CFPB Opponents May Be Fighting an Uphill Battle

Groups opposing funding scheme may get an icy reception on Capitol Hill.

David Baumann


Oct 11



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David Baumann

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David Baumann

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CFPB logo on an office door..

As progressive and consumer groups continue to relish the skeptical reaction that U.S. Supreme Court justices had over whether the CFPB’s funding scheme is unconstitutional, opponents of the agency’s structure may have to fall back on Congress to make the changes they want.

And if the past is any indication, the reaction they receive on Capitol Hill might not be any better than they received across the street at the Supreme Court.

Background on Case

On Oct. 3, the court heard oral arguments in the high-profile case in which the CFPB is attempting to defend its current funding scheme. The Community Financial Services Association of America had filed suit challenging the agency’s payday lending rule. The association argued that the rule should be voided because the CFPB does not go through the annual appropriations process. The Fifth Circuit Court of Appeals agreed and the CFPB appealed that decision to the Supreme Court.

During the arguments, even the court’s conservative members seemed skeptical of the CFSA’s argument—a development that was noted by 40 progressive and consumer groups, in a joint statement last week.

Groups Pleased With SCOTUS

"It is reassuring to see that several justices—including Thomas, Kavanaugh, and Coney Barrett—appeared skeptical of the payday lenders’ theory, which has not been accepted by a single court except the Fifth Circuit,” the groups, including Americans for Financial Reform, the Center for Responsible Lending, Inclusiv and the America Federation of Teachers said. “The justices’ questions regarding the broad implications for our economy, financial system, and congressional authority suggest that the payday lenders will not be successful in their attempt to defund the agency’s operations.”

If those groups are correct, then opponents of the agency’s funding scheme and organization, including credit union trade groups, will have to rely on Congress to change it.

That legislation has stalled on Capitol Hill since it first was introduced. In some years, a Republican-controlled House passes such legislation, but it has stalled in the Senate—even when Republicans controlled that chamber.

This year, House Republicans are taking another stab at it.

Barr’s Big Changes

The House Financial Services Committee this year has approved H.R. 2798, legislation sponsored by Financial Institutions and Monetary Policy Subcommittee Chairman Rep. Andy Barr, R-Ky.

That bill, which Republicans have introduced in the past, would convert the agency into a five-member commission, subject it to annual appropriations and make myriad other changes.

“The CFPB is the most unaccountable and authoritarian agency in the entire federal bureaucracy,” Barr said, as he introduced the bill. “I’m leading this legislation to give the CFPB the wholesale makeover it needs to finally be accountable to Congress.”

The bill has not gone to the House floor.

Other Bills Introduced

And Barr is not alone in sponsoring bills that would make changes to the CFPB:

–Rep. Scott Fitzgerald, R-Wis., is sponsoring H.R. 1749, which would require the CFPB to specifically consider the impact of proposed rules on small entities.

–Rep. Alexander Mooney, R-W.V., has introduced H.R. 1313, which would require the CFPB to provide more detailed justifications for its rules.

–Rep. Tom Emmer, R-Minn., is sponsoring H.R. 2489, which would establish the Office of Economic Analysis at the CFPB.

And Rep. Byron Donalds, R-Fla., is joined by eight cosponsors in pushing H.R. 2937, which would make one change to the CFPB.

It would abolish the agency.


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