The saga against the Consumer Financial Protection Bureau (CFPB) continues as the House Financial Services Committee has announced it will be considering new legislation that would reshape the organization, specifically its single-director-led status, which has long been criticized along with the organization’s lack of government oversight.

Opposition to the CFPB has long since felt the combination of these two allowed the CFPB to skirt the Appropriations Clause and operate with an “off-the-books charge card.”

The courts seemingly agreed, and in October 2022, the 5th Circuit Court ruled in favor of the opposition, finding the CFPB’s structure unconstitutional. The ruling was met with praise from financial institutions and credit union groups alike, who agreed the best route for all was for the CFPB to be subjected to the Appropriations Clause as any other government or financial institution would be.

Then, in February 2023, the Supreme Court agreed to review the ruling to determine if the CFPB’s structure truly was unconstitutional, though it provided no timeline for doing so.

Quickly following this announcement, the 2nd Circuit Court ruled in March 2023 that the organization was constitutional, citing that the 5th Circuit Court was misinterpreting the Appropriations Clause, which merely stated that ‘the payment of money from the Treasury must be authorized by a statute,” of which the CFPB was not in violation.

The consistent back-and-forth and multiple rulings left things in a state of confusion and frustration as groups continued to debate the validity of the organization and how best to quickly resolve the matter. Eyes looked to the Supreme Court to expedite the review process and lay the issue to rest once and for all. 

“The Supreme Court could begin the debate or end the debate,” said Brad Thaler, Vice President of Legislative Affairs for NAFCU. 

However, many are not complacent to wait for the Supreme Court to decide the fate of the CFPB. The House Financial Services Committee will be considering legislation—a compilation of seven different bills—which would completely alter the CFPB’s structure and operations.

Namely, it would change the organization from a single-director-led to a five-member commission structure. All members of the commission would need to be nominated by the president and confirmed by the Senate. The CFPB would, of course, also be subjected to the Appropriations Clause the 5th Circuit Court found it to be in violation of.

Additionally, the set of bills would create a whistleblower program inside the CFPB, assign an Inspector General just for the CFPB, which previously shared one with the Federal Reserve, and create a new Office of Economic Analysis, which would “prepare a cost-benefit analysis for all guidance or rules issued by the agency.”

Despite the announcement, most believe the bill has virtually no chance of being passed. While it may make it through the committee and the Republican-led House, it is predicted to quickly fail in the Senate. This means the quickest resolution to the ever-evolving issue would still be the Supreme Court’s review of the case, though it still has yet to announce when it will begin that process.

Until then, the CFPB’s fate remains unknown.