Senate Moves to Abolish the CFPB

About 2 min

Senate Moves to Abolish the CFPB

It is short and sweet— barely two pages long. Senator Ted Cruz (R-Texas) and four other senators introduced a bill that would repeal Title X in the Dodd-Frank Wall Street Reform and Consumer Protection Act. By repealing it, the Consumer Financial Protection Bureau (CFPB) would literally disappear. The final line of what’s being called the “Repeal CFPB Act” actually says that it will be “as if the Act had not been enacted.”

The five senators say the CFPB does not live up to its name. They say it does little to actually protect consumers; instead, they say it grew in power and magnitude under the last administration without any accountability to Congress or the people. They say the Bureau has stunted economic growth, especially for small businesses, through regulatory blockades and financial activism. Representative John Ratcliffe (R-Texas) proposed identical legislation in the House.

So, what does this have to do with the background screening industry?

When the CFPB was created in 2010, they became a regulating agency for the industry. Several rulemaking and enforcement powers that had been held by the Federal Trade Commission (FTC) were transferred to the new agency. The goal was for the CFPB to intensely scrutinize financial activity. Since the screening industry is covered by the Fair Credit Reporting Act (FCRA), it fell under the new agency’s purview.

If the proposed bill becomes law, oversight of the background screening industry will revert to the FTC. While that would mean a dramatic increase of work for the agency, there is little that would change in the screening world. The FCRA still must be followed to the letter, and failure to do so could end with an investigation and large fines.

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