House Republicans are advocating for significant changes to the Consumer Financial Protection Bureau (CFPB) through new legislation titled the Consumer Financial Protection Accountability and Reform Act of 2026. This bill aims to bring the CFPB under regular congressional appropriations, a move that would grant Congress direct control over its funding, unlike its current funding mechanism through the Federal Reserve. Proponents of the reform argue that this change would enhance the agency's accountability and prevent its policies from fluctuating drastically between administrations.
The proposed legislation, spearheaded by Rep. Andy Barr (R-KY), includes several other key reforms. It seeks to raise the asset threshold for CFPB supervision of banks and other financial entities from $10 billion to $30 billion, with this threshold indexed to nominal gross domestic product moving forward. This change would grant prudential regulators sole authority over financial institutions below the $30 billion mark, though the CFPB could still refer enforcement actions and request limited reports. Furthermore, the bill would establish an independent CFPB inspector general, replacing the current oversight by the Fed's inspector general, to provide direct and independent scrutiny of the bureau's operations.
Additional reforms in the bill mandate that all CFPB rulemaking include a clear justification for proposed rules, a comprehensive cost-benefit analysis of both direct and indirect costs and benefits, and an exploration of potential alternatives. Supporters, such as Kathy Kraninger, former CFPB director and current president and CEO of the Florida Bankers Association, assert that these measures will not weaken the bureau but instead strengthen public confidence through robust oversight. Despite attracting more than two dozen cosponsors, the legislation lacks Democratic support, highlighting the partisan divide over the CFPB's structure and authority. Republicans have consistently argued that the CFPB, created in the wake of the 2008 financial crisis through the Dodd-Frank Act, holds too much power and requires greater democratic accountability.
