The Washington PostDemocracy Dies in Darkness

Consumer Financial Protection Bureau isn’t out of the woods yet

Rep. Maxine Waters (D-Calif., ranking member on the House Financial Services Committee,  is a little sick of parrying Republican attacks on the CFPB.)

The two-and-a-half-year-old Consumer Financial Protection Bureau may finally have a confirmed director, but that doesn't mean Republicans are done throwing rocks at it.

The House debated (UPDATE: And passed, 232-182) a package of bills this afternoon that would replace the bureau's single director with a five-person commission, prevent it from collecting consumer credit card information, and make it easier for the Treasury's Financial Stability Oversight Council to overrule CFPB regulations. House Republicans have been trying to pass many of these things for years, which hobbled the fledgling agency's effectiveness by making it play defense even though they never became law.

Perhaps the most important component has to do with money: The legislation would change the CFPB's funding mechanism so that its budget comes from Congress rather than the Federal Reserve. It authorizes $300 million for each of the next two years, or about two-thirds of what the bureau has been spending annually. After that, there's nothing -- per the House Financial Services Committee's GOP majority and the Congressional Budget Office, it would save $5.4 billion over the next 10 years, which can only be true if the CFPB isn't funded at all. (GOP committee staff said later that the bill only saves that much "in the vernacular," and that they don't intend to zero out the bureau's budget entirely.)

Of course, it's almost certain the bill won't clear the Democratically-controlled Senate anyway, and the White House has already promised not to sign it. For that reason, one might see this as a purely political exercise, allowing a stream of GOP Congress members to inveigh against "perhaps the most powerful agency in government" (Rep. Patrick McHenry, N.C.) that's "disgracefully unaccountable to the American people" (Rep. Marlin Stutzman, Ind.) and proof that "big government is breathing down their backs" (Rep. Sean Duffy, Wis.).

The bureau's defenders rebutted most of their attacks -- the credit card data being collected can't be traced back to individual consumers, for example -- but occasionally just threw up their hands in exasperation.

"We could've saved a lot of trees and a lot of time if we had a bill that said 'end the Consumer Protection Bureau," said Rep. Denny Heck (D-Wash.), one of the few Democrats who lined up to oppose it. "We all know what the fate of it is going to be. And what is the opportunity cost of making that point? At least one opportunity cost is being able to work on actual regulatory relief."

So the CFPB is probably safe -- at least until the midterm elections. But the continued onslaught is evidence that it hasn't made as many friends as it might've hoped, even after delivering $3 billion to consumers in settlements over fraudulent practices by financial institutions, and helping thousands who called in to complain about mortgages, student loans, auto loans, payday lenders, and debt collectors. The bureau's leaders tried really, really hard to win over the community banks and credit unions, but their trade associations still spoke out in favor of the legislation that would render it essentially powerless, protesting that the CFPB's new requirements are still too onerous for smaller institutions to deal with.

That, plus backing from the big banks, is enough to keep the CFPB under fire -- even with more than 100 consumer groups trying to speak on its behalf.