Both Parties Should Support CFPB Reform

Solveig Singleton

This week marks the release of the Consumer Financial Protection Accountability and Reform Act of 2026, H.R. 10184. Discussions of measures to restructure the Consumer Financial Protection Bureau (CFPB) are sharply polarized, mainly along political lines. On the Republican side, proponents of reform call out the bureau’s overreach. Defenders of the status quo, mostly on the Democratic side, remind us that the bureau was intended to protect consumers and insist that only the bureau can do so.

But many policymakers share the same concerns about the CFPB. And a close look at those concerns reveals a bipartisan case for reform. Many of the changes proposed by measures like the CFPB Reform Act of 2026 should be welcomed across party lines.

The “cop on the beat” can go too far. The bureau is often compared to a “cop on the beat.” The metaphor recalls a fundamental insight of American governance: We do not entirely trust the police. Enforcement agencies need accountability to avoid overreach. Whether an agency’s mission is protecting consumers from fraud, scams, defective lawn mowers, or burglars, safeguards are not optional. That’s why the Federal Trade Commission, the Department of Justice, and local police forces are funded with appropriations controlled by elected legislators. We should ensure that such basic accountability measures work for the bureau too. This would mean funding the bureau from appropriations (Section 101 of H.R. 10184), giving it its own inspector general (Section 106), and carefully defining the scope of its information-gathering, supervisory, and other regulatory powers (Title III, Title IV, Sections 204, 205, 404, 502, 505, and 506). 

Fairness and growth require the rule of law. The rule of law is the idea that everyone is governed by certain knowable rules. When the ground rules for financial services are unclear or change suddenly, businesses feel they have been treated unfairly and hesitate to commit to growth. At the bureau, supporting the rule of law means ensuring that the bureau follows the letter of the law. It means clarifying what “abusive” conduct is (Section 201). And it means that the public should have notice and a chance to comment on changes in policy as required by the Administrative Procedure Act and avoid regulation by guidance or enforcement (Section 302 and Title V).

Regulation can limit consumers’ access to services. The Dodd–Frank Act calls for the bureau to consider the costs and benefits of its proposals, including “the potential reduction of access by consumers to consumer financial products or services.” Implicit in this language is Congress’ recognition, backed by studies, that regulation has effects that can accidentally harm consumers and small businesses. The overall burden of regulation is a kind of hidden tax. It falls more heavily on smaller firms that cannot afford armies of lawyers than on larger ones. The bureau should be more careful that it does not do more harm than good and carefully consider the costs and benefits of its proposals (Sections 103, 104, and 105). It should also avoid duplicative or unnecessary regulation (Sections 204, 205, 401, 402, and 403). And it should recognize that punitive rules for small-dollar lenders can do more harm than good (Title III).

Fraud enforcement should be a priority. Stopping fraud is an appropriate core function for the bureau. Markets in financial services require trust, and that trust depends in part on fraud enforcement by the bureau and other agencies. Americans are suffering massive concrete financial losses from fraud and scams perpetrated by bad actors, and members of all parties can agree that these scams are harmful. This is exactly the kind of problem the bureau is supposed to fix. But in the past, the bureau has strayed outside this mission, trying to redesign financial services or address issues rooted in other policy areas. For example, the bureau tried to block the inclusion of medical bills in credit histories (a rule fortunately blocked by Congress); one probable outcome would have been to spur doctors and hospitals to charge for services up front. Dealing with health problems can be expensive and is likely to require financial services, as with many other challenges in life. But health care reform would be a far more effective way to tackle the problem. The bureau’s ambitious attempts to address problems such as inequality and the high cost of living, the causes of which mainly originate outside of financial services, are likely to fail and add little value at the margin. Congress would be wise to ensure that the bureau is focused on fraud (Sections 201, 203, and 404). 

Conclusion

Politics has made conversations about CFPB reform play out like a theatrical collision between two irreconcilable positions. But reforms such as those set out in H.R. 10184 are moderate and should be uncontroversial regardless of political affiliation. Most politicians agree, for instance, that fraud is bad and government agencies should be accountable. If Congress insists on keeping the CFPB around, the least it can do is deliver the basic promises that it made when creating the bureau.