Reconciliation Recommendations of the House Committee on Financial Services

Legislation Summary

H. Con. Res. 14, the Concurrent Resolution on the Budget for Fiscal Year 2025, instructed the House Committee on Financial Services to recommend legislative changes that would decrease deficits by at least $1 billion over the 2025-2034 period. As part of the reconciliation process, the House Committee on Financial Services approved legislation on April 30, 2025, that would reduce deficits.

Estimated Federal Cost

The reconciliation recommendations of the House Committee on Financial Services would, on net, decrease deficits by $5.2 billion over the 2025-2034 period. The estimated budgetary effects of the legislation are shown in Table 1. The costs of the legislation fall within budget functions 370 (commerce and housing credit) and 600 (income security).

Basis of Estimate

For this estimate, CBO assumes that the legislation will be enacted in summer 2025. CBO’s estimates are relative to its January 2025 baseline and cover the period from 2025 through 2034.

Direct Spending and Revenues

CBO estimates that enacting the bill would decrease direct spending by $8.5 billion and decrease revenues by $3.3 billion; the deficit would decrease by $5.2 billion over the 2025‑2034 period (see Table 2).

Green and Resilient Retrofit Program for Multifamily Family Housing

Section 50001 would rescind the unobligated balances of the Department of Housing and Urban Development’s Green and Resilient Retrofit Program. Using information from the Department of Housing and Urban Development, CBO estimates that enacting the rescission would decrease direct spending by $138 million over the 2025-2034 period.

Public Company Accounting Oversight Board

Section 50002 would transfer the authorities of the Public Company Accounting Oversight Board (PCAOB) to the Securities and Exchange Commission (SEC) no later than one year after enactment. At the time of that transfer, the SEC would not be permitted to collect and spend accounting support fees authorized under the Sarbanes-Oxley Act of 2002 that the PCAOB currently collects. Those fees, which fund the board’s activities, are treated as revenues and are available to be spent without further appropriation.

CBO expects that the board’s authorities would be transferred to the SEC around the end of fiscal year 2026 and that, starting in 2027, accounting support fees would no longer be collected and spent. CBO estimates that eliminating the authority to collect the fees would decrease direct spending by $3.2 billion over the 2027-2034 period.

Eliminating the fee authority also would reduce collections of fees by $3.3 billion. However, reducing such fees tends to increase taxable income for workers and businesses, leading to increased collections of income and payroll taxes. As a result, CBO expects that the reduction in fee collections would be partially offset by increases in tax receipts of about 25 percent of the gross fee reduction each year.[1] CBO estimates that, on net, revenues would decrease by $2.4 billion over the 2027-2034 period.

Although CBO anticipates that the SEC would collect fees of similar magnitude to fund those activities, the collection and spending of fees imposed by the SEC are contingent on annual appropriations providing that authority to the agency. CBO has not reviewed this legislation for effects on spending subject to appropriation, so any costs for the SEC to implement the legislation are not included in this estimate.

Bureau of Consumer Financial Protection

Section 50003 would decrease the maximum amount that the Consumer Financial Protection Bureau (CFPB) may request from the Federal Reserve each year to cover operating expenses. Under current law, the CFPB may request a transfer of up to 12 percent of the Federal Reserve’s operating expenses from 2009, adjusted for inflation each year beginning in 2013. The provision would reduce the cap to 5 percent of the Federal Reserve’s operating expenses in 2009, adjusted for inflation each year beginning in 2025.

CBO expects that the new cap would take effect at the beginning of 2026 and that the CFPB will have already received its final quarterly funding from the Federal Reserve for 2025. CBO estimates that enacting the provision would reduce transfers from the Federal Reserve by about $4.2 billion and reduce direct spending by $3.9 billion over the 2026-2034 period.

The Federal Reserve System transmits its net income to the Treasury as remittances, which are recorded as revenues. Transfers to the CFPB reduce those remittances but are recorded as other miscellaneous receipts in the budget; those two revenue streams net to zero over the 2025-2034 period. Changes in costs for the Federal Reserve banks have historically resulted in changes to remittances during the same year. However, since fiscal year 2023, the central bank has recorded a deferred asset to account for accrued net losses from expenses in excess of income. As a result, remittances have been largely suspended. In CBO’s projections, remittances from the Federal Reserve will generally be suspended until 2030, and most of the changes in costs incurred by the system during that time will not be recorded as a change in remittances until they resume.[2]

Consumer Financial Civil Penalty Fund

Section 50004 would prohibit the CFPB from spending amounts in the Civil Penalty Fund for any purpose other than to pay victims of violations of consumer financial law for which penalties have been imposed. Under current law, the CFPB deposits penalties collected from judicial or administrative actions into the Civil Penalty Fund; in addition to paying victims of violations, the CFPB uses those amounts for consumer education and financial literacy programs.

Under current rules, the CFPB may use amounts associated with one penalty to pay victims associated with another penalty. This provision would effectively prohibit that practice and also would bar the CFPB from spending amounts on consumer education or financial literacy programs. Based on an analysis of the amounts returned to the fund in recent years and using other information from the CFPB, CBO expects that enacting this provision would reduce direct spending by $9 million over the 2025-2034 period.

Financial Research Fund

Section 50005 wouldcap assessments collected by the Office of Financial Research (OFR) and deposited into the Financial Research Fund at a three-year moving average of the expenses of the Financial Stability Oversight Council (FSOC). Under current law, the OFR collects assessments from large financial institutions to fund its operations and the operations of the FSOC. Those assessments are recorded as revenues and are available to be spent without future appropriation. CBO estimates that enacting the provision would decrease direct spending on OFR and FSOC activities by $1.2 billion.

Capping assessments also would reduce revenues by $1.2 billion. However, reducing such fees tends to increase taxable income for workers and businesses, leading to increased collections of income and payroll taxes. As a result, CBO expects that the reduction in fee collections would be partially offset by increases in tax receipts of about 25 percent of the gross fee reduction each year. On net, CBO estimates that revenues would decrease by $906 million under this provision.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting the legislation would not increase net direct spending or on‑budget deficits in any of the four consecutive 10-year periods beginning in 2035.

Mandates

If the SEC increases fees to offset the costs associated with implementing provisions in section 50002 of the reconciliation recommendations of the House Financial Services Committee, the legislation would increase the cost of an existing mandate on private entities required to pay those assessments. CBO estimates that the cost of the mandate would exceed the annual threshold for private-sector mandates established in the Unfunded Mandates Reform Act (UMRA) ($206 million in 2025, adjusted annually for inflation).

The bill contains no intergovernmental mandates as defined in UMRA.

Federal Costs:

David Hughes (for the Consumer Financial Protection Bureau, Financial Research Fund, and the Public Company Accounting Oversight Board)
Zunara Naeem (for the Department of Housing Urban Development)

Revenues:

David Hughes (for the Financial Research Fund and the Public Company Accounting Oversight Board)
Nathaniel Frentz (for the Consumer Financial Protection Bureau)

Mandates: Rachel Austin

Estimate Reviewed By

Justin Humphrey
Chief, Finance, Housing, and Education Cost Estimates Unit

Joshua Shakin
Chief, Revenue Estimating Unit

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis

H. Samuel Papenfuss 
Deputy Director of Budget Analysis

Chad Chirico 
Director of Budget Analysis

[Table 2 is on the next page.]

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