Gutting the Consumer Financial Protection Bureau

OPINION:

On Friday, a federal judge dealt President Trump another defeat by blocking the administration from dismantling the Consumer Financial Protection Bureau.

Government attorneys argued that the court had infringed on executive branch powers by effectively placing the regulatory agency in a “judicially managed receivership” and trying to dictate its day-to-day operations. That argument is unlikely to succeed. As much as it pains me to say, this Obama-appointed judge is on solid legal ground.

Mr. Trump is correct in wanting the CFPB abolished. It is completely unaccountable, receiving its funding directly from the Federal Reserve instead of through the standard congressional appropriations process. It has diminished Americans’ access to credit cards, which provides low-income households facing unexpected expenses with the best opportunity to stay afloat. It consistently infantilizes the very people it is meant to protect. If that were not enough, the CFPB is the brainchild of everyone’s favorite Cherokee princess, Sen. Elizabeth Warren.

Unfortunately for Mr. Trump, the CFPB was also duly established by Congress under the 2010 Dodd-Frank Act. Democrats required 60 Senate votes to pass it, and Republicans would need 60 votes to repeal it.

Even with control of the presidency and both houses of Congress, there is a strict limit on what a party can achieve without a filibusterproof majority in the Senate, which hasn’t occurred since Democrats briefly reached the 60-vote threshold in late 2009 and early 2010.

Republicans maintained majorities in the House and Senate during the first two years of Mr. Trump’s first term, yet they could not push through comprehensive immigration reform.

President Biden also entered office with a trifecta but failed to pass his elections bill or codify Roe v. Wade. By changing the Senate rules, 51 votes can bypass the filibuster, which means the opposition can do the same once they regain power.

So far, neither party has been willing to invoke this “nuclear option” except regarding judicial confirmations. When Democrats attempted it during Mr. Biden’s presidency, moderate Sens. Joe Manchin III, West Virginia independent, and Kyrsten Sinema, Arizona independent, blocked their efforts. It’s worth noting that neither is still in the Senate; future Democratic majorities may not be as farsighted.

One method to rein in the CFPB without abolishing the filibuster would be to eliminate its statutory budget cap through the reconciliation process, which requires only 51 votes. Sen. Ted Cruz and Rep. Keith Self, Texas Republicans, have introduced legislation to accomplish this. Without a guaranteed revenue stream from the Federal Reserve, the CFPB would need to work with Congress to justify its budget, just like every other agency. This wouldn’t abolish the CFPB but would certainly enhance its accountability.

Congress can also use its authority under the Congressional Review Act to reverse detrimental CFPB regulations within 60 days of implementation. Resolutions must pass the House and Senate and be signed by the president, meaning they are effective only when the same party holds all three positions. They cannot be filibustered.

Presidents typically have little motivation to reverse policies their appointees implement. Congressional Review Act resolutions are used primarily when a new party assumes office and seeks to overturn the outgoing administration’s eleventh-hour regulations.

Mr. Biden’s radical CFPB head, Rohit Chopra, provided a textbook case for why the Congressional Review Act is necessary when he promulgated two rules after the 2024 election. The first dramatically expanded the agency’s power to include not just banks but also “nonbank digital payment providers” such as Venmo and ApplePay. The second was even more pernicious: It would have limited checking account overdraft fees to $5 (the average is $35). This policy might sound nice — nobody likes overdraft fees — but it would force banks to become more risk-averse, which could result in the mass debanking of low-income Americans. It would also rob millions of others of the option to intentionally overdraw their accounts to pay for an emergency expense.

Fortunately, both policies are about to bite the dust. The Senate voted in early March to overturn the Venmo rule and later voted to nullify the overdraft fee cap. The overdraft fee resolution is expected to pass the House on Wednesday.

Once Congress overturns an agency rule under the Congressional Review Act, that agency can’t introduce a “substantially similar” rule. Ever. The only way around this prohibition is for Congress to pass new legislation. Because that legislation would likely require a filibusterproof Senate majority, the Congressional Review Act functions as a one-way ratchet: 51 votes to revoke harmful regulations and 60 votes to bring them back. Even if Democrats win a trifecta in 2028, these CFPB rules will remain dead.

Activist judges and obstructionist Democratic lawmakers are doing everything they can to sabotage the agenda the American people chose in November and have denied Mr. Trump some of the clear, swift victories he desires. Republicans can still make significant progress if they remain unified.

We always knew we would encounter opposition. Do we sit around complaining about it, or do we roll up our sleeves and start stacking up the wins?

• Haley Kennington (@LadyKennington) is a conservative commentator. She was the research director and story editor for “2020: The Plot Against the President” and research/archive editor for “What Is a Woman?”