Early in the 118th Congress, legislators have proposed several bills with the goal to change the CFPB’s leadership and funding mechanisms.
03/07/2023 2:15 P.M.
3 minute read
The House Financial Services Subcommittee on Financial Institutions and Monetary Policy will meet Thursday for a hearing to “examine the leadership structure, funding, budget, and operations of the [Consumer Financial Protection Bureau] and areas in which reforms are needed,” according to a memo from the subcommittee (PDF).
The subcommittee’s hearing comes on the heels of the U.S. Supreme Court’s decision to hear a case on the constitutionality of the CFPB’s funding structure, which could result in directives to Congress to pass new legislation on the bureau’s funding, ACA International previously reported.
ACA submitted a letter (PDF) to the subcommittee in support of CFPB reform legislation.
Subcommittee Chair U.S. Rep. Andy Barr, R-Ky., introduced one of the bills for discussion during the hearing, the Taking Account of Bureaucrats’ Spending (TABS) Act (PDF), which would turn the bureau into an independent agency named the Consumer Financial Empowerment Agency and bring its funding under congressional appropriations.
“As Republicans have said for years, the CFPB’s unconstitutional funding structure improperly insulates it from Americans’ representatives in Congress,” said U.S. Rep. Patrick McHenry, R-N.C., chair of the House Financial Services Committee. “This problem is compounded when the [b]ureau is led by a rogue regulator, as it is now. Director Chopra is returning the CFPB to its Obama-era regulation by enforcement approach that harms both consumers and our economy. Republicans promised the American people we would restore accountability to the federal bureaucracy. The House Financial Services Committee is committed to delivering transparency with legislation like Congressman Barr’s TABS Act to bring the unaccountable CFPB under the annual appropriations process.”
Additional legislation introduced in conjunction with the hearing includes:
- The CFPB Dual Mandate and Economic Analysis Act (PDF), sponsored by U.S. Rep. Tom Emmer, R-Minn. This bill would update the purpose of the CFPB to implement and enforce federal consumer financial law to strengthen private sector companies in markets, without government involvement, to increase competition and consumer choice.
- The CFPB–IG Reform Act (PDF), sponsored by U.S. Rep. Blaine Luetkemeyer, R-Mo. This bill would require the appointment of an inspector general from the Board of Governors of the Federal Reserve System for CFPB oversight.
- The Transparency in CFPB Cost-Benefit Analysis Act (PDF), sponsored by U.S. Rep. Alex Mooney, R-W.Va., would enhance rulemaking requirements for the CFPB.
- The CFPB Whistleblower Incentives and Protection Act (PDF), sponsored by Rep. Emmer.
- The Consumer Financial Protection Commission Act (PDF), sponsored by Rep. Luetkemeyer, would implement a bipartisan commission to lead the bureau.
- The Encouraging Innovation and Protecting Consumers Act (PDF), no sponsor listed, would restore the functions of the bureau’s Office of Innovation.
- The Making the CFPB Accountable to Small Businesses Act (PDF), sponsored by U.S. Rep. Scott Fitzgerald, R-Wis., would impose additional requirements for covered agencies in regulatory flexibility analysis.
- The Federal Reserve Loss Transparency Act (PDF), sponsored by U.S. Rep. French Hill, R-Ark., would amend the Consumer Financial Protection Act of 2010 to clarify the funding source of the CFPB.
The witnesses slated to testify are Bill Himpler, CEO, American Financial Services Association; Brian Johnson, managing director, Patomak Global Partners LLC; Jessica Thompson, attorney, Pacific Legal Foundation; Devin Watkins, attorney, Competitive Enterprise Institute; and Keith Ellison, the Minnesota Attorney General.
In designing the CFPB, Congress debated various structures and ultimately, in a partisan manner, opted for as little accountability as possible, which has been problematic ever since, said Leah Dempsey, shareholder at Brownstein Hyatt Farber Schreck and ACA’s lobbyist.
ACA has long advocated for the bureau’s funding to be through the congressional appropriations process and respects the process that is about to unfold before the Supreme Court as well as in Congress.
The hearing will be held at 10 a.m. EST and is available to watch online.
For updates, remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.
