Representative Jeb Hensarling, the chairman of the House Financial Services Committee, is gearing up to move ahead with legislation that would greatly weaken the Consumer Financial Protection Bureau.
According to a report by The New York Times, citing a leaked memo by Hensarling, the Republican from Texas, who has long been a critic of the CFPB, detailed in the memo plans to weaken the CFPB leadership by enabling President Trump to replace the director at any time. Legislation would also limit the CFPB’s enforcement authority, which would reduce its ability to set rules. The memo also called for the consumer complaint system to be repealed. Under the lawmaker’s legislation, the CFPB’s enforcement tools would be reduced, preventing it from being able to pursue businesses that take part in deceptive practices. What’s more, the legislation would restrict the CFPB’s oversight and restrict its ability to go after large publicly traded companies that are already regulated by the Securities and Exchange Commission.
“This would substantially change the structure of the CFPB and greatly limits the scope of its authority,” said Hunter Wiggins, former principal deputy enforcement director at the bureau, in the NYT report. Reaction to the leaked memo was swift among incensed Democrats who are trying to protect the CFPB from President Trump and the Republicans. Senator Sherrod Brown of Ohio, the ranking Democrat on the Senate Banking Committee, slammed Hensarling’s plan, telling NYT that Republicans are trying to make the CFPB ineffective. “It took less than three weeks for House Republicans to show their hand on how they will renege on candidate Trump’s campaign promises to hold Wall Street accountable and help working Americans,” Brown said after reviewing the memo in the report.
Last week, Hensarling laid out his disdain for the CFPB in an article for The Wall Street Journal in which he described the CFPB as a so-called “rogue agency” created to be “insulated” from oversight on the part of the congress, president and voters. ”The regulatory web spun by the CFPB can make every provider of financial services guilty until proven innocent, inviting selective enforcement and financial shakedowns,” he said in the article.