President Trump unveiled his fiscal year 2021 budget to run the country yesterday, proposing to spend a record $4.8 trillion. While the president’s proposal is a starting ground for negotiating a budget with Congress, it is an important document that illustrates where he thinks money should be spent, and there are a number of areas that affect the credit and collection industry.
- Similar to previous proposals from the White House, President Trump once again expressed his interest in forcing the Consumer Financial Protection Bureau to go through the congressional appropriations process for its own budget, rather than continue to receive its funding directly from the Federal Reserve. Like in previous years, this proposal is unlikely to actually happen, especially with Democrats controlling the House of Representatives. The President’s budget proposal also called for a reduction of 200 employees at the CFPB.
- Even though it would have no control over its budget, the president also proposed capping the amount that the CFPB could draw from the Federal Reserve at $485 million, which is equivalent to the CFPB’s budget from 2015. “These changes would allow the CFPB to focus its efforts on enforcing enacted consumer protection laws,” the White House said in the budget proposal. The president had proposed a budget of $636 million for the CFPB in his budget proposal from a year ago.
- The president’s budget proposal would also cut $170 billion in student loan spending, reduce the number of student loan repayment options, and do away with the Public Service Loan Forgiveness Program, which allows individuals working for not-for-profit organizations or the federal government to have the balances on their student loans forgiven if they make 10 years of on-time payments. “The Trump Administration already has a reputation of being anti-borrower,” said Mark Kantrowitz, a higher education policy expert. “This just takes it further.”