Toomey: CFPB’s Unconstitutional Structure Has Left It Unaccountable

Consumer Financial Protection Bureau (CFPB)

U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) and Senator Bill Hagerty (R-Tenn.) yesterday introduced the CFPB Stability Act to make the Consumer Financial Protection Bureau (CFPB) accountable to Congress and the American people. The legislation will reform the agency’s unconstitutional funding structure by subjecting it to congressional appropriations. It would also replace the agency’s single director with a bipartisan five-member commission—an idea previously endorsed by Democrats and Republicans.

“Under Director Chopra, the CFPB is more out of control than ever,” said Sen. Toomey. “The CFPB Stability Act will make the agency constitutional and accountable to Congress and the American people by subjecting it to congressional appropriations and converting it into a bipartisan, multi-member commission just like the FDIC and SEC.”

In his opening statement at yesterday’s semi-annual CFPB oversight hearing at the Senate Banking Committee, Senator Toomey suggested a possible path forward for fixing constitutional infirmities with the CFPB in light of a recent court decision. He also reiterated his concern about the current director’s pursuit of a far-left political agenda. Pointing to the Fifth Circuit’s decision that found the CFPB’s funding structure to be an unconstitutional violation of the Appropriations Clause, Senator Toomey observed that the agency abuses its power because it knows Congress cannot currently use the power of the purse to rein in its overreach. He cited the CFPB unilaterally changing its interpretation of unfair, deceptive, or abusive acts or practices (UDAAP) without rulemaking, and the agency’s pattern of using abusive name-and-shame tactics against lawful businesses.

The CFPB Stability Act will address these concerns by making the CFPB’s funding accountable to Congress through appropriations, and by replacing the agency’s single director with a five-member, bipartisan commission, similar to structures at numerous other government boards, including the SEC, FDIC, FCC, and FEC. Making the CFPB a commission is a well-established bipartisan idea, as members of both parties have repeatedly cosponsored legislation to convert the CFPB into a commission.

Senator Toomey is urging his colleagues to support this legislation to ensure a smooth transition in the event that the U.S. Supreme Court upholds the Fifth Circuit’s ruling on the unconstitutionality of the agency’s current funding structure.

To read the full text of the bill, click here.

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