CFPB Reform

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CFPB Reform

Reforming the CFPB
to Better Serve Consumers

Congress should reset the Consumer Financial Protection Bureau (CFPB) into a credible, durable, and apolitical regulator that follows the law, sets consistent rules, and provides the stability that consumers and markets depend on. Getting that right will determine whether consumers are better served — or left with fewer options, higher costs, and a system that falls short of its mission.

The Problem

The Problem Is Not One Rule. It's the Whiplash.

The CFPB's history shows a recurring pattern: rules are proposed, finalized, paused, litigated, rescinded, or erased depending on who controls Washington. That instability doesn't serve consumers, banks, nonbanks, or the Bureau itself.

Without reform, the cycle continues.

The next CFPB can reverse the last CFPB. The CFPB after that can reverse it again. Administrative corrections address symptoms. Only legislation fixes the structure.

The CFPB's single-director model, lack of cost-benefit requirements, and funding outside Congressional appropriations remain unchanged and will produce the same volatility until Congress acts.

The life of a CFPB rule Three outer bubbles on a circular ring: Proposed top right, Rescinded top left, Finalized bottom center. Court Challenge sits outside bottom left. Inner dashed ring shows the guidance shortcut cycle with Issued, Burden, and Withdrawn bubbles. Each bubble can be selected to view details. THE LIFE OF A CFPB RULE GUIDANCE SHORTCUT The structure never changes. Congress must act. THE CYCLE RESETS New admin, new approach Proposed NPRM published 60–90 day comment Finalized Rule takes effect Compliance begins Rescinded Withdrawn or repealed via CRA Issued No APA process Burden Industry adjusts Withdrawn Standard gone Court challenge Full rulemaking (years) Guidance shortcut (months) Reset — new admin
Select a stage on the diagram.
Outer ring — Rulemaking
Proposed
A Notice of Proposed Rulemaking is published in the Federal Register. A public comment period opens — typically 60 to 90 days. The Bureau reviews comments, conducts economic analysis, and drafts the final rule. This phase alone can take years.
The payday lending rule spent years in development before proposal. The Section 1033 open banking rule took well over a decade from statutory mandate to finalization.
Outer ring — Rulemaking
Finalized
The rule is published as final. Compliance dates are set — sometimes years out. Industry begins preparing: updating systems, retraining staff, and revising disclosures. Then a new administration arrives, or a court blocks the rule before it takes effect.
The credit card late fee rule was finalized in March 2024 and enjoined by a Texas court the same week. It never took effect.
Outer ring — Rulemaking
Rescinded
The incoming administration withdraws the rule, declines to defend it in court, or Congress uses the Congressional Review Act to repeal it. Under the CRA, the Bureau is permanently barred from issuing a substantially similar rule without new legislation.
The Biden overdraft rule was finalized in December 2024 and repealed by Congress in April 2025. The payday rule's core provisions were later stripped back after years of development.
Outside the process — Courts
Court challenge
Industry plaintiffs file suit. A federal judge may issue a nationwide preliminary injunction. The rule is suspended before it can take effect. Compliance limbo can last years while litigation proceeds. Court challenges can happen under any administration.
The Section 1071 small business lending rule was enjoined after finalization in 2023. The credit card late fee rule was also blocked immediately after being finalized.
Inner ring — Guidance shortcut
Issued
A guidance document, circular, or advisory opinion is issued with no public comment, no standard notice-and-comment rulemaking, and often no equivalent level of scrutiny. It can shape market behavior immediately.
Circular 2022-03 on AI-driven adverse action notices pushed a significant interpretation of ECOA-related obligations without a full rulemaking process.
Inner ring — Guidance shortcut
Compliance burden
Even when guidance is technically non-binding, regulated parties often adjust to it anyway. Policies change, staff are retrained, product decisions are revisited, and compliance resources are spent in response to standards that did not go through full rulemaking.
After the 2022 returned deposit fee bulletin, multiple banks revised fee practices. After the BNPL interpretive rule, firms faced pressure to rethink compliance programs.
Inner ring — Guidance shortcut
Withdrawn
The next administration withdraws the guidance with no comparable public process. The compliance work is stranded. The standard disappears. Industry is left uncertain whether the old interpretation or the new one governs.
In May 2025, Acting Director Vought withdrew 67 guidance documents in a single Federal Register notice, sweeping away the full set of Chopra-era circulars, bulletins, and advisory opinions.
Nonbank Supervision

Where the Statute Requires More

The Dodd-Frank Act gave the CFPB a specific mandate, with specific obligations and specific limits. When the Bureau operates within that mandate, it is durable. When it steps back from what the statute requires, it becomes vulnerable to courts, to incoming administrations, and to the political pendulum.

