Although the CFPB receives its funding from the Federal Reserve and not through the congressional appropriations process, it is still on the list of agencies whose funding will be cut by the sequester. According to the report on the sequestration for fiscal year 2013 sent to Congress by the Office of Management and Budget, the CFPB’s funding will be reduced by $23 million. The report indicates that, as a non-exempt nondefense mandatory program, the sequestration requires a 5.1 percent reduction of the CFPB’s $448 million “budget account.”
As a practical matter, given the size of the CFPB’s budget, it seems unlikely that a $23 million cut will have a meaningful effect on the size of the CFPB’s workforce or its activity level. In addition, the Bureau has not yet come close to using all of the annual funding that Dodd-Frank entitles it to receive from the Fed. According to the CFPB’s FY 2013 budget justification, the CFPB is entitled to approximately $598 million in funding from the Fed for FY 2013 but estimates expenses and obligations in FY 2013 of approximately $448 million. It is unclear whether this $150 million differential represents additional funding from the Fed that the CFPB can call on in FY 2013 despite the sequester. If it does, it would more than cover the $23 million cut.
