S
enate Republicans, led by Ted Cruz, have introduced a bill to defund the Consumer Financial Protection Bureau (CFPB), a watchdog agency that oversees mortgages and financial products. This is not the first time Cruz has targeted the CFPB; he's been trying to dismantle or diminish it for years without success. However, with the Trump administration reshaping the federal government, Cruz is now proposing a new approach: cutting off its funding.

    The CFPB was created after the 2008 financial crisis to protect consumers in the financial marketplace. It regulates and enforces rules related to mortgages, credit cards, and other consumer financial products, fields complaints, and offers educational resources. The agency is funded by the Federal Reserve.

    Cruz's proposal, known as the "Defund the CFPB Act," would require the Fed to transfer $0 to the CFPB. Republicans hold a slim majority in the Senate, but passage is not guaranteed; they would need to use budget reconciliation to approve the change with a simple majority rather than 60 votes.

    Cruz argues that the CFPB is an "unelected, unaccountable bureaucratic agency" that imposes burdensome regulations on businesses and banks. Elon Musk has also expressed opposition to the CFPB, suggesting it should be deleted.

    However, allies of the CFPB argue that gutting the agency would invite exploitation by financial institutions. The CFPB has recovered nearly $20 billion through enforcement actions, making it "the most effective protector of working-class wallets in modern American history."