CBA Outlines Reforms Needed To Transform CFPB Into The Strong, Durable Regulator Consumers Deserve

CBA Releases New White Paper Ahead of Upcoming Inauguration to Guide Incoming Administration, New Congress

WASHINGTON, D.C. – Ahead of the inauguration of President-elect Trump next week, the Consumer Bankers Association (CBA) today released a new white paper – “Reforming the Consumer Financial Protection Bureau (CFPB) into a Strong and Durable Regulator Americans Deserve” – outlining immediate and long-term actions the incoming Administration could act upon and, separately, legislation for the new Congress to prioritize to transform the Bureau to better serve American consumers. The white paper follows the release of CBA’s Vision for America policy agenda released last Fall ahead of the 2024 election.

CBA President and CEO Lindsey Johnson released the following statement on the release of the white paper:

“The incoming Administration and new Congress have a unique and important opportunity to institute meaningful reforms to the CFPB. It is our hope this white paper can act as a blueprint to ensure the CFPB remains a strong, durable, and credible regulator for decades to come, regardless of what political party occupies the White House.”

Below are key recommendations from the white paper. To read the full paper, which includes more details and explanations of these recommendations, click HERE.

Immediate Regulatory Corrections

The following actions can immediately reverse several of the most egregious regulatory actions taken by the current Administration:

• Announce an intent to reconsider interpretive rules and state that in the meantime the Bureau does not intend to rely on those interpretations in its supervisory and enforcement work and that private parties should not assumed that those interpretations represent the Bureau’s current understanding of the law. The new Trump-appointed CFPB leadership should then repeal all improper guidance, including the Dodd Frank Act 1034(c) Advisory Opinion and Circular 2024-05 re: Improper Overdraft Opt-In Practices;
• Extend the effective date of the Overdraft Rule. The CFPB should then issue a new proposal, rescinding the rule;
• Extend the effective date of the Credit Card Late Fee Rule. The CFPB should then settle the litigation by issuing a new proposal, rescinding the rule; and
• Extend the effective date of the Dodd Frank Act Section 1033 Rulemaking. The CFPB should then settle the litigation by issuing a new proposal, rescinding the rule.

Near-Term Administrative Reforms

Implementing changes to current administrative and personnel policies in effect at the CFPB will bolster the agency’s ability to deliver on its core functions while simultaneously restoring the American people’s confidence that their tax dollars are being spent effectively:

• Institute Standard Agency Staffing Structure.

Long-Term Reforms

New CFPB leadership should also consider the following reforms that should be accomplished over the next four years to strengthen the credibility and durability of a regulator tasked with overseeing an industry that is critical to the nation’s economic stability – one which serves millions of Americans:

• Review “Supervisory Highlights,” guidance, and enforcement activity for adherence to the Administrative Procedure Act;
• Commit to conducting cost-benefit-analysis of all rulemakings on the impact of financial inclusion and risk-based pricing;
• Commit to aligning the CFPB’s use of its Unfair, Deceptive, and Abusive Acts and Practices (UDAAP) authorities with the Supreme Court’s clarification of the Federal Trade Commission’s Unfair Deceptive Acts and Practices authority;
• Commit to include counterparty review of press releases when settling enforcement and supervision voluntary commitments; and
• Ensure consistent consumer protections and risk management for consumers across the industry.

The Important Role of Congress

Congress can and should take appropriate action to pass legislation to ensure the CFPB operates within its authority, and to create greater stability, transparency and credibility of the CFPB. By advancing the following legislative proposals, lawmakers would help to strengthen the credibility of the agency while ensuring consumers continue to have access to highly regulated financial products that enable them to achieve their financial goals:

• Rectifying UDAAP Act;
• Transparency in CFPB Cost-Benefit Analysis Act;
• CFPB Commission Act;
• Ensuring Policymakers Consider the Cumulative Impact of Proposed Regulation;
• Ensuring the Effectiveness and Necessity of Regulations through Regular Lookbacks;
• Taking Account of Bureaucrats’ Spending (TABS) Act;
• CFPB-IG Reform Act; and
• Bank Loan Privacy Act.