FOR IMMEDIATE RELEASE: April 30, 2025

CONTACT: Carter Dougherty, carter@ourfinancialsecurity.org

House Committee Aims to Gut Key Financial Regulators
Drastic cuts to oversight agencies pose risks to consumers, investors and financial stability

Proposals from the House Financial Services Committee majority for budget reconciliation would defund and dramatically erode the effectiveness of key financial regulators under the pretense of generating budgetary savings as part of the House majority’s broader plan to pay for tax cuts for the very richest families, biggest business, and Wall Street firms.

The real intention is to dismantle the Consumer Financial Protection Bureau (CFPB), a vital agency with a strong track record of putting money back in people’s pockets, and the other agencies designed to monitor the financial system for emerging financial risks and reduce the likelihood and severity of future financial crises.

“Couching savage unraveling of industry oversight as necessary federal budgetary trimming is just a Wall Street wolf in sheep’s clothing,” said Patrick Woodall, managing director for policy at Americans for Financial Reform. “These attacks on the CFPB and the federal sentinels monitoring to stop the next financial crisis don’t really save money, they just give Wall Street banks and Main Street financial predators a get out of jail free card and put the entire economy at risk.”

A coalition of 349 consumer, civil rights, labor, legal services and community organizations have called on Congress to oppose changes to the CFPB or its funding that would imperil its mission of protecting consumers. That letter can be found here.

The committee leadership is planning votes on funding levels that would do enormous damage all around:

• Reducing the Consumer Financial Protection Bureau’s funding draw from the Federal Reserve by 70 percent, which is nothing more than a green light to bad actors in the financial services industry to rip people off at an increased rate. This allocation, by contrast, is only 40 percent of what the CFPB leadership in the first Trump administration, no friend of consumers, thought was necessary. The cuts would also likely render the CFPB unable to perform the statutorily required duties that Congress mandated when the agency was created.
• Annually shifting the CFPB’s Civil Penalty Fund to the Treasury has zero budgetary impact. But the CFPB would be unable to provide relief to people that were harmed by companies that are unable to make restitution, which has provided $1.2 billion in payments to defrauded consumers to date.
• Eliminating the fund that bankrolls the Office of Financial Research which monitors and provides critical data to identify emerging and novel financial risks would make the economy more vulnerable to shocks that would harm communities across the country.
• Moving the Public Company Accounting Oversight Board to the Securities and Exchange Commission would strip away independent oversight of the auditors putting investors, and market integrity, at risk.
• Ending the Green and Resilient Retrofit Program would threaten projects that are set to keep tens of thousands of residential housing units more livable for low-income families.

Instead of trying to gut financial regulators, the committee should support the resolution of inquiry, introduced by Rep. Maxine Waters, to get to the bottom of how Elon Musk’s DOGE team is hacking away at the CFPB’s capacity to do its work. H. Res. 259 demands that the President provide specific documents to the House of Representatives regarding DOGE’s access to computer systems and confidential data at the CFPB.

With every passing day, more information comes to light about the activities of DOGE employees at the CFPB and how they are flouting the law, both the Dodd-Frank Act, which created the agency, and broader rules around government conduct. According to new reporting, Gavin Kliger, the DOGE staffer involved in illegal firings at the CFPB, owns as much as $365,000 in shares of companies regulated by the agency, something prohibited by standing ethics rules. The Waters resolution seeks swift and complete answers about the actions and conflicts of interest of DOGE personnel.

“Musk’s minions have access to sensitive data at the CFPB that exposes people’s personal data and includes information that could benefit Musk’s companies, such as confidential business information from rival payment apps and auto lenders,” Woodall said. “Rather than hack away at budgets to fund tax cuts for billionaires like Musk, the committee should get to the bottom of Musk’s malicious meddling.”

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