What is the CFPB and Why are the Republicans Out to Destroy It?

The Consumer Financial Protection Bureau (CFPB) is a regulatory agency of the United States government that is responsible for consumer protection in the financial sector. The CFPB was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in response to the 2008 financial crisis, which highlighted the need for stronger consumer financial protections. The CFPB's mission is to make markets for consumer financial products and services work for Americans, whether they are applying for a mortgage, choosing among credit cards, or opening a savings account or a CD. The agency enforces federal consumer financial laws and regulations, educates consumers about financial products and services, and monitors the financial marketplace for abusive and fraudulent practices.

In a country where so many consumers from all walks of life are vulnerable to financial predators, the CFPB serves an important role in protecting consumers from abusive and predatory practices in the financial industry. Its actions have helped to level the playing field for ordinary Americans who might otherwise be at a disadvantage in dealing with financial institutions.

Nevertheless, some Republicans have expressed opposition to the CFPB and have advocated for changes to its structure or even its elimination. They believe that it has too much power and is unaccountable to Congress or other elected officials. They also argue that the CFPB's broad mandate and enforcement authority can stifle innovation and limit access to credit.

Republicans' efforts to derail the CFPB have focused on legal challenges. They argued in 2020 that the CFPB, which is headed by a single director who can only be removed for cause, lacks sufficient oversight and transparency, and the Supreme Court ruled that the bureau’s director could not be insulated from executive oversight. More recently, in October of 2022, a panel of three Trump-appointed judges from the Fifth Circuit Court of Appeals ruled that the CFPB’s funding mechanism violates the Appropriations clause in the Constitution. The Supreme Court has agreed to take the case, and John Roberts is clearly sympathetic to the Republicans’ position here.

It certainly seems that the CFPB’s days as an organization with any sort of power are numbered.