Feb 9, 2017

The GOP plan to defund the CFPB

Steve Helber/AP

The creation of the Consumer Financial Protection Bureau is arguably the Obama administration's biggest achievement next to Obamacare, and the Republican Party has a plan to take it down.

Rep. Jeb Hensarling, the Republican Financial Services Committee Chair, writes in the Wall Street Journal Thursday morning that Congress and the president could defund the CFPB through budget reconciliation— eliminating the ability of the Federal Reserve to fund the agency over the heads of Congress — and crippling the agency without having to overcome a Democratic filibuster in the Senate.

Why it matters: The Trump Administration wants to reform financial regulation, but has offered few specifics on the CFPB, which says it has returned $11.7 billion in ill-gotten gains to 27 million consumers from financial services companies since its inception in 2011. Picking such a public fight with an agency that fights for consumers against banks may not be wise politics, so another strategy would be to replace the current head Richard Cordray with a less zealous regulator. Republicans have called on Trump to fire Cordray now before the expiration of his appointment in 2018, though whether the president has the authority to do so is up for debate.

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