A Wall Street-backed bill passed by the House Financial Services Committee last summer would substantially burden the signature oversight institution created by Dodd-Frank financial reform, according to a study released Tuesday.
The bill would task the Consumer Financial Protection Bureau with providing over a dozen legal opinions to banks every day, according to the Congressional Budget Office.
The CBO found that the legislation would increase CFPB costs by $81.5 million annually over the next ten years–a sizable chunk of the agency’s budget. According to an annual report published in March, the financial watchdog expects to spend $583.4 million in 2015.
Although the CBO estimated that the bill would only add $19 million to the CFPB budget in 2015, expected additional costs mandated by the bill would exceed $90 million by 2018.
The proposal, which is called Bureau Advisory Opinion Act, would order the bureau to respond to questions about the legality of “prospective activities,” and open the queries to comment periods.
Americans for Financial Reform, a progressive coalition formed after the banking collapse of 2008, denounced the bill and others before they passed the committee vote last summer. The organization said the bills “represent the latest in a continuing effort to tie the agency’s hands.”
It complained that the Bureau Advisory Opinion Act would “take scarce resources intended to protect the public.”
“While some agencies do provide limited advisory committee processes in limited circumstances, there is no previous occurrence of Congress mandating such a burdensome requirement as exists in this bill,” the group stated.
It also noted that the responses to queries, according to the bill’s initial language, were set to be confidential and exempt from the Freedom of Information Act. The secrecy provision, however, was stricken from the legislation during the markup.
The CBO estimated that the legislation would force the CFPB to annually respond to 5,000 questions from financial institutions–a slew of requests that would effectively turn part of the oversight institution into a team of legal advisers for banks.
Founded to protect consumers’ interests, the agency claimed it received 144,150 complaints about financial services in 2013.
According to MapLight, an organization that researches “money’s influence on politics,” the Bureau Advisory Opinion Act is supported by the corporate lobbying behemoth the US Chamber of Commerce. It is also backed by lesser known financial lobbyists, including the Credit Union National Association, Independent Community Bankers of America and the National Association of Federal Credit Unions.
Joining Americans for Financial Reform in opposing the legislation are the AFL-CIO, Public Citizen, US PIRG, and other progressive groups.
The CBO noted that the legislation would not affect Congressional appropriations. Most of the agency’s funding comes from the the Federal Reserve. The CFPB budget is capped at 12 percent of the Fed’s operating expenses in 2013, and is inflation-adjusted annually.
On June 10, the Bureau Advisory Opinion Act was approved by the House Financial Services Committee in a 32-27 vote split along partisan lines.
