During a Wednesday hearing, Republican lawmakers blasted what they dubbed past overreach by the Consumer Financial Protection Bureau and pushed for changes at the agency, including turning the bureau into a five-person commission.
“Nowhere has overregulation and overreach been more evident” than at the CFPB, which “became the most unchecked and unaccountable agency in the entire federal government under the previous administration,” Rep. Andy Barr, R-KY, said Wednesday during a House Subcommittee on Financial Institutions.
A number of proposed bills sponsored by GOP lawmakers and tied to the hearing took aim at the CFPB’s leadership and funding structures.
One would transition the bureau into an independent agency brought under the congressional appropriations process; another would turn the CFPB into a five-member bipartisan commission, with a requirement that at least two members have private-sector experience; and another would create an inspector general specifically for the CFPB.
Under the direction of Rohit Chopra, the CFPB was highly active — especially at the end of the Biden administration. During Chopra’s last three months at the bureau, the CFPB implementing rules related to overdraft fees and open banking, and filed lawsuits against banks such as Capital One and Comerica, as well as peer-to-peer payment platform Zelle’s owners and operators.
Since President Donald Trump has returned to the White House, the CFPB has been thrown into turmoil. The Elon Musk-associated Department of Government Efficiency infiltrated the bureau in February, and Acting Director Russ Vought ordered employees to stop working and then tried to execute a mass firing, which is now the subject of a legal battle.
Wednesday’s hearing served as something of an airing of Republican grievances related to Chopra and the CFPB during his tenure. Barr flagged what he called “abuse” of civil investigative demands under Chopra. A bill Barr, the subcommittee’s chair, is sponsoring would impose guardrails on the use, scope and process surrounding CIDs, so the bureau’s investigations don’t subject banks to “undue burdens.”
The bureau’s unfair, deceptive or abusive acts or practices authority was another target, and a separate proposed bill seeks to clarify the CFPB’s authority to define financial practices as “abusive” and set clearer standards for UDAAP enforcement actions.
The Consumer Bankers Association supports a “credible and durable” consumer regulator, but under previous leadership, the CFPB failed to follow the law and exceeded statutory authority, said David Pommerehn, general counsel and head of regulatory affairs at the trade group. Legislative reforms are needed “to create long-term stability and credibility for the CFPB,” Pommerehn said.
Rep. Bill Huizenga, R-MI, called for a change to the bureau’s structure, saying the CFPB’s single director “who has no accountability, no boundaries, limitless funding … is a recipe for disaster.”
“I think that’s why we’ve seen this one agency be challenged so much over its own existence and its actions,” he said.
Barr, who called the CFPB an “Orwellian predator,” needled Democrats, highlighting their objections to Musk’s involvement: “If you are so concerned about unelected officials in the executive branch controlling funding in the future of the bureau, why aren’t you supporting reforms to the bureau’s structure to bring oversight back to Congress?”
Rep. Bill Foster, D-IL, however, said the Trump administration’s actions within the bureau the past two months “are not reforms.”
“The bureau’s work is important, it is constitutional and consumers benefit when financial firms are held accountable,” said Foster, the subcommittee’s ranking member. “We need to reopen the CFPB and let its employees do their jobs.”
Seth Frotman, former CFPB general counsel and senior adviser to Chopra, called the current administration’s actions to fire staff and shut down the agency “blatantly illegal.”
“What is happening at the CFPB is an insult — to Congress, to the rule of law — to all of us,” he said. “You, your family, your neighbors, and your community are at risk today because President Trump, Elon Musk and Russ Vought have corruptly handed over the keys of our nation’s consumer watchdog to the largest banks and tech companies in the world.”
The Trump administration has been “hellbent” on destroying the CFPB, dropping roughly a dozen enforcement actions or lawsuits and shuttering certain agency functions, he said.
“The only people this helps are too-big-to-fail bankers and Silicon Valley billionaires,” Frotman said.
Frotman pointed to Trump’s firing of Democratic commissioners on the Federal Trade Commission. “People need to look around,” he said, calling it a “through-the-looking-glass” moment. “To be lectured about separation of powers at this moment in time is something else.”
Democrats voiced their concerns with Musk’s access to CFPB data, given his ambitions to turn his social media site X into a payments platform. Frotman called that a “central issue” for the committee, if it’s concerned with oversight and separation of powers.
In its current hobbled state, the CFPB is “certainly not overseeing the nonbank payments system in this country, which is the direct ambitions of Elon Musk and most of Silicon Valley,” Frotman said.
Rep. Sean Casten, D-IL, said if lawmakers “give a damn about consumer protection, if we give a damn about competition and functioning markets, we should be petrified by what Musk is doing.”
“We going to defend capitalism around here? We going to defend competition?” Casten said, looking at the subcommittee members. “Or are we going to put on a ball gag, climb down into the dungeon and just do whatever Trump tells us to do?”
