Republicans Blast CFPB as Democrats Praise It During Two Days of Hearings
CFPB Director Chopra testifies before House, Senate committees
In two days of hearings on Capitol Hill this week, Republicans and Democrats once again painted vastly different pictures of the Consumer Financial Protection Bureau. To Republicans, the agency led by Director Rohit Chopra, is an out-of-control arm of President Biden’s reelection campaign. To Democrats, the bureau is the champion of consumers.
On Wednesday, Chopra presented his semi-annual report of the bureau at a hearing of the Senate Banking Committee. “Most people don’t have fancy lawyers and high-priced lobbyists to fight for them,” Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, said, as he opened Wednesday’s hearing. “The CFPB works on behalf of everyone else, fighting for their rights and their hard-earned money.”
On the other side, committee ranking Republican Sen. Tim Scott of South Carolina summed up Republicans’ opinion of the agency, telling Chopra, “You have consistently abused your authority.”
Scott and other Republicans criticized the CFPB’s efforts to eliminate or cut so-called “junk fees” and to limit the use of medical debt in credit reports. “Time after time, your agency brushes aside congressional concerns, forges ahead with political agendas, and pushes well past the boundaries of its authority,” Scott said. “I will say that listening to Chairman Brown’s comments, it sounds like we’re talking about two completely different agencies.”
Although the U.S. Supreme Court recently found the CFPB’s funding mechanism constitutional, Sen. John Kennedy, R-La., said the agency’s funding still is illegal. He stated that the bureau is funded through the “combined earnings” of the Federal Reserve system, adding that the Fed has not had combined earnings since September 2022. “You’ve been operating illegally,” Kennedy said. He added that the Dodd-Frank Act that created the bureau did not say the agency is funded through revenue from the Fed - it said earnings.
For his part, Chopra said he believe the bureau has done a stellar job of protecting the interests of consumers. “Since its creation, the CFPB has returned $20.7 billion to consumers through law enforcement activity and created unquantifiable returns for the over 205 million Americans and honest businesses harmed by the illegal practices that we have stopped,” he told the Banking Committee. “We are currently on track to save customers $20 billion in junk fees every year. We also expect to process over two million complaints this year.”
Thursday’s House hearing played out in a similar way, with Republicans attacking the agency and Chopra and Democrats applauding the agency’s work.
Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C., said even though the Supreme Court found the agency’s funding mechanism constitutional, Republicans still believe that the agency should be subject to the appropriations process. “Republicans have a legislative solution to make the bureau more transparent and accountable to the American people,” he said. “This is something we should all be in favor of.” He told Chopra his “so-called independent agency has become an arm of President Biden’s political operation.”
Committee ranking Democrat Rep. Maxine Waters of California applauded Chopra’s work. She said, “Under the leadership of Director Chopra, the CFPB is combatting excessive and illegal junk fees, fighting against housing discrimination and redlining, and holding megabanks accountable for breaking the law and harming consumers.”