By Tom Feltner, Associate Director of Consumer Policy
Update: On September 16th, the House Financial Services Committee favorably reported H.R. 10184 to the full House with all Democrats present voting to oppose, and all Republicans present voting in favor. Committee Republicans also blocked amendments by Reps. Lynch and Foster to restore protections against lending discrimination and efforts to protect older people and members of the military.
Less than two decades ago, a global financial and housing crisis stripped trillions of dollars of household wealth and pushed millions of families out of their homes. In response, Congress took a bold and long-overdue action to stop predatory and reckless lending practices that, until then, had gone unchecked and devastated millions of people’s financial well-being and the entire economy. As part of that response, Congress created the Consumer Financial Protection Bureau (CFPB) as an independent and adaptable federal watchdog with the sole mission to stand up for everyday people trying to borrow safely and save for the future.
Until the recent actions of this Congress and the Trump administration, the CFPB carried out this mission faithfully, efficiently, and successfully. Through its supervision, enforcement actions, and public complaint system, the CFPB returned over $21 billion in direct relief, including relief to people who were harmed by fly-by-night or bankrupt companies. It established critical market rules that increased pricing transparency and competition, curbed hidden junk fees, broke up predatory lending schemes, and halted misleading mortgage practices. Its research and specialized offices led the way in safeguarding servicemembers, students, older people, and others.
Yet despite that track record, Republicans in Congress are using the few remaining legislative days before the midterm elections not to investigate the rapid-fire corporate pardons of the past year or take on pressing affordability issues, but to try, yet again, to systematically dismantle the agency from within.
In response, a coalition of civil rights, labor, community, and consumer groups recently announced their strong opposition to that misguided effort. In a letter to the House Financial Services Committee, their warning was unequivocal. If adopted, the so-called Consumer Financial Protection Accountability and Reform Act of 2026 will make the financial marketplace less fair, more expensive and dangerously prone to exactly the type of crisis the CFPB was created to prevent.
The legislation undermines consumer protections and the economy in several fundamental ways.
Strips the CFPB’s ability to compensate people targeted by illegal practices
When fly-by-night companies close or end up in bankruptcy, the people they cheated often end up empty handed. The CFPB’s Civil Penalty Fund was designed to address this very problem by holding back penalties from companies that broke the law to compensate people who would otherwise be left with nothing. The fund has provided billions of dollars in compensation to millions of people under every prior administration. When the largest credit repair company in the country, Lexington Law and CreditRepair.com, collected billions in illegal fees and engaged in fraudulent credit repair schemes that harmed over four million people, the fund was used to provide compensation even after the company filed for bankruptcy. Without the Civil Penalty Fund, millions of people would have lost their money and received nothing back even after the company was held to account.
As scams explode to record levels and millions of people turn to the CFPB for help, this bill seeks to curtail this compensation backstop at exactly the wrong time. If enacted, the bill would sharply restrict who can collect relief and will siphon billions of dollars to the general Treasury rather than reserving those funds for people who have been scammed.
Manufactures gridlock to protect corporate influence
Fueled in part by Big Tech and private equity, new financial products are flooding the market, often with unknown long-term risks. The CFPB was designed to be a nimble agency able to quickly jump in and review the practices of new companies with risky products, enforce the law, and put in place new safeguards when there is evidence they are needed. Yet this bill saddles the CFPB with redundant, hyper-detailed cost-benefit analyses and repetitive impact reviews even though existing laws already impose strict standards before new protections are implemented. These new requirements will not foster genuine transparency—they are designed solely to tie up agency staff in bureaucratic knots, delay essential rules, and give predatory lenders yet another procedural pretext to derail consumer protections in court. It is exactly this type of regulatory gridlock that allowed predatory subprime lending to explode under the nose of banking regulators in Washington during the last crisis and exactly the type of gridlock that Big Tech and Wall Street see as their short cut to push-market extractive consumer debt and the profits that follow.
Rigs the system for payday lenders and influential companies
When it was established, the CFPB was given broad powers to apply consumer protection laws, like pricing transparency requirements and prohibitions against discrimination, consistently across all types of products and the companies that offer them.
Voters of both parties are already sceptical about so-called innovations like earned wage access loans—products that are little more than online payday loans in disguise. This bill, however, turns that common-sense expectation on its head and gives payday lenders a broad exemption from many consumer protection laws and even basic know-before-you-owe price transparency. It also carves out earned wage access loans from existing prohibitions on discrimination and even exempts them from financial protections for members of the military. Midterm voters embrace the idea that companies and products should be governed by the same set of rules and compete on a level playing field—this bill gives them a rigged system instead.
Hands Wall Street and Big Tech more sway over the CFPB’s budget
When Congress established the CFPB, it deliberately insulated the agency by providing it with the independent funding necessary to stand up for people against entrenched corporate interests in Washington. Every other banking regulator in Washington has an independent source of funding by design, and despite over a decade of industry attacks, the Supreme Court upheld the constitutionality of the CFPB’s funding in 2024.
This bill dismantles that independence from Wall Street at a time when voters of both parties believe these powerful interests already have too much sway over government and the economy. Until recently, the CFPB has been an agency driven by research and stories shared by real people seeking help with their financial problems. If adopted, this bill will give special interests the ability to use the byzantine congressional appropriations process to defund specific investigations they do not like, stall active enforcement cases against politically connected companies, and hold the agency hostage during government shutdowns.
A CFPB empowered to stand up to powerful interests or beholden to them
At a time when the cost of everything is skyrocketing and people are turning to debt to afford groceries, rent, and everyday necessities, the last thing people want is to see financial companies get one carve-out and handout after another. Defeating this misguided legislation that will do nothing to bring down costs and shift even more financial risk onto everyday people is a start to returning the CFPB to its statutory mission. Congress should also restore the CFPB protections it reversed last year–protections like capping credit card late fees that averaged $32 and reining in overdraft fees. Both enjoy broad bipartisan support among midterm voters despite the enthusiasm among some legislators to roll them back last year. The CFPB must also restart its work to crack down on the Big Tech giants and data brokers that are buying and selling personal financial information in a largely unregulated marketplace that has become a tool of corporate surveillance and a hotbed for scams. But perhaps most important, the CFPB must have the funding and staff to take on the known and emerging challenges of the coming decade, since it is the agency’s adaptability to a changing market and its singular focus on protecting people from financial harm that has allowed the CFPB enjoy strong and lasting support among voters of all parties.