CFPB Acting Director calls for Congressional funding mechanism

Consumer Financial Protection Bureau Acting Director Russell Vought sees the agency he leads as broken and in need of facing the Congressional appropriations process. .Vought outlined his support for overhauling the CFPB’s funding from a standalone agency July 15 during an at-times intense three-hour testimony before the House Financial Services Committee. “The bureau remains structurally defective,” he said. “It should not exist in its current form.” Vought is expected to soon step aside from his position pending Jeff Johnson’s approval as CFPB director. President Donald Trump nominated the financial executive to the position last month. Under Vought’s watch, the CFPB paused nearly all enforcement work. He also implemented a significant reduction-in-force that eliminated most staff, an action which has faced litigation. Republicans on the committee said the bureau had operated as an overreaching, partisan regulatory agency before Vought became acting director, especially under Rohit Chopra, who oversaw the CFPB during former President Joe Biden. House Financial Services Committee Chair French Hill (R-Ark.) said community banks faced increased compliance burdens under the CFPB that have made their operations unnecessarily challenging.Hill said the CFPB under Trump has become more accountable and focused on protecting consumers from harm. He expressed concern that a future director could reverse Vought’s actions and cause a rapid policy swing. Vought cited the bureau’s ‘humility pledge’, a mandated script examiners read to supervised institutions that includes the promise of shorter, more narrowly-focused examinations and a collaborative approach. Democrats on the committee aggressively challenged Vought. They described Vought as dismantling the top consumer protection enforcement mechanism while protecting the largest financial companies. They sometimes used personal terms to describe their displeasure. “The only person successful in defunding the police is you,” said Rep. Brad Sherman (D-Calif.), contrasting Vought’s action with Republican criticisms of some Democrats as supporting defunding law enforcement officers. “You have defunded the police that protect us from crime in the suites while railing against crime in the streets. Americans need to be protected from both.” “You are defunding the police and you are breaking the law to do it,” added Ranking Member Maxine Waters (D-Calif.). Committee Democrats also accused Vought of deleting institutional CFPB press releases, enforcement action records and other information before Trump’s second term from the website, an assertion Vought denied. He said the bureau placed previous documents into an archived section of the CFPB website. In June, the bureau suggested creditors can consider a loan applicant’s immigration status when deciding whether the person can repay the loan. Rep. Nydia Velazquez (D-N.Y.) decried the announcement, calling it “outrageous” and “insulting.” “What is the point? Cruelty,” she said. Republicans cited a report earlier this year from the White House Council of Economic Advisors finding the bureau has cost the public between $275 billion- $300 billion. Committee Democrats cited a study finding the CFPB returned $21 billion to victims. Rep. Pete Sessions (R-Texas) said Section 1071 of the Dodd-Frank Act caused banks to no longer want to offer loans because of the overly-burdensome process in collecting dozens of applicant data points. Vought’s call for CFPB Congressional appropriation was not the only call for a change to the bureau’s leadership format. Rep. Bill Huizenga (R-Mich.) cited a bill he introduced to reform the CFPB into being run by a bipartisan five-member commission, instead of its single director model.