House Republicans Seek to Cut 70 Percent of CFPB Funding

The U.S. House Committee on Financial Services on April 30, 2025, voted to approve Republican-backed budget legislation that would eliminate almost all funding to the CFPB.

In a 30-22 vote along party lines, the draft bill would lower the CFPB funding cap from 12 percent to 5 percent and redirect all unallocated funds to the U.S. Department of the Treasury. This reduction, approximately $249 million, would return the agency to the funding allocated in the wake of its establishment in 2011, well before full operations had commenced.

Committee Chairman French Hill (R-Ark.) categorized the draft bill as a means to "put our nation back on a responsible fiscal trajectory" as "government spending has been on a one-way ratchet." Not only does this draft bill advance the Trump Administration's objective of decreasing government spending, but it also comes as the latest strategy behind the administration's goal of dismantling the CFPB. As the administration has been enjoined by the U.S. Court of Appeals for the District of Columbia Circuit from dismantling the CFPB via Reduction in Force (RIF) notices pending appeal, as previously reported by Holland & Knight, this new strategy seeks the same result of curtailing agency operations, but utilizes legislative action to do so. This strategic adjustment comes after the administration received pushback for utilizing executive action to dismantle or amend a statutorily created agency. The agency was established by Congress as part of the Dodd-Frank Act and, therefore, any attempts to dismantle or amend its obligations require congressional authorization. Accordingly, rather than utilizing only the executive branch to eliminate the CFPB, the Trump Administration has now turned to the legislature.

Though the bill has been approved in the House committee, it will ultimately require approval by the full House and the Senate, where it is guaranteed to face pushback from House and Senate Democrats. Just days before this draft bill was approved, Sen. Elizabeth Warren (D-Mass.), on behalf of the U.S. Senate Committee on Banking, Housing and Urban Affairs, not only requested a detailed report from the CFPB on its ability to carry out its statutorily required functions, but also received a commitment from the U.S. Government Accountability Office to review matters relating to the CFPB's recent actions, as Holland & Knight previously reported.

The question surrounding changes to the CFPB has been simple: Do proposed changes leave the agency with sufficient resources to conduct the statutory functions required by Congress? Until this point, this question has been utilized primarily to address the agency's attempt to curtail operations by terminating its staff. As previously reported by Holland & Knight, the U.S. District Court for the District of Columbia enjoined the CFPB from moving forward with Reductions-in-Force (RIFs), as they would ultimately deprive the agency of sufficient staff to support statutorily required functions.

Now the same question remains but is applied to CFPB funding: Can the CFPB conduct all statutorily required functions with significantly reduced financial resources? The proposed budget cuts slash almost 70 percent of the CFPB's budget – yet, no legislative changes have been made to the agency's statutory functions. Therefore, the agency must conduct the same operations with 30 percent of the funding. If this reduced funding cannot sufficiently support the same required operational requirements, significant concerns and recourse are likely on the horizon.

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