- Key insight: House Republicans are proposing to overhaul the CFPB's funding structure.
- What's at stake: The package includes a number of reforms wanted by banks, including limiting some of the bureau's authority to regulate "abusive" practices and providing a safe harbor for some small dollar lending products offered by depository institutions.
- Forward look: The package is unlikely to advance this Congress, but is intended to build consensus ahead of the next Congress.
WASHINGTON — House Republicans have introduced their Consumer Financial Protection Bureau revamp, which includes a provision to bring the bureau under the congressional appropriations umbrella.
The package, introduced Tuesday by House Financial Services Committee Chair French Hill of Arkansas and financial services subcommittee chair Andy Barr of Kentucky, would do away with the CFPB's longstanding funding structure, whereby the agency is funded by a request to the Federal Reserve. The bill instead would subject the CFPB to congressional appropriations, a wish-list goal for Republicans since the CFPB was created in the aftermath of the 2008 financial crisis.
The reform bill would also limit the CFPB's ability to define "abusive" practices; raise the asset threshold for financial firms to be regulated by the bureau; and provide a safe harbor for banks providing small-dollar lending products, among several other reforms.
The package isn't expected to go anywhere this Congress, but it signals Republicans' focus post midterms.
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"This is to set the stage for legislative success in the upcoming Congress," said Hill at a town hall event promoting the package Tuesday morning. "We want to try to build consensus around these points between now and the end of the year — looking for, obviously, support from Democrats on some of the points, as well as leadership, and also as a place to work with the Senate on what they think their best ideas will be."
While Democrats are expected to flip a number of seats in the coming midterm elections and have paths to win both the House and the Senate, Republicans will still have a lot of power in Washington, not least with control of the White House for two more years. Any reasonable path toward CFPB legislation in a two-year horizon would need support from both parties.
"I have, over time, had conversations with Democrats who are open to some of these concepts," Barr said. "When they express frustration with, for example, acting director [Russell] Vought or a Republican administration, their frustration is driven largely by the unaccountable nature of the structure of the agency. I think that gives us an opportunity to find some bipartisan common ground."
