WASHINGTON May 22 Two Wall Street financial
regulators would face cuts or major structural changes under
President Donald Trump's fiscal 2018 budget proposal
According to an Office of Management and Budget document on
Monday, the U.S. Consumer Financial Protection Bureau, which was
created by the 2010 Dodd-Frank reform law to protect borrowers
from predatory lending, would undergo a "restructure." This
would reduce the federal deficit by $145 million in the 2018
fiscal year, it said.
The Securities and Exchange Commission, which polices
securities markets, would have its reserve fund, established
under Dodd-Frank, used to supplement its budget.
In recent years, the fund has been used to overhaul the
SEC's information technology, including upgrades to the filing
system for public companies and initiatives to help police fraud
and track equities trading patterns.
The White House document said the elimination of the fund
would reduce the deficit by $50 million a year, which is the
maximum amount the SEC is allowed to deposit annually.
Currently, both the SEC and CFPB budgets do not impact the
The CFPB's $605.9 million budget is funded by the Federal
Reserve, which is not subject to congressional appropriations.
Congress does decide the SEC's $1.6 billion budget, but it
is deficit neutral because the fees it collects from Wall Street
firms are matched by the amount Congress sets aside.
The reserve fund, which is separate from the rest of the
SEC's general budget, is funded through registration fees.
An OMB spokeswoman did not respond to requests for comment
about how a restructuring of the CFPB or the elimination of the
SEC's reserve fund would reduce the federal deficit.
The CFPB's structure has been under political fire for
Republicans complain it is not held accountable because it
is led by a single director who cannot be fired by the president
at will, and it falls outside of congressional budget control.
Last year, a U.S. appeals court found the CFPB's structure
violated the U.S. Constitution. The bureau is slated to fight
that decision on Wednesday, when the full panel of appellate
judges will reconsider the ruling.
Legislation proposed recently by House Republicans would
subject the CFPB to appropriations. A report by the
Congressional Budget Office estimated that such a change could
help reduce direct spending by $6.9 billion between 2018-2027.
The SEC's reserve fund has long been a target of
congressional Republicans, who have led efforts to prevent the
SEC from using portions of the money.
In July 2015, the SEC's inspector general predicted that a
cancellation of the fund would stall IT modernization and harm
(Reporting by Sarah N. Lynch; Editing by Cynthia Osterman)