According to a Bloomberg report, the Trump administration is considering tapping the Office of Management and Budget (OMB) or the U.S. Department of the Treasury to oversee daily functions of the Consumer Financial Protection Bureau (CFPB).
News of the Treasury/OMB oversight comes as U.S. Sen. Ted Cruz has introduced the Defund the CFPB Act, which would zero out transfer payments from the Federal Reserve to the CFPB.
“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions,” said Sen. Cruz. “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.”
The CFPB was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in the wake of the financial crisis of 2007-2008. The role of the CFPB is to review the practices of companies, banks, and lenders in the financial services industry and work to protect consumers from predatory practices. Authorized by Congress in 2010, the role of the CFPB is to reform predatory and deceptive financial industry practices that policymakers believed led to a wave of mortgage defaults, and ultimately to the crisis and subsequent Great Recession.
The CFPB declined comment, directing MortgagePoint to recent public comments by CFPB Director Rohit Chopra.
In discussing the future of the CFPB on a recent edition of CNBC’s Squawk Box, Chopra said, “I understand and recognize that the President has the right to put into place, a new nominee, a new Director of the CFPB. Until that time, I am discharging my oath to serve my term, and we are very, very busy.”
In terms of the new CFPB oversight, Scott Bessent was confirmed earlier this week as head of the U.S. Department of the Treasury, and Russell Vought is awaiting Senate confirmation to oversee the OMB.
Sen. Cruz’s Defund the CFPB Act is co-sponsored by Sens. John Barrasso, Rick Scott, Steve Daines, Marsha Blackburn, Mike Rounds, and Mike Lee. Rep. Keith Self has introduced companion legislation to Cruz’s measure in the House of Representatives.
MortgagePoint also reached out to the White House and Treasury but had not heard back as of this posting.
To read the full release, click here.
