WASHINGTON–The stark differences between Republicans and Democrats when it comes to the Consumer Financial Protection Bureau were readily apparent in opening statements to a House hearing here and then in the debate that followed.

During the hearing members of the two parties consistently took opposing positions on the Bureau, with Democrats saying the CFPB protects consumers from financial predators and a Republican saying it is the CFPB itself that is the “predator.” Democrats lauded the money that has been returned to consumers after being scammed, and Republicans slammed the costs the CFPB has created for businesses, including credit unions. 

The hearing, held by the Financial Institutions Subcommittee of the House Financial Services Committee,included testimony by a credit union representative (see related story) and was titled “A New Era for the CFPB: Balancing Power and Reprioritizing Consumer Protections.”

‘Never More Evident’

In opening the hearing, Subcommittee Chairman Rep. Andy Barr (KY-06)  said the “costs of burdensome overregulation” from government has never been more evident than at the Consumer Financial Protection Bureau, which became the most unchecked and unaccountable agency in the entire federal government.”

Barr criticized former CFPB Director Rohit Chopra, who was fired by President Trump, on several occasions and said the agency was motivated by politics and not “sound policy.”

‘Structural Flaws’

“Abuses like those under Director Chopra stem from significant structural flaws at the CFPB, which reduce accountability and lead to regulatory swings that stifle innovation and competition Republicans have long called for reforms to ensure the Bureau is accountable to the American people,” said Barr. 

Barr said he will be proposing legislation to change the CFPB leadership structure from a single individual to a panel—which credit unions support—and to also bring it under the congressional appropriations process.

Barr also pointed to two areas where he said the “CFPB has abused its power and threatened, not helped, consumers.”

Two Ares of Focus

According to Barr, those two areas include:

• The “abuse” of civil investigative demands” (CIDs), which he said “forced law-abiding financial services providers to sift through thousands of pages of business documents and sit for hours of oral testimony without specifying alleged wrongdoing, just hoping to find something. These fishing expeditions were designed to litigate companies into bankruptcy or destroy their reputations, doing nothing to protect consumers but harming them by eliminating products and services from the market.
• The second issue cited by Barr was the scope and process surrounding the Bureau’s UDAAP authority, which he said was undefined under director Chopra and was “abusive. This lack of guidance gives institutions no clarity on how to comply.” Barr said he plans to introduce a bill to define abusiveness under UDAAP and to “inject clarity and certainty.”

The Opposite View

Offering an opposing view was Dr. Bill Foster (D-IL), the ranking member on the subcommittee, who on several occasions said what has happened at the CFPB, where an executive order from President Trump has all but shut down the agency, are examples of Elon Musk and the Department of Government Efficiency (DOGE) creating havoc.

“DOGE employees raided the Bureau’s headquarters and CFPB employees were told to stop all work. Hundreds were let go. Its contracts were cancelled, Lawsuits brought by the agency against bad actors were summarily dropped. Even the Bureau’s name was ripped from the building,” said Foster. “These are not reforms. They are illegal attacks on the CFPB’s congressionally mandated existence and also attacks on the dedicated civil servants that fight every day to protect consumers and hold big financial firms accountable, In fact, this hearing today discussing tweaks to the CFPB policies, feels a bit like Republicans rearranging the deck chairs on the Lusitania after they torpedoed it.”

‘Terrified Families’

Foster referenced the era of the 2008 financial crisis and “terrified families” that had been bankrupted by bad mortgages, unfair credit card agreements and other bad practices, which led to creation of the Bureau.

Foster noted the CFPB has returned more than $21 billion to victims of scammers, including $363 million to members of the military, something he said will no longer happen.

“After the DOGE raid on the CFPB, Bureau employees were informed that new leadership intends to turn the CFPB into a single room with quote, ‘Five men and a telephone.’ That is not Congress’s intent,” Foster said. 

Foster said he believes everyone agrees non-bank fintechs and other provides should face similar regulatory requirements as banks and credit unions if they offer similar services, “but with the CFPB shutdown that’s not going to happen.

‘Open Season’

“The CFPB was the only cop on the beat for consumers and without it, it will once again be open season for scammers praying on hard-working American families,” Foster continued. “Big tech companies will have a free reign to invade the regulated financial system without accountability, while banks and credit unions continue to be highly regulated.”

GOP Responds

Following Foster’s statement, Barr said the real “predator” and” Orwellian threat” is the CFPB. He also said the Bureau collected unnecessary data around what he called the “DEI cancer.”

Other GOP members of the committee also made similar statements during their comments.