House Republicans are introducing new legislation, the Consumer Financial Protection Accountability and Reform Act of 2026, aimed at significantly reforming the Consumer Financial Protection Bureau (CFPB). This bill, sponsored by Rep. Andy Barr (R-KY), seeks to put the CFPB under the regular congressional appropriations process, rather than its current funding mechanism through the Federal Reserve. Republicans argue this change is necessary to restore democratic accountability to an agency they perceive as having excessive power. This legislative push follows prior attempts by the Trump administration to dismantle the agency and reflects a continued effort by conservatives to rein in its authority.
Key provisions of the proposed bill include establishing an independent CFPB inspector general, distinct from the Fed's inspector general, who would report to Congress semiannually. The legislation also mandates that all CFPB rulemaking include a detailed justification, a cost-benefit analysis of direct and indirect costs, and exploration of alternative approaches. Furthermore, the bill proposes raising the asset threshold for CFPB supervision of banks and other entities from $10 billion to $30 billion, indexed to nominal GDP growth. Institutions below this new $30 billion threshold would primarily fall under the sole authority of prudential regulators, although the CFPB could still refer enforcement actions and require limited reports.
This legislative effort builds on a history of Republican attempts to weaken the CFPB. During the Trump administration, the agency adopted a more lenient enforcement stance, reportedly abandoning over three dozen investigations and settlements, which allowed businesses to retain millions they had previously agreed to refund consumers. For example, Toyota reportedly saved approximately $40 million in customer refunds when a settlement was ended early. Former acting CFPB Director Russell Vought had previously advised Republicans on how to craft legislation to dismantle the agency's authority, advocating for congressional appropriations and raising the supervisory threshold to $21 billion from $10 billion. These administrative actions, however, were seen by Republicans as insufficient and easily reversible, leading them to seek permanent statutory changes.
The bill has garnered more than two dozen Republican cosponsors but no Democratic support, highlighting the partisan divide over the agency's role and structure. Proponents, like Rep. Barr, argue that durable legislative changes are necessary to prevent the agency's policies from fluctuating wildly between administrations. They emphasize that subjecting the CFPB to congressional oversight will ensure greater accountability and prevent the perceived "cavalier attitude" that Vought attributed to its independent funding structure. Democrats, conversely, have criticized efforts to curb the CFPB's power, arguing that a robust agency is essential for consumer protection.
