Ted Cruz, Byron Donalds take action to eliminate federal agency

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FIRST ON FOX: Sen. Ted Cruz, R-Texas, and Rep. Byron Donalds, R-Fla., are unleashing an effort to eliminate the Consumer Financial Protection Bureau (CFPB).

The lawmakers are introducing a bill Thursday to repeal the Consumer Financial Protection Act that created the agency and restore federal laws "as if the act had not been enacted," according to a copy of the bill obtained by Fox News Digital. Since it was established in 2010, Republican lawmakers and financial groups have criticized the CFPB as an unnecessary agency.

"The CFPB is an utter and complete waste of government spending and should be eliminated," Cruz, who is the ranking member of the Senate Commerce Committee, told Fox News Digital in a statement. "It is entirely ineffective and does very little to protect consumers."

"The only purpose of this sham, Obama-mandated organization is to stifle economic growth by enforcing burdensome, unnecessary economic regulations," he continued. "The last thing our economy needs under Bidenflation is further hindrance by government bureaucrats. Ending the CFPB will spur economic growth at a time when Texans and Americans sorely need it."

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Sen. Ted Cruz, R-Texas, speaks at a Senate Commerce Committee hearing on March 1, 2023. (Anna Moneymaker/Getty Images)

The CFPB was founded after the Great Recession of 2008 and designed to serve as a financial sector watchdog. According to its website, the CFPB was created, in part, to "increase accountability in government by consolidating consumer financial protection authorities that had existed across seven different federal agencies into one."

"Consumer financial protection had not been the primary focus of any federal agency, and no agency had effective tools to set the rules for and oversee the whole market," the CFPB states. "The result was a system without effective rules or consistent enforcement. The results can be seen, both in the 2008 financial crisis and in its aftermath."

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Sen. Elizabeth Warren, D-Mass., is often credited with establishing the agency. She first proposed it in 2007 when she was a Harvard Law School professor, and former President Barack Obama later appointed her to serve as a White House adviser with the task of overseeing the CFPB's formation in late 2010.

Sens. Mike Lee, R-Utah, Kevin Cramer, R-N.D., John Barrasso, R-Wyo., and Rand Paul, R-Ky., joined Cruz in introducing the Repeal CFPB Act on Thursday.

Cruz first attempted to repeal the CFPB in 2015 and has since led several similar efforts.

Rep. Byron Donalds, R-Fla., introduced companion legislation of Cruz's Repeal CFPB Act in the House. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

"Look no further than the CFPB for the epitome of the Washington Swamp: an unconstitutional, unaccountable, and overreaching government agency with no Congressional oversight," Donalds told Fox News Digital in a statement. "In addition to the drain of federal resources, the CFPB hinders economic prosperity by imposing burdensome and unnecessary regulations on American consumers.

"It’s high time to eliminate the CFPB once and for all and ease the overarching financial restraints established by Dodd-Frank that permitted unfettered power to unelected activists and the obstruction of fiscal ingenuity and growth."

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Meanwhile, the Supreme Court agreed in February to hear arguments in a case involving the constitutionality of the CFPB. Last year, the U.S. Court of Appeals for the 5th Circuit ruled that the agency's funding structure was unconstitutional since Congress delegates its appropriations power to the CFPB, thereby violating the Constitution's separation of powers clause.

Oral arguments for the case are expected to take place in the fall and a decision is expected in 2024.