House Republicans have introduced new legislation, the Consumer Financial Protection Accountability and Reform Act of 2026, targeting reforms for the Consumer Financial Protection Bureau (CFPB). This agency, created in the wake of the 2008 financial crisis through the Dodd-Frank Act, has long been a subject of contention for Wall Street and conservatives. The bill, sponsored by Rep. Andy Barr (R-KY) and co-sponsored by over two dozen Republicans, seeks to address what they perceive as the CFPB's excessive power and lack of accountability.
Key provisions of the bill include subjecting the CFPB to the regular congressional appropriations process, moving it away from its current funding mechanism via the Federal Reserve. This change would allow Congress to exert more control over the agency's budget. Additionally, the legislation proposes establishing an independent CFPB inspector general, distinct from the Fed's inspector general, who would provide semiannual testimony to congressional committees. Republicans argue that these measures will bring greater accountability and predictability to the CFPB.
The proposed reforms also aim to alter the CFPB's regulatory and enforcement powers. The bill would mandate that all CFPB rulemaking include a justification, a cost-benefit analysis, and an exploration of potential alternatives. It would also increase the asset threshold for CFPB supervision of banks and other entities from $10 billion to $30 billion, indexed to nominal gross domestic product moving forward. This would grant prudential regulators sole authority over financial institutions below the $30 billion threshold, while the CFPB could still refer enforcement actions and request limited reports.
Proponents of the bill, such as former CFPB Director Kathy Kraninger and current Florida Bankers Association president, argue that these changes would strengthen confidence in the agency through independent oversight, rather than weaken it. Rep. Barr emphasized that the legislation would place an "extraordinarily powerful agency back under democratic accountability," making reforms durable by writing them into law, in contrast to administrative actions that can be easily reversed by future administrations. This comes after previous attempts by the Trump administration to dismantle the agency and Republican efforts to curb its power, including capping its funding at $446 million for fiscal year 2025, down from $785.4 million in fiscal year 2024.
