House Bill to Overhaul CFPB Would Move Agency to Congressional Appropriations and Limit Enforcement Power

Inside the U.S. Capitol on Tuesday morning, House Financial Services Committee Chairman French Hill and Subcommittee Chairman Andy Barr unveiled a 2026 legislative package designed to fundamentally restructure the Consumer Financial Protection Bureau. The Consumer Financial Protection Accountability and Reform Act of 2026, designated H.R. 10184, would strip the agency of its independent funding mechanism through the Federal Reserve and subject its budget to the annual congressional appropriations process.[1][2]

The legislation arrives as a direct challenge to the bureau's operational autonomy, which was established in 2010 under the Dodd-Frank Act to insulate consumer financial oversight from political funding cycles. Currently, the CFPB director requests operating funds directly from the Federal Reserve, up to an annually capped limit. By moving the agency into the standard appropriations pipeline, the 28 Republican co-sponsors seek to give lawmakers direct control over the bureau's resources and regulatory footprint.[2][3]

Beyond funding mechanics, the bill narrows the CFPB's enforcement authority by redefining what constitutes an "abusive" practice under the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) standard. Under the proposed text, a practice would only be deemed abusive if it presents a risk of substantial injury to the consumer that is not outweighed by countervailing benefits. The legislation also grants companies a 180-day window to cure a violation before the bureau can initiate a lawsuit, and prohibits monetary relief if a firm demonstrates good-faith compliance efforts.[2][6]

The overhaul would significantly reduce the number of financial institutions subject to direct CFPB supervision. The bill raises the asset threshold for mandatory oversight from $10 billion to $30 billion, a figure that would be periodically adjusted after 2031. Institutions falling below that new line could elect to be supervised by their primary prudential regulator instead. Additionally, the legislation eliminates the Consumer Financial Protection Fund, mandating that any civil penalties remaining after victims are compensated must revert directly to the U.S. Treasury.[5][6]

Proponents of the measure argue the bureau has operated without sufficient oversight. "The CFPB is costing consumers almost $370 billion since 2011, according to a White House study from earlier this year," Barr said during the bill's introduction, describing the agency as "rogue since the beginning." The cited Council of Economic Advisers report estimated the bureau's regulations had increased consumer costs by between $237 billion and $369 billion, primarily through elevated mortgage borrowing expenses.[1][6]

Consumer advocates and former bureau officials dispute those figures. Doug Simons, a former CFPB senior fellow, argued the White House study mistakenly attributed higher yields on loans with elevated debt-to-income ratios entirely to compliance costs rather than genuine credit risk. The National Consumer Law Center dismissed the report's cost estimates as "unfounded," warning that curtailing the agency's enforcement powers would leave borrowers exposed to predatory lending practices.[3][6]

The Republican proposal stands in stark contrast to recent Democratic efforts to solidify the bureau's financial independence. Three months ago, 11 Democrats on the Senate Banking Committee introduced competing legislation that would require the Federal Reserve to automatically transfer at least 12 percent of its total operating expenses to the CFPB. That measure aims to prevent any future administration from withholding funds by making the transfers mandatory rather than dependent on yearly requests.[3]

The House bill also mandates the creation of a dedicated, Senate-confirmed Inspector General for the CFPB—a structural feature shared by most federal financial regulators, though currently, the bureau falls under the purview of the Federal Reserve's Inspector General. As the legislation moves toward a committee vote, the debate centers on whether the proposed "durable guardrails" will provide necessary regulatory certainty or effectively defang the primary federal watchdog for consumer financial products.[1][2][5]