The Consumer Financial Protection Bureau (CFPB) celebrated its fourth birthday on July 21. As a present, two Texas congressmen introduced a bill to abolish the federal agency, one of whom was U.S. Senator Ted Cruz (R).
Cruz, along with Representative John Ratcliffe (R-Texas-04) introduced legislation to eliminate the CFPB, saying that the agency, like the Dodd-Frank legislation that created it, is just another example of the “cronyism that infects” Washington, D.C., according to a joint-statement from Cruz’s and Ratcliffe’s offices.
The congressmen claim that the CFPB has had the opposite effect from what it was originally intended to do, stating that now five years after the passage of Dodd-Frank, big banks have only become bigger and the number of smaller banks have only decreased.
“Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumers,” said Cruz in a written statement. “The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether.”
Ratcliffe cites stories from community banks in Texas having to choose between closing their doors or consolidating into larger institutions to handle compliance costs set forth by the CFPB.
“The CFPB’s regulatory zeal has stripped American consumers and businesses of their freedom of choice and has limited their access to capital—all in the name of a ‘we know best’ attitude from Washington,” stated Rep. Ratcliffe.
The CFPB has ofttimes come under fire from lawmakers and the financial services industry for a variety of reasons, whether due to arguably stringent regulations, enforcement actions, or the fact that the agency is not subject to the congressional appropriations process for its budget.
Several bills have already been introduced this year alone in efforts to bring more accountability to the CFPB. And now, Cruz’s and Ratcliffe’s legislation joins the pool of lawmakers who press that the CFPB has indeed gone “rogue.” None, however, have made any significant progress.
“While there’s much more to do to scale back the harmful regulatory impositions of Dodd-Frank, this legislation takes a critical step in the right direction,” Cruz stated. “So today let’s celebrate the CFPB’s fourth and final anniversary.”
Written by Jason Oliva