President-elect Donald Trump and congressional Republicans are reportedly considering sweeping changes to the Consumer Financial Protection Bureau (CFPB).
The GOP hopes to curtail the powers and funding of the CFPB, the Washington Post reported Sunday (Nov. 25), putting them in the same camp with banks, credit card and mortgage lenders and other big financial companies.
These financial institutions, the report noted, have been battling the CFPB under Democratic control, particularly regulations against things like “junk fees.”
Rohit Chopra, the Democrat who heads the bureau, has aggressively pursued efforts to help consumers switch banks and avoid overdraft fees. Republicans have opposed these works, accusing the CFPB of regulatory overreach.
Now, with their party in control of the White House, Senate and House, there are signs of the Republican plan to impose new limits — some of them permanent — on the CFPB’s power.
“There will be a pretty significant change from the direction the agency has been going in, and I think in a positive way,” said Kathy Kraninger, who oversaw the CFPB during Trump’s first term, and now serves as CEO of lobbying group the Florida Bankers Association.
Sources told the Post that aides on Trump’s transition team have begun considering candidates to lead the CFPB and would scale back its oversight. Republican lawmakers, meanwhile, have proposed changing the bureau’s leadership structure and funding source.
Democrats, meanwhile, argue that abolishing the CFPB altogether would draw criticism from the public at large, pointing to the bureau’s popular work in stamping out scams and saving consumers money.
“The CFPB is here to stay,” said Sen. Elizabeth Warren, D-Mass, who led the agency during the Obama administration. “So I get there’s big talk, but the laws supporting the CFPB are strong, and support across this nation from Democrats, Republicans and people who don’t pay any attention at all to politics, is also strong.”
As PYMNTS wrote earlier this month on the morning after Trump was elected, the Supreme Court has ruled that the CFPB’s funding mechanism is constitutional, “in effect short-circuiting some conservative lawmakers’ efforts to raise existential questions about the bureau and pave the path toward its shuttering.”
That report also noted that one of the biggest unanswered questions related to the CFPB and the new administration is the fate of the open banking rule, which was finalized and subsequently challenged in court by the Bank Policy Institute and the Kentucky Bankers Association in October.
The CFPB argued that the rule promotes competition among banks by providing consumers with control over their data and making that data portable so that people can more easily switch financial service providers if they wish.
“Banks have pushed back, charging that data-sharing has poorly defined parameters of liability and the compliance timelines are onerous,” PYMNTS wrote. “They also allege that the CFPB has overstepped its legal authority.”
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