On April 26, the House Financial Services Committee held a markup of 15 bills, including H.R. 2798, the CFPB Transparency and Accountability Reform Act, sponsored by Rep. Andy Barr (R-KY). The bill includes provisions from seven different pieces of legislation:
- Title I: R. 4773, the Consumer Financial Protection Commission Act, sponsored by Rep. Blaine Luetkemeyer (R-MO), would convert the CFPB to a five-member bipartisan commission with commissioners appointed by the president and confirmed by the Senate. The bill also eliminates the director position.
- Title II: R. 1382, the TABS Act of 2023, sponsored by Rep. Barr, would require the CFPB to be funded through the traditional congressional appropriations process. The bill would also change the name of the CFPB to the “Consumer Financial Empowerment Agency.”
- Title III: R.1411, the CFPB–IG Reform Act of 2023, sponsored by Rep. Luetkemeyer, would create an independent inspector general office for the CFPB. Currently, the Federal Reserve and CFPB both share a single inspector general office.
- Title IV: R.2489, the CFPB Dual Mandate and Economic Analysis Act, sponsored by Rep. Tom Emmer (R-MN), would create an Office of Economic Analysis in the CFPB to review all current and proposed rules, orders and guidance.
- Title V: R.1313, the Transparency in CFPB Cost-Benefit Analysis Act, sponsored by Rep. Alexander Mooney (R-WV), would require enhanced rulemaking requirements for the CFPB.
- Title VI: R.1749, the Making the CFPB Accountable to Small Businesses Act of 2023, sponsored by Rep. Scott Fitzgerald (R-WI), would require the CFPB to include size and sophistication-based tailoring regulations in Small Business Regulatory Enforcement Fairness Act (SBREFA) panel reviews.
- Title VII: R.2490, the CFPB Whistleblower Incentives and Protection Act, sponsored by Rep. Emmer, would provide awards to whistleblowers reporting violations of consumer financial law resulting in sanctions over $1 million.
The CFPB Transparency and Accountability Reform Act passed the full House Financial Services Committee by a 26 to 23 vote, split on party lines with only Republicans voting in favor and all Democrats voting against the bill. Rep. Byron Donalds (R-FL) and Rep. Ralph Norman (R-SC) also voted against the legislation. Rep. Donalds sponsored and Rep. Norman co-sponsored the Repeal CFPB Act, which would abolish the CFPB.
In the markup, Rep. Barr described the CFPB as an agency that has “dodged transparency and accountability to Congress and the American people.” Republicans united around the message and voted down six Democratic amendments to the bill, with one amendment being withdrawn. Ranking Member Maxine Waters (D-CA) framed the bill as an effort to “tear down” the CFPB as Democrats united around their opposition to changes to the CFPB. A vote on the House floor would likely be similarly split along party lines. Republicans who want to abolish the agency, such as Rep. Donalds and Rep. Norman, may present an issue for House Republican leadership if the bill were to advance to the House floor.
Brownstein Outlook
As Brownstein has discussed in the past, the Supreme Court is set to rule on questions about the constitutionality of the CFPB’s structure. Briefing in this case will happen this summer, and oral arguments are in the fall. It is possible the Supreme Court could issue a decision by the end of 2023, but there has been much speculation that a ruling is more likely in the spring of 2024. As such, it is expected that the House will likely pass these bills, but negotiations with the Senate will hang on the Supreme Court decision, and legislative action on this is more likely to happen in the summer of 2024. That said, knowing that next summer falls just a few months before a presidential election, there may be various pushes for more immediate action both by the court and Congress.
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