Sen. Cruz Leads Efforts to Defund Consumer Financial Protection Bureau

Sen. Ted Cruz, R-Texas, who has tried several times in the past to eliminate the Consumer Financial Protection Bureau, is introducing legislation to defund the agency Democrats created after the 2008 financial crisis.

Cruz's legislation, planned for Wednesday, proposes that the amount of money that can be transferred from the Federal Reserve to the CFPB to be set at $0, reports The Wall Street Journal.

"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."

In the past, his legislation sought to repeal the measure that created the agency.

Cruz will be joined in his call against the CFPB by Senate Majority Whip John Barrasso, R-Wyo., and Sens. Mike Rounds, R-S.D.; Steve Daines, R-Mont.; Marsha Blackburn, R-Tenn.; and Rick Scott, R-Fla.

The bureau has considerable powers, including the authority to create and enforce rules tied to consumer financial products such as credit cards and mortgages.

Democrats back the bureau as a protective measure against abusive banking practices, while Republicans say it lacks accountability while meddling too much in the financial industry.

As money is appropriated for the bureau's operations from the Federal Reserve and not through Congress, it is not ordinarily subjected to pressures from lawmakers.

Even though Republicans controlled both chambers of Congress during the first two years of President Donald Trump's first term in office, they could not end the CFPB.

Cruz's office believes this time around is different because the proposed legislation can be pushed through under budget reconciliation, which will bypass the Senate's usual 60-vote requirement for most bills, a source close to him said.

To use budget reconciliation, changes must be both fiscal and have a significant impact on the budget. The CFPB may be off-limits since it is not funded through congressional appropriation.

The Supreme Court last year rejected a push to dismantle the bureau with a ruling that said Congress had the authority, when it was formed, to insulate its funding from political interference.

The court agreed with another challenge in 2020, ruling that the Constitution allows a president to remove the CFPB's bureau director at will rather than only for cause during that person's five-year term in office.

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