With the CFPB Being Dismantled, Who’s Policing The Big Banks? | Global News Avenue

As the administration’s consumer regulator withdraws from work under the White House order, Democratic lawmakers want to know: Who runs the bank?

this Consumer Financial Protection Bureau (CFPB) Regulatory financial institutions and conduct regular inspections to violate any consumer protection laws. The bureau found himself in the crosshair this week as budget director Russell Vourch Order the office to closeits employees stopped working and asked their budget to drop to $0.

Fed Chairman Jerome Powell told regulators that no other federal regulators hold the position. The Senate Finance Committee raised questions after Powell issued two reports on monetary policy to Congress.

The Fed funded the CFPB under the regulations that created the bureau, but the institution was independent of the central bank.

CFPB battle

Powell’s hearing became a flash point in the future battle of CFPB. Republicans have long criticized the institution as a business barrier, while Democrats advocate for the institution to investigate misconduct by banks and other financial institutions.

The Republicans noted at the hearing that the Consumer Protection Act remains in effect and that other bank regulators, including the Federal Reserve, are still able to inspect banks. They also said the banking sector could respond to consumer complaints and fraud reports.

Democrats argue that eliminating the CFPB will leave a huge gap in consumer protection laws. this Dodd-Frank ActThe bureau was established to make it the main body responsible for the execution of consumer protection and the only person to conduct the exams, looking for wrongdoing against consumers.