Vought says CFPB ‘remains structurally defective’ in fiery House hearing

As acting director nears end of his role, he tells committee ‘I do not believe it should exist in its current form’

Vought says CFPB ‘remains structurally defective’ in fiery House hearing

As acting director nears end of his role, he tells committee ‘I do not believe it should exist in its current form’

Russell Vought’s time as acting director of the Consumer Financial Protection Bureau is nearing its end, but it’s not ending quietly.

The interim head of the CFPB spent three hours before the House Committee on Financial Services on Wednesday. It was the first of two days of congressional grilling — he will appear before the Senate Banking, Housing and Urban Affairs Committee on Thursday — after his 17 months of trying to downsize the bureau.

During his opening statement, Vought argued that the bureau had been going down a “destructive path” and that “regulations should be justified by the statute, not the whims of ideologues at the Bureau.”

He also told the committee that “the bureau remains structurally defective, and I do not believe it should exist in its current form.”

Vought’s tenure as the acting director will end on August 1. President Donald Trump has nominated Brian Johnson to helm the agency for a five-year term, though the Senate has not yet scheduled a confirmation hearing. If Johnson is not confirmed by August 1, Bloomberg has reported that CFPB Chief Legal Officer Mark Paoletta will be appointed as the bureau’s Deputy Director.

Wednesday’s hearing was Vought’s first time appearing before Congress on behalf of the CFPB, and 24 Democrats on the 54-person committee came out aggressively.

Committee Chair French Hill, R-Ark, stated “the CFPB has often allowed ideology to drive its policymaking, resulting in burdensome regulatory overreach.”

Hill said the committee was advancing a comprehensive set of CFPB reforms to “establish durable guardrails that outlast any single Director or administration by clarifying the CFPB’s statutory authorities, strengthening due process, restoring transparency, promoting coordinated and risk-based supervision, and preventing regulation by enforcement.”

Maxine Waters, D-Calif., is the committee’s ranking member. She opened her comments by scolding Vought for avoiding committee Democrats’ attempts to get answers.

“You’ve been hiding while unlawfully trying, and thankfully failing, to dismantle the nation’s top consumer watchdog,” Waters told Vought. “I’ve never delighted in someone’s failure more than I have delighted in yours.”

Andy Barr, R-Ky., said he would have voted against the Dodd-Frank Act — the legislation that formed the bureau — had he been a member of Congress in 2010 when it became law. He listed issues he had with the CFPB’s powers, including its ability to issue a formal, investigational subpoena known as a Civil Investigative Demand (CID). The tool is used to compel businesses and individuals to cooperate during investigations into potential violations.

Barr told Vought that under the previous CFPB director, Rohit Chopra, the CID process was a fishing expedition.

“There was no requirement that they had to actually identify suspected illegal conduct,” Barr said. “They just went in and they harassed law-abiding American companies and bankrupted them with this Gestapo tactic.”

The hearing continued with members addressing or questioning Vought, who remained calm before the committee. By the end, Waters requested a subpoena to compel his testimony again during this session of Congress. A motion to table the subpoena resolution passed, but not before a warning from Waters had already been laid out.

“Director Vought, you should preserve all of your emails, text messages, and other forms of communication with respect to your CFPB work, while you may also wish to be done if a new director is confirmed to the CFPB,” she cautioned. “Let me be clear, we are not done with you.”

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