On July 22, the Senate Appropriations Subcommittee on Financial Services and General Government approved a spending bill for the 2016 fiscal year that would change the Consumer Financial Protection Bureau’s (CFPB) leadership structure by replacing the CFPB director with a five-member commission.
The bill also would bring funding for the CFPB’s budget under the annual congressional appropriations process, instead of direct funding from the Federal Reserve System. The Subcommittee believes this change will allow for increased accountability and transparency of CFPB activities and expenditures. The CFPB receives more than $600 million annually from the budget of the Federal Reserve.
In related news, on July 21, Sen. Ted Cruz (R-Texas) and Rep. John Ratcliffe (R-Texas-04) introduced legislation to eliminate the CFPB. “Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumers. The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether,” Sen. Cruz stated. “The legislation that Rep. Ratcliffe and I are introducing today gives Congress the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth. While there’s much more to do to scale back the harmful regulatory impositions of Dodd-Frank, this legislation takes a critical step in the right direction. So today let’s celebrate the CFPB’s fourth and final anniversary,” Sen. Cruz concluded.
“The CFPB’s regulatory zeal has stripped American consumers and businesses of their freedom of choice and has limited their access to capital – all in the name of a ‘we know best’ attitude from Washington. It seems like every time I go home to Texas and spend time with people across our district, I hear stories about community banks having to choose between closing their doors or consolidating into larger institutions to handle the increase in compliance costs,” said Rep. Ratcliffe.
“I hear from businesses forced to spend more time on unnecessary regulatory compliance paperwork than helping serve their customers, and financial institutions that have stopped providing certain basic financial services out of fear of retaliation from the CFPB. I’m grateful to be able to introduce this bill with 46 of my House colleagues in conjunction with Senator Cruz. The CFPB represents exactly what President Reagan warned of – a government smothering opportunity rather than fostering it. We must eliminate the CFPB,” Rep. Ratcliffe added.
We will continue to track and provide updates on these and other bills involving Congressional oversight and reform of the CFPB.