The U.S. House Committee on Financial Services has requested public feedback on a discussion draft of legislation to reform the structure and powers of the Consumer Financial Protection Bureau. The draft is framed around a broad reset of how the CFPB is funded, governed and supervised, while also narrowing areas where the committee sees legal uncertainty or regulatory overlap. The draft would bring the CFPB under the congressional appropriations process, change the use of civil penalty funds, strengthen cost-benefit analysis and small business impact assessments for rulemakings, require periodic retrospective reviews of major rules and create a dedicated CFPB Inspector General. It would also clarify statutory authorities, especially around unfair, deceptive, or abusive acts or practices, add procedural safeguards for enforcement actions, clarify statutes of limitations and define jurisdictional boundaries involving attorneys and state-regulated insurance companies. Other provisions would address regulatory barriers to innovation by clarifying treatment of certain small-dollar loan products offered by depository institutions and requiring agencies to distinguish non-binding guidance from enforceable requirements. On supervision and enforcement, the draft would adjust supervisory thresholds for banks and credit unions, allow certain institutions to elect prudential regulator supervision and examination for consumer compliance, strengthen coordination among regulators, tighten the CFPB’s authority to supervise nonbanks and reduce reliance on enforcement to set policy through changes to civil money penalties, market monitoring authorities, indexed regulatory thresholds and complaint procedures.

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