October 1, 2025
Highlights:
The unchecked expansion of government bureaucracy often leads to mission creep, where agencies stray far from their original intent. In Washington, few agencies exemplify the dangers of government bureaucracy quite like the Consumer Financial Protection Bureau (CFPB). After its creation in 2010, the authority Congress granted to the CFPB quickly morphed into a tool for partisan agendas, imposing burdensome rules that stifle innovation and economic freedom. During the Biden administration, CFPB bureaucrats pursued aggressive policies that often exceeded their legal bounds, targeting everything from overdraft fees to credit card late fee penalties with little regard for market realities or consumer choice. Today, under President Trump, we’re seeing encouraging steps to rein in this overreach. Lasting change, however, will require congressional action to depoliticize the agency once and for all.
The CFPB’s single-director structure, combined with vague authorities, has made it a political football. During the Biden years, the agency ramped up enforcement on so-called “junk fees,” issuing rules that critics argued ignored data showing banks had already slashed overdraft charges by over 50% through market competition alone. These interventions not only disregarded statutory limits but also drove low-income Americans toward riskier alternatives like payday loans, all while increasing costs for responsible borrowers.
After taking office, President Trump’s administration moved swiftly to curtail these excesses. Acting Director Russ Vought halted most agency activities early on, focusing instead on core priorities and reductions in force. The CFPB has withdrawn proposed regulations on bank data-sharing and credit card late fees, narrowed nonbank supervision to “serious conduct,” and even cut funding via the Working Families Tax Cut Act, slashing the bureau’s budget from 12% to 6.5% of the Federal Reserve’s allocation. Further, the Administration’s rulemaking agenda is heading towards deregulation, including reconsidering the open banking rule under Section 1033 and putting a stay on the Small Business Lending Rule.
Yet administrative fixes are temporary. Without structural reforms, a future administration could easily reverse course, perpetuating the cycle of uncertainty that hampers business investment and economic growth.
To truly depoliticize the CFPB, Congress must enact legislation that curbs its expansive powers and introduces checks on bureaucratic whims. One critical area is clarifying the bureau’s Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) authority, which has been wielded subjectively to expand oversight without clear boundaries. The Rectifying UDAAP Act (H.R. 1652), introduced in February 2025 by Rep. Andy Barr, would define “abusive” more precisely, requiring intentional harm that’s not reasonably avoidable and lacks countervailing benefits, while mandating cost-benefit analyses and limiting penalties for good-faith compliance efforts.
Equally important is enhancing transparency in the rulemaking process. The Transparency in CFPB Cost-Benefit Analysis Act (H.R. 2331) would require the bureau to publish detailed assessments of proposed rules’ impacts, including costs, benefits, and effects on small businesses and financial inclusion. The CFPB would be required to consider cumulative regulatory burdens of rules, ensuring they do not inadvertently punish consumers or stifle competition.
Finally, replacing the single director with a bipartisan commission would insulate the agency from partisan swings, similar to the FTC or SEC. Congress should also prioritize regular retrospective reviews of major rules, sunsetting ineffective ones after 5-10 years, to prevent regulatory creep that burdens the economy without delivering benefits.
These reforms aren’t about dismantling oversight but about restoring balance: limiting government intrusion, promoting free enterprise, and ensuring regulations are evidence-based rather than ideologically driven. In an economy where excessive regulation costs jobs and raises prices, depoliticizing the CFPB is a conservative imperative. It protects taxpayers from wasteful spending and empowers markets to serve consumers effectively.
With Republicans in unified control in Washington, it is crucial that the CFPB’s overreach be reined in legislatively. If Congress can lock in fundamental reforms, it can establish a regulatory environment that prioritizes freedom, accountability, and prosperity for all Americans.