Bills have been introduced in both the House of Representatives and Senate this week that would defund the Consumer Financial Protection Bureau and Republicans are reportedly looking to use a special procedure that would allow the bill to pass with just a simple majority in the Senate.
Driving the news:
- Sen. Ted Cruz [R-Texas] introduced the Defund the CFPB Act in the Senate, which would effectively set the agency’s budget at zero by cutting off its funding from the Federal Reserve.
- The legislation is co-sponsored by Sen. John Barrasso [R-Wyo.], Sen. Rick Scott [R-Fla.], Sen. Steve Daines [R-Mont.], Sen. Marsha Blackburn [R-Tenn.], Sen. Mike Rounds [R-S.D.], and Sen. Mike Lee [R-Utah].
- Rep. Keith Self [R-Texas] introduced a companion bill in the House.
- Key industry groups such as the Texas Credit Union Association, Texas Bankers Association, and Heritage Action have signaled their support.
Context:
- The CFPB’s funding mechanism has long drawn fire from Republicans because it bypasses the appropriations process, making it less susceptible to political pressure.
- Sen. Cruz argues the bureau has harmed American financial institutions and taxpayers, calling it “an unchecked Obama-era executive arm.”
- Republicans may try to advance the bill via budget reconciliation, which needs only a simple majority to pass in the Senate, thereby sidestepping the usual 60-vote threshold, according to published reports.
Tell me how you really feel: This is not the first time that Sen. Cruz has attempted to get rid of the CFPB. Back in 2023, he introduced a bill that would abolish the Bureau, but it didn’t make it very far under the Biden administration. This latest attempt is similar in its objective, but is taking a different route, attempting to use the budget reconciliation process, which is intended to deal with fiscal issues.
What to watch:
- If the Senate parliamentarian deems the measure eligible for reconciliation, the bill could move swiftly.
- A previous Supreme Court challenge upheld Congress’s right to fund the bureau outside its usual appropriations stream, but the current Republican majority appears intent on altering that structure.
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