Consumer Advocates: Republicans Are Trying to Cripple CFPB

Consumer advocates have written to a House subcommittee in support of the CFPB amidst Republican calls for a major agency overhaul. Learn why.

David Baumann


Mar 14



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David Baumann

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David Baumann

A squiggly pink arrow pointing downward and to the right.

Letters to subcommittee show support for embattled bureau, reject calls for agency overhaul.

Consumer advocates are calling on Congress to resist efforts to change the CFPB’s funding scheme until the U.S. Supreme Court weighs in on the issue and to reject efforts to enact legislation they believe will weaken the bureau.

“These misguided approaches will place every American taxpayer at risk by increasing the likelihood that our nation’s economy may suffer yet another financial crisis,” the Center for Responsible Lending wrote, in a letter to a House subcommittee considering proposals to fund the agency through the appropriations process.

Background and Context

The Fifth Circuit Court of Appeals has ruled that the manner in which the CFPB is funded is unconstitutional since the agency is not subject to the appropriations process. The U.S. Supreme Court has agreed to consider the case and oral arguments are likely this fall.

In the meantime, the House Financial Services Financial Institutions and Monetary Policy Subcommittee last week held a hearing to discuss a variety of proposals to change the funding method and to require additional justification when the agency issues a rule.

Republicans, who now control the House majority, consistently have criticized the CFPB under Director Rohit Chopra, contending that the agency regularly exceeds its authority.

Support for the Bureau

Center for Responsible Lending

The Center for Responsible Lending told the subcommittee in its letter that the agency’s funding “should remain exactly as it has been since its inception, with no modifications. Doing otherwise would be harmful to consumers and the industry.”

The bureau currently is funded through the Federal Reserve System.

“CFPB funding is legally defensible, constitutional, and firmly grounded in a rationale of economic stability,” the center concluded.

National Association of Consumer Advocates

Christine Hines, legislative director of the National Association of Consumer Advocates, agreed, noting in her own letter that prior to the Fifth Circuit’s ruling, no other court has ever ruled that agency funding is unconstitutional. In fact, she added, other courts have explicitly rejected the argument that the funding regime violates the Constitution.

Hines also said that placing the agency under the appropriations process would make it more susceptible to political pressure, with its independence no longer assured.

“While the CFPB has continued to actively work on behalf of consumers since the Fifth Circuit’s poorly reasoned decision, the ruling casts a shadow on all its actions as it awaits the U.S. Supreme Court’s consideration of the case,” she wrote. “This burden takes time and focus away from its mission.”

Hines said additionally that “bad actors” are citing the appeals court ruling in a “dishonorable attempt to leverage the Fifth Circuit decision to escape accountability for their misconduct.”

Public Citizen

In a third letter to House members, the watchdog group Public Citizen said that the legislation being considered by the subcommittee would “undermine the structure of the CFPB, overburden the CFPB with onerous bureaucratic requirements and would severely limit the CFPB’s ability to carry out its core functions.”

What Happens Next?

The House Financial Services Committee has not indicated which, if any, of the proposed bills it will consider, although Chairman Rep. Patrick McHenry, R-N.C., is an avowed opponent of the CFPB under Chopra leadership.

While Republicans are likely to have the votes needed to push several of the bills through the House, it is unlikely that the Senate—where controversial legislation generally requires 60 votes—will pass them.

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