Leaked Memo Provides Details for Dramatically Curbing Power of CFPB

A leaked memo from the chairman of the House Financial Services Committee details how it will move forward to reduce the power of the Consumer Financial Protection Bureau, according to a published report.

The plan would include legislation that would limit the bureau’s enforcement authority, reduce its ability to make rules, and repeal the consumer complaint system. The memo was reportedly drafted by Rep. Jeb Hensarling [R-Texas], chairman of the House Financial Services Committee and a longtime critic of the CFPB and its director, Richard Cordray.

The report does not include any comment from the CFPB or Cordray.

The legislation would be part of President Trump’s plan to overhaul the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things, led to the creation of the CFPB.

All of the financial services industry is anxiously waiting to see what President Trump will do with the CFPB. A recent Appeals Court ruling declared the leadership structure of the CFPB to be unconstitutional and its remedy was to allow the president to fire the director for any reason. Cordray has vowed to stay at the CFPB until his term expires in 2018. Republicans have been calling for President Trump to fire Cordray while Democrats have been lobbying to keep that from happening. There are legal and political questions that muddy the waters for a decision to be made.

Earlier this week, Rep. Hensarling called for the abolishment of he CFPB in an editorial in the Wall Street Journal, saying the agency has “eroded freedom, trampled due process, and killed jobs.”

The published report added a cherry onto the top of sundae should President Trump and the House Financial Services Committee move forward with their plans. It would be a slap in the face to Sen. Elizabeth Warren [D-Mass.], a vocal critic of the commander-in-chief who was instrumental in the creation of the CFPB.