House Subcommittee Chairman Pushes Legislation To Convert CFPB Into A Commission, Make It Subject To Appropriations

House Financial Institutions Subcommittee Chairman Rep. Andy Barr, R-Ky., said last week that his subcommittee will place a high priority on changing the CFPB’s structure and funding.

“Today, we’ll propose transitioning the CFPB to a bipartisan commission and bringing it under congressional appropriations,” Barr said, as he opened a subcommittee hearing on oversight of the agency.

“Nowhere has overregulation and overreach been more evident than at the Consumer Financial Protection Bureau, which became the most unchecked and unaccountable agency in the entire federal government under the previous Administration,” Barr said.

Barr did not say when his subcommittee or the full Financial Services Committee will mark up legislation containing his proposals.

The future of the CFPB is uncertain. The Trump Administration initially indicated that it intended to abolish the bureau, but later said that it would not be disbanded.

Subcommittee ranking Democrat Rep. Bill Foster, D-Ill., said the legislation that Barr proposed would not accomplish its goals.

“These are not reforms,” he said. “They are attacks on the bureau’s congressionally mandated duties.”

In oral and written testimony, hearing witnesses disagreed over the bureau’s operations and whether legislation is needed to make changes at the CFPB.

Bryan Schneider, a partner at Manatt, Phelps & Phillips and former Associate Director for Supervision, Enforcement, and Fair Lending at the CFPB during the first Trump Administration, attacked the single-director structure of the agency.

He said the bureau’s work “occurs within an agency whose very structure seems designed to subvert constitutional principles; it will, in its current form, likely never be able to fulfill its dual mandate of consistent regulation and enforcement coupled with market stability.”

He called on the CFPB to conduct a thorough examination of the multi-year “blizzard” of guidance, blog posts, interpretations, manual amendments, and speeches it has issued,

Schneider said that a new Senate-confirmed bureau director also should conduct a review of agency spending. He added that since 2020, the CFPB’s annual transfer of funds from the Federal Reserve has increased 36% and its headcount has increased 17%. “It is not clear that these dramatic increases are necessary or sustainable,” Schneider testified. “Furthermore, it is not clear that these additional resources have been appropriately allocated.”

He noted that the CFPB’s budget is not subject to any congressional oversight. “As a result, it goes without saying, the CFPB’s priorities are in no meaningful way subject to the priorities of the American people represented in Congress,” he added.

However, a former CFPB official in the Biden Administration criticized the House subcommittee and the Trump Administration for its attitude toward the bureau.

There is a “profound disconnect between a hearing that purports to be about ‘consumer protection’ and the devastation that this Administration’s actions and legislative agenda will unleash for working people,” said Seth Frotman, the former CFPB General Counsel  and Senior Director to former bureau director Rohit Chopra.

Frotman said the CFPB’s work “came to a screeching halt” when the Trump Administration took over the CFPB. “They have taken Wall Street’s cops off the beat, tearing the signs off the CFPB building and granting shameless pardon after shameless pardon to companies that ripped off their own customers,” Frotman told the subcommittee.

He said that nearly a dozen enforcement actions have been dropped.

Another witness, David Pommerehn, the Consumer Bankers Association’s Senior Vice President, General Counsel, and Head of Regulatory Affairs also called on Congress to transform the bureau into a five-member commission.

“The lack of long-term consistency in the rules and actions taken by the Bureau adversely affects consumers and the financial services industry by making it difficult for institutions to innovate new products and services and to meet consumers’ evolving needs,” Pommerehn said.

Ana Fonseca, President and CEO of Logix Federal Credit Union in California said she is concerned that her credit union will reach the “arbitrary” $10 billion threshold “that subjects us to greater CFPB scrutiny [and that] has a cost that takes millions of dollars away from programs to serve our members”.

Fonseca, who represented America’s Credit Unions, added, “We expect to cross this threshold in 2026, and it will pose additional costs and challenges, despite us maintaining the same focus we have always had on serving our members and helping them thrive.”