CFPB has become the regulatory nightmare Republicans always feared

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In 2011, when we anticipated the next decade plus in America, there were many things we never would have predicted or planned for, like a global pandemic, a Jeff Bezos-led joyride to space or even the retirement of Coach Saban. However, even 13 years ago, we foresaw what my predecessor, Sen. Richard Shelby, called the "danger of an unaccountable consumer protection czar."

Back then, Sen. Shelby raised several notable concerns regarding the Obama administration's newly created Consumer Financial Protection Bureau. These concerns stemmed from the unique, dysfunctional construct of the agency and were summarized by a single question: "Regardless of who runs it, will the bureau be sufficiently accountable to the American people?" A valid and now seemingly prescient question, which should have been heeded as a warning.

In the aftermath of the 2008 financial crisis, Americans needed to regain confidence in our banking sector, our economy and the federal government. However, Washington did as Washington does and overcorrected. Democrats used their overwhelming congressional majorities to pass the Dodd-Frank Act, which included the creation of the most powerful yet unaccountable bureaucracy in the federal government — the CFPB.

This is an often-overlooked agency led by a single director serving a five-year term, without a board of governors and without congressional input on how it spends hundreds of millions of public dollars to "protect consumers." This leaves virtually no system of checks and balances in place and a very limited ability to ensure the agency truly acts in the public's interest.

We heard the warning that without proper structural reforms to the agency, "it is only a matter of time before this concentration of power is abused or misused to the detriment of the American businesses and consumers." We are there. That time has arrived.

The 2011 warnings about the CFPB from Sen. Shelby and many other Republicans have become a reality: the politicization of regulations; wasteful and unnecessary spending due to the agency's exemption from the congressional appropriations process; and the agency acting outside its legislative intent because Congress has no oversight mechanism.

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Today, the CFPB acts as a direct extension of the Biden administration's partisan agenda — using regulations to further left-wing policies and ideas to the detriment of consumers. There are countless examples, including the White House's flawed campaign to eliminate "junk fees," which the president announced while on stage with CFPB Director Rohit Chopra, or when Vice President Harris unveiled the CFPB's own rule on medical debt at a White House press event. The rulemakings themselves are certainly problematic — leading directly to higher prices for everyday Americans, and reduced availability of financial products and services. For instance, banks of all sizes say that if the CFPB eliminates their ability to utilize late fees, in order to offset the risk this imposes, they would likely have to restrict credit to less creditworthy individuals, impose higher minimum balance requirements on account holders, and limit offerings of free or low-cost checking accounts. Further, the glaring and unfortunate reality is simply the fact that the CFPB is acting as an arm of the White House, focused on scoring political touchdowns, rather than acting in the best interest of the consumers it was created to protect.

Moreover, without congressional accountability, the CFPB is wasting public funding, and in an exorbitantly reckless fashion. It has more than tripled its spending on enforcement from 2022 to 2024, including a 50% increase in the number of full-time enforcement attorneys on staff. This is on top of a budget of $9.7 million for employee travel and transportation in 2024, up from $900K in 2022.

This spending spree is similar to the Internal Revenue Service's increasingly aggressive, intrusive surveillance of ordinary taxpayers under the Biden-Harris administration. Meanwhile, the bureau's budgeting for financial education initiatives and research has simultaneously decreased. During a time of rampant, unprecedented levels of fraud, this is quite a puzzling prioritization of spending. These public funds have turned into a piggy bank for the Biden administration's partisan agenda and the CFPB's unaccountable bureaucracy, with no meaningful guardrails in place.

The Biden-Harris administration CFPB is also acting as a rogue and autocratic regulator, frequently acting outside of its congressional mandate and threatening the fiscal health of financial institutions and their ability to serve consumers. There are numerous examples of ignoring notice and comment requirements — and instead regulating through blog post, investigation and enforcement, or even taking existing statutes and unilaterally expanding them at the director's discretion. Take, for instance, the CFPB's 1071 small-business lending rule, a far-reaching regulation that imposes significant costs to our smallest community banks. This unnecessary regulatory expansion undermines the relationship banking model of small financial institutions, while allowing the CFPB to collect, store and create a public registry of personal data on business owners and consumers in our communities. Its actions are not just reckless, they are unlawful.

Reflecting on the past decade-plus, it's apparent that Sen. Shelby's warnings about this powerful bureaucracy were not posturing. They represented a legitimate concern that has only proven true over time — and in an accelerated fashion over the last few years under the current administration. It's our Main Street communities, small businesses and hardworking families who are paying the price.

Thirteen years ago, Sen. Shelby asked, "Why should one person have sweeping powers over the economy?" The answer is — one person shouldn't. It is past time to fix this and rein in the CFPB's politicalization, out-of-control spending and rampant overreach. The CFPB needs congressional oversight, and Congress needs to act now.