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Texas Senator Ted Cruz is launching a fresh attempt to dismantle the Consumer Financial Protection Bureau through new legislation aimed at cutting off its funding source.
The Republican lawmaker plans to introduce a bill Wednesday that would effectively defund the agency by setting its Federal Reserve funding allocation to zero, marking his latest effort to target the organization established by Democrats following the 2008 financial crisis.
“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions,” Cruz said in a statement. “It is an unchecked Obama-era executive arm, and the Federal Reserve should not be transferring funds to it. Enacting this legislation would save American taxpayers billions of dollars, and I call on the Senate to expeditiously take it up and pass it.”
BREAKING: Texas Senator Ted Cruz is leading an effort to defund the Consumer Financial Protection Bureau.
Via: Wall Street Journal pic.twitter.com/SzvW86K9Kb
— Ian Jaeger (@IanJaeger29) January 29, 2025
The initiative has garnered support from several Republican colleagues, including Senate Majority Whip John Barrasso of Wyoming, along with Senators Mike Rounds of South Dakota, Steve Daines of Montana, Marsha Blackburn of Tennessee, and Rick Scott of Florida.
The CFPB, which wields significant authority over consumer financial products like credit cards and mortgages, has long been a point of contention between political parties. While Democrats champion it as a crucial safeguard against predatory banking practices, Republicans argue it operates with insufficient oversight while excessively interfering in financial sector operations.
The bureau’s unique funding structure, receiving appropriations directly from the Federal Reserve rather than through Congress, has historically shielded it from legislative pressure. This arrangement persisted even during the Republican-controlled Congress of President Trump’s early term, when previous attempts to eliminate the agency proved unsuccessful.
Cruz to revive push to abolish government consumer protection agency
“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions…"https://t.co/VUDKI2yBQM
— Macarena Martinez (@macamrtz) January 29, 2025
Sources close to Cruz suggest this attempt might differ due to the potential use of budget reconciliation, which could circumvent the Senate’s typical 60-vote threshold. However, this strategy faces potential hurdles as reconciliation requires changes to be primarily fiscal and significantly impact the budget. The CFPB’s independent funding structure might place it beyond the reach of this legislative mechanism.
Recent legal challenges to the bureau have met mixed results. While the Supreme Court ruled last year to uphold Congress’s authority to protect the bureau’s funding from political interference, a 2020 decision did grant presidents the power to remove the CFPB director at will, rather than only for cause during their five-year term.