Key Points
- The senator determined that repaying the Consumer Financial Protection Bureau (CFPB) through budget adjustments was a violation of the Bird Rules. This means that 60 votes must pass.
- The ruling disrupts the Trump administration’s “one big, beautiful bill” efforts to eliminate the CFPB by cutting funds to zero.
- Another federal court has also temporarily blocked the administration’s attempts to fire a large portion of the CFPB workforce and questioned its legal basis.
Senate Republicans have been blocked this week to remove the Consumer Financial Protection Bureau through special budget measures as the senator has ruled out efforts under the Bird Rules. The decision is required to remove clauses from the budget adjustment process, advance 60 votes, and effectively terminate the pass in the current legislative package.
The proposal is part of a “one big beautiful bill” that aims to cut funding for the CFPB by reducing budgetary officials to 0% of the Federal Reserve operating costs, a move to effectively shut down agencies. Congress’s Elizabeth McDonough found the provisions violate Senate rules that allow them to govern what is included in the settlement bill reserved for budget items.
“There are rules that you must follow,’ Oregon Sen. Jeff Markley saidranking Democrats on the Senate Budget Committee.
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What is Bird Rule? Who is the council member?
Named after former Senator Robert Byrd, the Bird Rule limits what types of provisions can be included in the settlement bill. The settlement bill is not subject to filibusters and requires only a simple majority, but it should focus solely on budget issues. This rule blocks “unrelated” items that contain provisions where budgetary effects are effectively policy changes.
The senator decides which provisions meet that test. Elizabeth McDonough, a nonpartisan official who has held the position since 2012, provides procedural advice to lawmakers and the chairman. Her ruling is technically advised, but is mostly always followed to maintain consistency and avoid procedural confusion.
In this case, MacDonough effectively eliminates CFPB as an organisation by setting CFPB funds at 0% and finds it is not entitled to be a budget clause under the settlement rules.
Previous attempts to terminate CFPB
The failed attempt to eliminate the agency through settlement is not the Trump administration’s sole effort to reduce the CFPB. In April, the administration fired around 90% of the bureau’s workforce, urging federal judges to temporarily block the lawsuit.
Judge Amy Berman Jackson of the U.S. District Court in Washington ruled that layoffs could not proceed without a clear legal basis. During the hearing, she expressed concern that the administration was dismantling the bureau without performing its legal duties.
The layoffs would have reduced the CFPB to just 200 employees, critics say it will effectively end the agency, preventing it from doing its job. The administration argues that small institutions can still fulfill its legal orders.
What happens next?
Congressional ruling requires Republicans to remove the CFPB’s repayment language from the settlement package or try to pass regular orders. This requires 60 votes. With the narrow majority of Republicans, that path is unlikely.
Senate majority leader John Tune had previously shown he would not try to override Congressional decisions by setting a new precedent.
Federal Court Cases over CFPB Layoffs It is planned to continue, and a follow-up hearing is planned to determine whether the administration has complied with previous court orders.
CFPB created as part of Dodd Frank Act 2010continues to be one of the most important financial regulations in recent history. But its survival is now based on legal challenges and Senate procedures, informing Democrats will fight further attempts to dismantle the institution.
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Editor: Colin Graves
Senators’ Congress’ Block CFPB’s refund push first appeared in university investors.
