Republicans in Congress have been trying to kill the independent agency since its inception in 2010.
House Republicans are pushing a flurry of bills aimed at undermining the operations of the Consumer Financial Protection Bureau, the independent agency designed to protect consumers from unfair treatment by big banks and financial institutions.
On Thursday, the House Financial Services Committee's Subcommittee on Financial Institutions and Monetary Policy held a hearing titled "Consumer Financial Protection Bureau: Ripe for Reform." It focused on nine bills, all introduced by Republicans, that would change the structure of the bureau, make its funding optional, and reduce its power to regulate the industry.
In a memorandum dated March 6, the panel's Republican majority staff said the hearing would "examine the leadership structure, funding, budget, and operations of the CFPB and areas in which reforms are needed."
Subcommittee Chair Andy Barr, accusing the agency of using "tactics of regulation without rules," said in his opening statement:
The CFPB does not have an executive board, an independent inspector general, or any true oversight of the director. This is unlike virtually every other federal agency. The agency is led by a single partisan director, Mr. Rohit Chopra, who has routinely acted unilaterally and arbitrarily, often outside any statutory mandate, without engaging in rulemaking or compliance with the Administrative Procedures Act, and even sometimes without adjudication. This has led to the CFPB becoming the most unchecked, unaccountable agency in the entire federal government.
In his own opening statement, Illinois Rep. Bill Foster, the ranking Democratic member of the subcommittee, said: "If past is prologue, I am afraid that I may hear from my Republican colleagues not ways in which we can improve the CFPB, but ways in which we can weaken or handicap it. Many in the Republican Party have fought against the CFPB since its inception." He noted that the funding mechanism used for the CFPB is the same one used for the FDIC, the Office of the Comptroller of the Currency, and the Federal Reserve, and that those agencies "will be equally threatened if the CFPB's funding is ultimately found invalid. Republicans have effectively launched an attack that could imperil much of the financial regulatory infrastructure that has saved the U.S. economy in 2008 and again in 2020." "Roughly 80% of polled U.S. citizens support the CFPB and want the agency to continue its job," Foster said.
In 2010, the Democratic-controlled House and Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a package of reforms designed to better regulate the financial sector and to prevent another economic meltdown like the one that shook the global economy in 2008-2009. One of the law's provisions created the independent CFPB to protect consumers, funded by the Federal Reserve System rather than by Congress.
The CFPB's website states: "We aim to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information, steps, and tools that they need to make smart financial decisions."
Republican lawmakers nearly universally opposed both Dodd-Frank and the CFPB. For more than a decade, they have attempted to eliminate or gut it.
Their efforts have thus far failed, allowing the agency to win more than $16 billion in relief for consumers and collecting $3.7 billion in civil penalties through enforcement actions.
The Supreme Court said on Feb. 27 that it would hear a challenge to the bureau's funding structure.
Barr (R-KY) on March 7 introduced a bill to make the bureau subject to the annual congressional appropriations process, which he says would "rein in the largely unaccountable Consumer Financial Protection Bureau."
"Congress doesn't have to wait for SCOTUS to restore our Constitutional role," he had tweeted on Feb. 27. "If we pass the TABS Act (which I'll be introducing later this week) the CFPB will be subjected to the appropriations process like almost every other agency."
In a joint statement published by the Democrats on the House Committee on Financial Services on Thursday, Rep. Maxine Water (D-CA), the committee's ranking member, and Sen. Sherrod Brown (D-OH), the chair of the Senate Committee on Banking, Housing, and Urban Affairs, blasted House Republicans for trying to destroy the bureau.
"Make no mistake. This is about whose side you're on: workers and consumers or big corporations and Wall Street," they said. "This is not reform for the benefit of consumers, it is another page pulled from the same Republican playbook designed to destroy the CFPB and its work to empower consumers."
The government watchdog group Accountable.US noted in a press release on Thursday that Barr has received more than $6.8 million in campaign cash from the financial sector over the course of his House career.
"Big banks and predatory lenders have seen an incredible return on their multi-million-dollar investment in Congressman Andy Barr who's made a career out of obstructing consumer protection initiatives," said Liz Zelnick, the group's director of economic security and corporate power.
"Now Barr is one of the architects of the MAGA Majority plan to let their financial industry mega-donors write their own rules at the expense of average families," Zelnick continued. "It's why some members of the House Financial Services Committee would rather defund the CFPB that recoups billions of dollars for victims of financial industry abuse than work with the Biden administration to lower costs driven up by corporate greed."
Published with permission of The American Independent Foundation.
