Significant Overhaul Proposed for Consumer Financial Protection Bureau

New legislation introduced on January 23, 2025, seeks to reshape a key federal agency with 13 supporting lawmakers.

Here is a summary of the legislation:

New Name and Structure

The Bureau of Consumer Financial Protection (BCFP) will take on a new identity and be renamed the Consumer Financial Empowerment Agency (CFEA). This change includes various amendments to current laws to reflect the new name.

Independence and Funding Process

The CFEA will operate as an independent agency instead of being part of the Federal Reserve. The agency will also transition to the standard federal appropriation process, requiring Congressional approval for its budget, unlike its previous financing through the Federal Reserve.

Leadership Changes

The bill stipulates that the President will appoint the Director of the CFEA. Additionally, this new legislation will eliminate certain procedural responsibilities that were part of the BCFP’s existing framework.

Key Legislative References

This legislation involves conforming amendments to various existing laws that guide consumer financial protections, which will now reference the CFEA instead of the BCFP. These include:

• Dodd-Frank Wall Street Reform and Consumer Protection Act
• Equal Credit Opportunity Act
• Truth in Lending Act
• Fair Credit Reporting Act
• Several other related statutes

Funding Authorization

The bill proposes specific authorizations for funding the CFEA for the fiscal years 2026 and 2027 to support its operations.

Overall Objective

The goal of this legislation is to enhance the agency’s independence and establish a clearer funding process through Congressional appropriations. This is designed to empower the CFEA to better safeguard consumers in the financial marketplace.

Relevant Companies

None found

This article is not financial advice. See Quiver Quantitative’s disclaimers for more information.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.