A New Era for the CFPB: Key Takeaways from the House Subcommittee on Financial Institutions Hearing

Posted by Gracie Nelson on March 28, 2025

Thursday, the House Financial Services on Financial Institutions convened for a hearing titled “A New Era for the CFPB: Balancing Power and Reprioritizing Consumer Protections.” Subcommittee Chairman Representative Andy Barr set the tone in his opening remarks, emphasizing the need for a financial sector that remains competitive, safe, and sound. He also highlighted structural flaws within the CFPB, particularly its lack of checks-and-balances, which he argued has led to regulatory swings and misuse of its authority over Civil Investigative Demands (CIDs) and Unfair, Deceptive, or Abusive Acts or Practices (UDAAP).

Witnesses

The hearing featured testimony from a panel of experts, including a credit union leader:

• Brian Schneider, Partner at Manatt, Phelps & Phillips, and former Associate Director for Supervision, Enforcement, and Fair Lending at the CFPB.
• David Pommerehn, General Counsel and Head of Regulatory Affairs at the Consumer Bankers Association.
• Ana Fonesca, CEO of Logics Federal Credit Union, testifying on behalf of America’s Credit Unions.
• Rebecca Kuehn, Partner at Hudson Cook LLP, a consumer financial services law firm in Washington, D.C.
• Seth Frotman, Former General Counsel and Senior Advisor to CFPB Director Rohit Chopra.

Key Testimony Takeaways

Push for Structural Reform – Witnesses supported Chairman Barr’s call for reforming the CFPB leadership structure moving from a single Director to a bipartisan commission and moving the CFPB under the appropriations process. This has also been a long-term priority of credit unions and something GoWest has advocated for.

• Concerns Over Regulation by Enforcement – Several panelists criticized the CFPB for using enforcement action without clear regulatory guidance creating uncertainty and compliance risk. Specifically, several panelists highlighted the use of UDAAP and the undefined nature of due process in CIDs.

Other Policy Concerns

Threshold Impacts: Panelists expressed concerns about crossing the $10B threshold and facing significant costs. Ana Fonseca from Logix FCU testified that crossing the threshold triggers $4 million in added compliance costs while simultaneously reducing interchange revenue by an average of $10 million.

Tailored Regulation: A number of witnesses advocated for expanded exemptions and more tailored regulations for regulated entities specifically highlighting that CFPB exams should not duplicate exams performed by financial institutions primary regulator.

Posted in Advocacy on the Move, Regulatory Advocacy.