House Republican Appropriators Propose $45.4 Mil. Cut in CDFI Program

FY24 spending bill additionally outlines major changes to CFPB.

House Republicans on Thursday will propose an FY24 spending bill that would provide $278.6 million for the CDFI program—a cut of almost $45.4 million from the current funding level.

In marking up its FY24 spending bill, the House Financial Services Appropriations Committee will ignore the Biden Administration’s budget request of $341 million and the conservative Republican Study Committee’s proposal to eliminate the CDFI program.

Backstory and Impact on Credit Unions

The CDFI program received $324 million this year.

Although the Republicans may have the votes to push the legislation through the Republican-controlled House, it remains to be seen if the Senate will pass legislation representing such a cut in the popular program.

The bill also calls for $3.5 million for the NCUA’s Community Development Revolving Loan Fund—the same amount the program received this year. Grants issued by the fund, the bill states, may be used for technical assistance by credit unions with a low-income designation.

CFPB Overhaul

The legislation would additionally make huge changes to the CFPB by eliminating the single-director structure and establishing a five-member commission. At the same time, it calls for $635 million for the agency—making it subject to the appropriations process.

Members of the commission would be nominated by the president and confirmed by the Senate. At least two of the commission’s members would be required to have private sector experience with consumer financial products and services.

The first chair of the committee would be the director of the CFPB when the legislation takes effect.

The U.S. Supreme Court currently is considering whether the funding scheme for the bureau is constitutional since it does not flow through the appropriations process.

If the court rules that the funding scheme is unconstitutional, Congress will be forced to deal with the issue.

However, Republicans have been proposing these changes to the CFPB for many years and they have yet to be accepted by the Senate.

What Else Is in the Bill?

The bill further includes a variety of legislative changes.

For instance, the CFPB would be prohibited from implementing the rule that requires financial institutions to report their lending to women- and minority-owned companies.

Additionally, the legislation would keep the Financial Crimes Enforcement Network (FinCEN) from implementing its beneficial ownership-reporting rule if the regulations “do not reflect congressional intent.”

Republicans and some Democrats have criticized the FinCEN rule.

Further, the bill contains a policy rider that attempts to restrict federal agencies from conducting diversity, equity and inclusion initiatives.

The bill also includes federal funds for Washington, D.C. In a provision that demonstrates the committee’s micromanagement, the bill would prevent the district from enforcing any law that would prohibit motorists from making right turns on red.