Senator Ted Cruz of Texas and Representative Byron Donalds of Florida are introducing a bill to eliminate the Consumer Financial Protection Bureau (CFPB) and repeal the Consumer Financial Protection Act, according to an exclusive report.
This act established the agency in 2010 as a financial watchdog after the 2008 Great Recession. According to the lawmakers, the CFPB is an unnecessary agency that hinders economic growth by enforcing burdensome and unnecessary economic regulations. They believe that ending the CFPB will spur economic growth at a time when Texans and Americans need it the most.
Cruz, the ranking member of the Senate Commerce Committee, has attempted to repeal the CFPB since 2015 and is leading this latest effort. He says the CFPB is ineffective and does very little to protect consumers. He describes the CFPB as a sham, Obama-mandated organization that stifles economic growth by enforcing unnecessary financial regulations.
Donalds agrees with Cruz's stance on the CFPB, describing the agency as unaccountable, unconstitutional, and overreaching. He believes the CFPB hinders economic prosperity by imposing burdensome and unnecessary regulations on American consumers.
He adds that it's high time to eliminate the CFPB and ease the overarching financial restraints established by Dodd-Frank that permitted unfettered power to unelected activists and the obstruction of fiscal ingenuity and growth.
The CFPB consolidated consumer financial protection authorities across seven federal agencies into one. It was designed to increase accountability in government and establish effective rules for and oversee the whole market.
The CFPB believes that consumer financial protection had not been the primary focus of any federal agency, and no agency had practical tools to set the rules. This resulted in a system without effective rules or consistent enforcement, leading to the 2008 financial crisis and its aftermath.
The bill to eliminate the CFPB has gained support from several Republican senators, including Mike Lee of Utah, Kevin Cramer of North Dakota, John Barrasso of Wyoming, and Rand Paul of Kentucky. They believe the CFPB is a swampy, unaccountable, and unconstitutional government agency that hinders economic growth.
However, the CFPB has faced legal challenges regarding its constitutionality. In February, the Supreme Court agreed to hear arguments about the agency's constitutionality. Last year, the U.S. Court of Appeals for the 5th Circuit ruled that the agency's funding structure was unconstitutional since Congress delegates its appropriations power to the CFPB, violating the Constitution's separation of powers clause. Oral arguments for the case are expected to occur in the fall, with a decision expected in 2024.
Several Republican lawmakers, including Senator Ted Cruz and Representative Byron Donalds, are championing the elimination of the Consumer Financial Protection Bureau. They believe the agency is unnecessary and hinders economic growth by enforcing burdensome and unnecessary economic regulations.
The CFPB was founded after the 2008 Great Recession to serve as a financial watchdog, consolidate consumer financial protection authorities, and increase accountability in government. However, legal challenges regarding its constitutionality have arisen, and the Supreme Court is set to hear arguments on the matter later this year.
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