U.S. House Financial Services Committee reviews CFPB reforms as acting director backs appropriations funding and risk based supervision

The U.S. House Financial Services Committee held a hearing with Consumer Financial Protection Bureau Acting Director Russell Vought on the agency’s semi-annual report, current reforms and possible legislative changes. The main policy signal from the hearing was Vought’s call to place the CFPB under the congressional appropriations process, which he described as the most important structural reform for improving accountability and transparency. Committee Republicans also used the hearing to question whether the bureau’s prior approach had increased borrowing costs, reduced credit availability and moved beyond its statutory role. Vought said the bureau is changing how it supervises and enforces the law. He said supervision now seeks to avoid overlap with other regulators and is being conducted with greater transparency, including a required "Humility Pledge" read at the start of examinations. He also said enforcement is being guided by new principles focused on actual consumer harm, due process, collaboration where appropriate and efficiency. Members discussed a more risk-based supervisory model, under which institutions with strong compliance systems, cooperative track records and lower-risk business models would face less intensive oversight than firms with repeated compliance failures or evidence of consumer harm.