WASHINGTON—An indicator of just how the oversight environment for the CFPB is going to change when the new Congress is sworn in was apparent during a House hearing here.
During the House Financial Services Committee (HFSC) hearing on CFPB, Republicans made it clear they plan to rein in what one person called an “unaccountable CFPB.”
The committee’s chairmanship and its resulting focus will change when Republicans take over control of the House effective with the 118th Congress in January. This week’s hearing was the last at which the committee will be chaired by Rep. Maxine Waters (D-CA).
During the hearing, at which CFPB Director Rohit Chopra was on hand to testify, Republicans blasted all types of activities by the CFPB, including its press releases, public guidance and other content on its website, as de facto rulemakings. That in turn led to multiple heated exchanges with Chopra.
Court Decision Slammed
For her part, Waters stated support for the Bureau while expressing “dismay” with the Fifth U.S. Circuit Court of Appeals’ ruling that found the Bureau’s funding structure unconstitutional because the CFPB receives funding through the Federal Reserve rather than the congressional appropriations process.
Ranking member Rep. Patrick McHenry (R-NC), who will chair the House Committee in the next Congress, said he will be taking oversight of the CFPB much more seriously when the new Congress convenes, saying the Bureau’s “lack of transparency is of grave concern.”
Under his leadership, McHenry said the Committee will pursue "aggressive oversight to rein in the unaccountable CFPB."
Chopra Focuses on Current Work
In his prepared opening statement, Chopra focused on the CFPB’s current work regarding evaluations of big tech payment apps, proper implementation of section 1033 of the Dodd-Frank Act, and updating privacy policies required by the Gramm-Leach-Bliley Act (GLBA).
In response to questions from members of the committee, Chopra said the Bureau is collecting data on fraud with peer-to-peer (P2P) payment apps, as the CFPB has heard from financial institutions about “their inability to understand fraud when it comes to use of these apps and big tech technologies.”
He told the committee the Bureau will offer more information to financial institutions on how to deal with P2P fraud.
Chopra also said that the Bureau is currently under court supervision to issue a final rule in March 2023 regarding small business data collection pertaining to section 1071 of the Dodd-Frank Act.
Chopra also expressed that the GLBA’s privacy and security frameworks need to be enhanced to ensure data isn’t being shared and sold in an unauthorized manner.