Removing Barriers Blog

Draft House Appropriations Bill Contains Change to CFPB Funding Structure
Posted May 24, 2016 by Chandler Schuette

The House Appropriations Committee Subcommittee on Financial Services and General Government approved its draft appropriations bill on Wednesday.  The bill includes a number of positives provisions for credit unions, including CUNA-supported provisions to change the structure of the CFPB, and increased or stable amounts for certain credit union development funds.  

Provisions in the bill would bring the CFPB under the annual congressional appropriations process, change the leadership to a five-person commission, and require the bureau to study the use of arbitration clauses prior to issuing any regulation.

We support both of these bills:  H.R. 1486 which would move the Bureau under the appropriations process, and H.R. 1266 which would change the leadership structure. We believe that placing the CFPB under the appropriations process is a step toward ensuring credit unions are not further burdened with regulations. We are also concerned that the bureau’s recent arbitration proposal is inappropriate for credit unions and could serve to deny credit union members an efficient alternative to litigation.

The draft bill also maintains or increases funding levels for several important community funds, including:

  • $2 million for the NCUA’s Community Development Revolving Loan Fund, which provides grants and loans to low-income designated credit unions;
  • $250 million for the U.S. Treasury’s Community Development Institution (CDFIs) Fund, which awards funds to certified CDFIs, of which there are 276 credit unions, as of April 30. This amount is more than requested by President Barack Obama, who asked for $245,923,000;
  • $28.5 billion for the Small Business Administration’s (SBA) 7(a) program. The SBA guarantees up to 85% of 7(a) loans, and the guaranteed portions of the loan do not count against a credit union’s member business lending cap. This amount is more than the $27 billion Obama asked for;
  • $7.5 billion for the SBA’s 504 loan program, which is used for long-term, fixed-rate financing for major fixed assets such as equipment and real estate.