WASHINGTON (Reuters) - A leading Republican lawmaker on Thursday proposed cutting funds for the Consumer Financial Protection Bureau as a way to eliminate the U.S. agency that writes banking rules.
Created by the Obama administration in the wake of the 2007-09 financial crisis, the CFPB has enraged many Republicans who believe it has overstepped its enforcement authority.
Jeb Hensarling, the Republican chairman of the House Financial Services Committee, said the CFPB could be “functionally terminated” if Congress simply drained the agency’s budget.
Republicans control the upper chamber of Congress and a routine vote there could starve the CFPB, Hensarling wrote in a Wall Street Journal op-ed.
“The senate can achieve this with a simple majority vote,” Hensarling wrote.
He and other Republicans argue the CFPB only layers red tape and costly regulations on a lending industry that is already sufficiently supervised.
As a budget matter, Hensarling’s plan would only require 51 votes in the senate. A proposal to actually reform the CFPB would require 60 votes.
Democratic senators like Elizabeth Warren, who helped devise the agency, and Sherrod Brown, the party’s leader on the Banking Committee, could stand in the way of such a 60-vote measure in the senate.
A U.S. appeals court last week rejected separate bids by 16 states and two Democratic lawmakers to defend the agency in a legal battle that could strip it of powers.
Reporting By Patrick Rucker, Lisa Lambert and Amanda Becker; Editing by Andrew Hay