In recent weeks, President Trump has moved quickly to implement sweeping changes to the federal government. Chief among these are recent cuts to federal agencies, made courtesy of the newly created Department of Government Efficiency (DOGE).
Intended to serve as an advisory body to government leaders, DOGE is primarily focused on slashing government regulations and spending. However, targeting entire agencies for elimination is not out of the question. In fact, as recently as Friday it was reported that DOGE may by doing just that by placing the highly controversial Consumer Financial Protection Bureau (CFPB) in its crosshairs—good.
The brainchild of Massachusetts Senator Elizabeth Warren, the CFPB was founded in 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It was designed to consolidate the responsibilities of several government agencies into one and provide consumer protection by holding firms accountable for illegal behavior. Specifically, the agency was given the “authority to administer, enforce, and otherwise implement federal consumer financial laws.” In practice, this meant the power to make rules and regulations, issue orders and subpoenas, conduct investigations, and provide general guidance.
Supporters argue the CFPB has proven successful at protecting consumers from various unseen financial penalties and scams, such as those relating to predatory student loans, and that the agency continues to serve a vital purpose. Sadly, they are mistaken.
While protecting consumers from predatory behavior is undoubtedly important, other agencies like the Federal Trade Commission are perfectly capable of carrying out such responsibilities. The CFPB’s creation was unnecessary and only adds to the growing number of federal agencies and sub-agencies demanding larger budgets, providing duplicative services, and often operating with limited oversight.
The CFPB is particularly problematic because it is not subject to the traditional appropriations process, meaning that rather than have its budget approved by Congress each year, it receives monetary transfers from the Federal Reserve Board. This insulates it from political pressure but also decreases necessary accountability, something for which it has received much criticism. The CFPB is also unique in that it is not governed by a bipartisan board of commissioners like other agencies. Rather, it is led by a single unelected bureaucrat appointed by the president for a five-year term. While the U.S. Supreme Court recently ruled that such a funding structure is constitutional, there are still valid concerns regarding accountability and whether the agency should even exist.
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Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.