WASHINGTON — Rep. Andy Barr, R-Ky., the chairman of the financial institutions subcommittee within the House Financial Services panel, is reintroducing two bills that would curtail the powers of the Consumer Financial Protection Bureau.
The bills come as the bureau has been effectively shuttered by the Trump administration. While the Justice Department has said that
However, the CFPB cannot be legally eliminated without legislation, since it was created by an act of Congress.
Barr's two bills would take aim at two of the CFPB's biggest powers: Its ability to police unfair, deceptive or abusive acts and practices — known as its UDAAP authority — and to issue civil investigative demands.
The first bill would limit the CFPB's authority to find a practice abusive. Specifically, it would do so by prohibiting the CFPB from including discrimination as an abusive practice and by defining abusive conduct as an action that causes substantial injury that is not reasonably avoided, that the injury isn't outweighed by benefits to consumers or to competition or that is otherwise prohibited under consumer finance law.
It would also eliminate the bureau's ability to seek monetary relief for UDAAP acts or practices if the financial firm has established a good-faith effort to comply with the bureau and establishes a cost-benefit analysis for a rule relating to UDAAP acts or practices.
Barr previously introduced the UDAAP bill at the end of 2023. The measure garnered the support of the banking industry, which has long argued that the CFPB's UDAAP authority is too expansive.
The American Bankers Association said
"This bill would also make clear that the Bureau's UDAAP authority does not extend to discriminatory practices, which are already governed by our nation's anti-discrimination laws," the trade group said.
The second bill would heighten requirements for civil investigative demands — or CIDs, which are investigative subpoenas issued by the CFPB when looking into potential violations of law.
These subpoenas are already required to state the "nature of the conduct" spurring the investigation and the provision of the law applicable to it, according to the
Barr's bill would go a step further and require CIDs to include "specific reference to particular facts" that led to the investigation. It would also create a way for recipients of CIDs to ask follow-up questions to the bureau and set up a six-year limitation period for issuing CIDs.
The bill is also being cosponsored by two Democratic lawmakers, Reps. Vicente Gonzalez Jr. of Texas — who also cosponsored the bill alongside Barr last Congress — and first-term Jared Moskowitz of Florida.
While the bill is bipartisan, it still faces long odds of passage in this Congress. Democratic lawmakers — particularly ranking members of the House and Senate banking committees Sen. Elizabeth Warren, D-Mass., and Rep. Maxine Waters, D-Calif. — have protested the CFPB's effective shuttering, and aren't likely to lend support to anything at the moment that limits the bureau's powers.