Two provisions are central to the Bureau's consumer protection mission, and both speak directly to how the CFPB should supervise the institutions Americans actually use. Together, they define a single principle: consumer financial law applies across the full consumer finance perimeter, and the Bureau is obligated to make that real.

Consistent Enforcement Across Entity Types

The Bureau shall ensure that federal consumer financial law is enforced consistently, without regard to the status of a person as a depository institution, in order to promote fair competition. Dodd-Frank Act § 1021(b)

This is an affirmative obligation. A consumer using a fintech payment app and a consumer using a bank-issued debit card deserve the same protections. The statute is explicit about this.

Mandatory Nonbank Supervision

The Bureau shall require reports and conduct examinations on a periodic basis of persons described in subsection (a)(1) for purposes of assessing compliance with the requirements of Federal consumer financial law. Dodd-Frank Act § 1024(b)(1)

Congress chose mandatory language deliberately. For large banks, Section 1025 gives the Bureau "authority to" examine. For nonbanks, the verb is shall. The difference matters. Without federal supervision, nonbanks would face none. A Bureau that treats nonbank supervision as optional inverts a deliberate Congressional choice.

A Coalition Is Forming

More people are raising the same concern: the CFPB needs reform.

Lawmakers from both parties, legal scholars, former regulators, and industry leaders are converging on the same diagnosis: the structure is producing the volatility, and only Congress can fix it. They want a CFPB that follows the law, applies its authority consistently, and gives consumers and markets a more stable framework.

The CFPB urgently needs reform to ensure accountability and transparency to Congress and the American people.
French Hill (R-Ark.)
U.S. House Financial Services Committee Chair
Congress can end the CFPB’s political football and establish a bipartisan commission with strong congressional review to ensure that the agency has a clear mandate, transparency in its operations, limits on its power, and accountability to the US government and the consumers it serves.
Kyrsten Sinema
Former U.S. Senator
It is my hope that through both internal and external reform, the CFPB may yet be positioned to fulfill its mandate to both protect consumers and ensure that they have the innovative products and services that American ingenuity is prepared to deliver.
Bryan A. Schneider
Former CFPB Associate Director for the Division of Supervision, Enforcement and Fair Lending
A CFPB that steps back from supervising nonbanks is not a more focused regulator. It is a less complete one. Consumer harm does not respect the distinction between banks and nonbanks. Neither should the Bureau's priorities.
Lindsey Johnson
President & CEO, Consumer Bankers Association
If managed effectively, the bureau should be able to carry out a common-sense mission: shutting down fraudsters and other bad actors while setting clear and consistent rules that enable honest businesses to thrive.
Editorial Board
Bloomberg
[T]he real problem here, and what we have been saying from the moment of [the Bureau's] inception is this: Why wouldn't the next Director, with a politically-different persuasion, not abuse his or her powers with the precedent you have set? The political pendulum does not stop swinging...
Former Chairman Patrick McHenry
U.S. House Financial Services Committee
Past abuses...stem from significant structural flaws at the CFPB, which reduce accountability and lead to regulatory swings that stifle innovation and competition. Republicans have long called for reforms to ensure the Bureau is accountable to the American people. Today, we’ll propose transitioning the CFPB to a bipartisan commission and bringing it under congressional appropriations.
Rep. Andy Barr (R-Ky.)
U.S. House Financial Services Committee Financial Institutions Subcommittee Chair
Nonbank financial services providers have a large and increasing significance to the everyday financial lives of consumers, growing at twice the rate of banking services in the last few years — growth that has happened alongside, not despite of, regulation and oversight of the CFPB. Consumers and businesses, especially those without access to traditional banks, rely on these providers for their financial needs. I urge the CFPB to continue its important work in regulating these nonbank providers and helping protect consumers from catastrophic financial harm
Attorney General Rob Bonta
California Department of Justice
An agency with changing political leadership is expected to shift its priorities. However, the speed and extent of the CFPB's pendulum swings have undermined its credibility as a regulator committed to fairly implementing and enforcing the laws Congress has written. Furthermore, these extreme swings are destabilizing for the market for consumer financial products and services, and they undermine the goal of assuring that markets are "fair, transparent, and competitive."
Jason Brown
Visiting Fellow, Brookings Institution — Economic Studies / Retirement Security Project
David Silberman
Visiting Fellow, Brookings Institution — Economic Studies / Retirement Security Project

The Window for CFPB Reform Is Open

After years of regulatory whiplash, there is growing bipartisan recognition that the Consumer Financial Protection Bureau’s current structure isn’t working. Lawmakers on both sides of the aisle have raised concerns about the Bureau's regulatory swings, its reliance on legal interpretations that pushed beyond what the statute authorized, and the lack of transparency and accountability.

