they can hand out more tax breaks for billionaires and billionaire corporations.”
Republicans initially attempted to zero out the CFPB’s budget entirely, but the Senate Parliamentarian ruled that move out of bounds under reconciliation rules. The current proposal—cutting funding roughly in half—survived Parliamentarian scrutiny and passed the Senate Banking Committee. However, Senate Democrats are expected to fight the measure on the Senate floor.
The proposed funding cuts are part of broader GOP efforts to curtail regulatory oversight while advancing tax reforms and other priorities in the “Big Beautiful Bill.” The outcome will likely hinge on negotiations as the bill advances through Congress.
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