CFPB Will Lose Fed Blank Check in New GOP Bill

The Consumer Financial Protection Bureau, or CFPB, the brainchild of the financially and economically illiterate Senator Elizabeth Warren (D-MA), has been proposed for a major overhaul. That probably unconstitutional organization has largely escaped any Congressional scrutiny, as it is (oddly) funded not through the general appropriations process, but instead directly by the Federal Reserve.

Thanks to a group of Republicans on the House Financial Services Committee, that may be changing.

Republicans have introduced legislation that would give Congress more control over the financial consumer protection watchdog agency that has long faced opposition from Wall Street and conservatives, a move that comes after the Trump administration attempted to dismantle the agency.

Among other reforms, the bill would put the Consumer Financial Protection Bureau, which was the brainchild of Sen. Elizabeth Warren (D-MA), through the regular congressional appropriations process.

Today, the agency is funded by the Federal Reserve, meaning that Congress cannot exercise the power of the purse over it. Republicans see the CFPB as having too much power and have sought to give Congress more control over the agency.

Republicans likely see the CFPB as having too much power because the CFPB has too much power. Every function it carries out is in defiance of the limited powers of government defined by the Constitution, most particularly the 10th Amendment. And its funding setup, having been funded directly by the Federal Reserve, looks an awful lot like it was set up deliberately to evade oversight by Congress. And if it looks like a duck and quacks like a duck...

The new bill was introduced on Monday.

The Consumer Financial Protection Accountability and Reform Act (H.R. 10184) was introduced yesterday by Rep. Andy Barr (R-Ky.) and is co-sponsored by nearly 30 Republicans, including Chairman French Hill (R-Ark.). The committee previously circulated a discussion draft of the bill for public comment.

The bill will also raise the asset threshold at which financial institutions fall under the CFPB's scrutiny from $10 billion to $30 billion, and will add protections from CFPB enforcement for what are known as small-dollar credit products. It will also lower the penalties that the CFPB is able to levy.

The Trump administration, remember, has been trying to eliminate, or at least defang, the CFPB since President Trump's second term began in 2025.

Now, here's the catch (there's always a catch): It's not at all clear that this bill, however well-founded, is going anywhere. We are in the last few weeks of the current Congress, and all of the House of Representatives and a third of the Senate are up for grabs. This bill is just in the starting stages, and depending on the results of the midterms, it may not be possible to revive it in the session starting in January of 2027. Any bill introduced at this stage in the game is probably going to be sitting on the shelf for now.

Even so, reining in the CFPB is something that badly needs doing. This is, arguably, a rogue agency, the vision of a Senator who has little or no idea how financial markets work, who has little or no knowledge of market economics, and who doesn't care in the slightest about the Constitution or its limits on the powers and scope of government. In that, at least, she has a lot of company.

Much depends on the outcome of this November's midterm elections. Reforming and reining in the CFPB is one more item for the list.

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