The new administration has already begun reversing some of the most problematic actions, and CBA has engaged directly with the Bureau on its five-year strategic plan — urging it to recommit to statutory discipline, harm-focused enforcement, and evenhanded oversight. But administrative direction can shift with the next election. Only Congress can build the kind of durable, credible regulator that consumers and markets need.

Read the White Paper
CBA CFPB reform white paper cover

Five Principles for a Credible, Durable CFPB

CBA’s reform framework is built on five principles. Together, they describe what an apolitical, statutorily disciplined Bureau looks like in practice — and what the legislation below is designed to deliver.

01

Follow the law — and apply it evenly

The Bureau must operate within the authority Congress gave it. Standards should be grounded in clear statutory mandates and applied consistently across banks and nonbanks alike. Consumers deserve the same protections regardless of where they access financial services.

02

Stop the political pendulum

Policy should evolve deliberately, driven by data and long-term objectives rather than political cycles. Financial markets don't reset every four years, and regulation shouldn’t either.

03

Coordinate with prudential regulators

The CFPB, Fed, OCC, and FDIC oversee the same institutions. Duplicative exams and conflicting expectations weaken both consumer protection and safety and soundness.

04

Prevent regulatory fragmentation

When federal oversight falters, enforcement splinters into a patchwork of fifty state rules. A strong, consistent federal framework reduces the need for disparate state action.

05

Ground rules in operational reality

Rules written without operational input produce unintended consequences. Constructive engagement — alongside consumer advocates — leads to regulation that actually works.

CFPB Reform Legislation: What Congress Should Do

Administrative action can correct the worst excesses. But only legislation can create the structural stability the Consumer Financial Protection Bureau needs to function as a credible, durable regulator. CBA supports the following reforms:

Accountability & Transparency
H.R. 1652

Rectifying UDAAP Act

Clarifies the Bureau's authority to deem practices “abusive,” requires cost-benefit analysis for UDAAP rules, and protects institutions that demonstrate good-faith compliance efforts.

 H.R. 2331

Transparency in CFPB Cost-Benefit Analysis Act

Requires the Bureau to publish full cost-benefit analyses for all proposed rules, including impacts on small businesses and alternatives considered.

 H.R. 2513

CFPB-IG Reform Act

Establishes a dedicated Inspector General for the CFPB, rather than sharing one with the Federal Reserve, bringing independent oversight to the Bureau's operations.
Structural Stability
H.R. 3445

CFPB Commission Act

Replaces the single-director structure with a bipartisan commission, insulating the Bureau from political swings and ensuring continuity across administrations.

 H.R. 654

TABS Act

Subjects the CFPB to the Congressional appropriations process, giving lawmakers ongoing oversight of the Bureau's budget and regulatory activities.
CBA Priority

Cumulative Impact Requirement

Requires policymakers to assess the combined effects of proposed regulations on consumers, small businesses, and credit access before finalizing rules.

CBA Priority

Regular Lookbacks

Requires independent review of major financial regulations after five to ten years to assess whether they achieved their stated objectives. Ineffective rules sunset unless reproposed.

Consumer Data Protection
H.R. 2885

Bank Loan Privacy Act

Requires the CFPB to issue transparent rules before modifying or deleting publicly available small business loan data, ensuring proper privacy protections.

CFPB Reform Resources

White Paper

Reforming the CFPB Into a Strong and Durable Regulator Americans Deserve

CBA's comprehensive reform blueprint. January 2025.

 Comment Letter

CBA Response to CFPB Draft Strategic Plan FY 2026–2030

CBA's engagement with the Bureau's five-year plan. April 2026.

 Testimony

Lindsey Johnson Before the House Financial Services Committee

Lessons learned from the Dodd-Frank Act.

 Op-Ed

Congress Has a Chance to Hit Reset on the CFPB

Lindsey Johnson on why lawmakers should seize this moment.

 Testimony

Now is the Time to Enact CFPB Reforms

CBA's General Counsel on the opportunity to transform Bureau into a credible, durable regulator.

 Correcting the Record

Facts Matter

Using the CFPB's own data to set the record straight.

 Op-Ed

Kyrsten Sinema: End the CFPB’s political football by creating a bipartisan commission

Having a capable and credible consumer watchdog agency is more important now than ever.

Congress Created the CFPB.
It's Time to Fix It.

A credible, durable Bureau is achievable. One that operates within the mandate Congress gave it, consistently, across administrations. It starts with the right framework, the right statutory discipline, and the right legislation.

Read the Full White Paper →

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