Although the Trump Administration has largely been silent with respect to Dodd-Frank and the future of the CFPB, some members of Congress have been very active in proposing significant legislative changes. Several measures to reform the agency are pending in the House and Senate. These bills can generally be broken down into two categories. The first category includes measures that would eliminate the CFPB entirely, either through outright repeal or defunding. The second category includes more modest reforms that would leave the CFPB in place, but dramatically restrict its scope and influence.

Senator Ted Cruz recently introduced S. 370, the entire substance of which states: “The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is repealed, and the provisions of law amended or repealed by that Act are restored or revived as if the Act had not been enacted.” Representative John Ratcliffe of Texas introduced an identical bill in the House of Representatives.

Although the text of these bills appears straightforward, actual implementation would be an administrative nightmare. All of the rules and regulations passed by the CFPB would have to be unwound, which would require courts, compliance attorneys, and industry to determine what the current state of the law would be had the CFPB never existed. Additionally, the CFPB has entered into dozens of consent orders, almost all of which contain prescriptive injunctive relief. Some of these consent orders were entered into directly with the CFPB, but others were entered by federal courts. Presumably, parties who entered into administrative consent orders with the CFPB would be relieved of their future obligations under them. But the impact on consent orders entered by a federal court is less certain. Those orders are final judgments of an Article III court, and violations thereof are subject to the court’s authority to enforce its orders and judgments. The injunctive provisions of such orders would arguably remain in place, although there might not be another agency or individual with standing to bring a motion to enforce them.

Other recent proposals are aimed at diminishing the CFPB’s role by starving the Bureau of funding. The CFPB receives its primary funding through the Federal Reserve, and is thus outside the appropriations process to which most other federal agencies are subject. Senator Mike Rounds of South Dakota introduced a bill that relates to the mechanics of this funding process.

First, the bill would amend Title X of Dodd-Frank to remove the CFPB’s primary funding mechanism, which is the transfer of funds from the Federal Reserve Board. Currently, under Section 1017 of Title X, the Director of the CFPB must determine an amount “reasonably necessary to carry out the authorities of the Bureau,” and the Federal Reserve then transfers this amount, subject to a funding cap. The proposed bill would remove this mechanism for funding the Bureau.

Second, the bill would establish a “Civil Penalty” fund to be maintained by the Federal Reserve. The bill would require that all civil penalties obtained by the CFPB in judicial or administrative actions be deposited in that fund, and any amounts in that fund would in turn be transferred to the general fund of the U.S. Treasury.

Senator Fischer of Nebraska introduced a bill that would replace the CFPB’s single director structure with a five-member, bipartisan commission. A five-member commission was a key feature of the original version of the CHOICE Act, introduced in the House. In a significant departure, however, Chairman Hensarling proposed retaining the single director structure in a memorandum addressing several modifications to the CHOICE Act.

Finally, Senator Perdue of Georgia introduced the Consumer Protection Bureau Accountability Act of 2017, which also aims to reform the manner in which the CFPB receives its funding. This bill would make the CFPB subject to Congressional appropriations. The goal of the bill is to allow greater Congressional oversight of the CFPB by allowing Congress to control the CFPB’s funding. This bill appears to be the most shovel-ready of all of the CFPB reform measures, as it proposes a single, discreet change that: 1) only impacts the CFPB’s future operations; and 2) replaces the CFPB’s unconventional funding mechanism with the regular Congressional appropriations that fund most federal agencies.