Hensarling praises DeVos decision to end partnership with consumer bureau

Hensarling praises DeVos decision to end partnership with consumer bureau
© Greg Nash

The chairman of the House Financial Services Committee is thanking Education Secretary Betsy DeVosBetsy DeVosMnuchin, Pompeo mulled plan to remove Trump after Jan. 6: book Republicans look to education as winning issue after Virginia successes McAuliffe rolls out new ad hitting back at Youngkin on education MORE for scaling back her department’s relationship with the Consumer Financial Protection Bureau (CFPB).

Rep. Jeb Hensarling (R-Texas) in a letter to DeVos on Sunday praised her for ending agreements with the CFPB to assist the department in its crackdown on predatory student lenders. Hensarling, one of the CFPB’s top critics, called DeVos’s decision “necessary and appropriate” to curb the consumer bureau's “overreach into the education field.”

The Education Department cancelled agreements with the CFPB in August, claiming the bureau “unilaterally expand[ed] its oversight role to include the Department’s contracted federal loan servicers.” The department called CFPB's actions “characteristic of an overreaching and unaccountable agency.”

The CFPB pushed back on DeVos’s claims and said the Education Department hadn’t expressed concerns before canceling the partnership. CFPB Director Richard Cordray defended his agency’s work in a lengthy response to DeVos, asking her to reconsider the decision.

Hensarling, who leads the House effort to curb the CFPB’s power and independence, said that the bureau acted beyond its jurisdiction. He called DeVos’s actions “most welcome,” and said he hoped they’d serve as an example to other federal agencies.

The CFPB, which started in 2011, was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act to police predatory lending and consumer abuse. Democrats have fiercely defended the consumer bureau, while Republicans say it oversteps its boundaries and violates its independence with overbearing regulations and enforcement actions.

“Congress never authorized or intended the CFPB to be the regulator of educational services, yet the CFPB entered the field regardless,” Hensarling said. “Sadly, it is no surprise that that this unconstitutional agency routinely exceeds the limits of its jurisdiction.”