(Reuters) – U.S. Republican lawmakers are planning a crackdown on U.S. consumer and securities watchdogs in hopes they will seize control of a key congressional committee after November’s midterm elections, according to a dozen financial lobbyists, members of Congress and lawmakers.
With an 80% chance the House of Representatives will come under Republican control, according to polling-tracking website FiveThirtyEight.com, Republicans on the House Financial Services Committee are planning investigations into the Consumer Financial Protection Bureau and Securities and Exchange Commission, the sources said.
They allege the agencies, which have operated under Democratic leadership since January 2021, have overstepped their authority, flouted the legal rule-writing process and taken a hostile stance toward the industries they regulate.
Democrats say the agencies are just fulfilling their mandate to protect investors and consumers.
Republican lawmakers have already begun requesting information and documents from agencies, sources and public letters say, but with House oversight, they will be able to issue subpoenas and compel the public to testify.
At a minimum, such investigations can absorb hundreds of man-hours and make agencies more vulnerable to private litigation, lobbyists and analysts have said.
Key efforts that could be blocked or scaled back include the CFPB’s offer to cut a range of bank fees and boost competition, and the SEC’s proposed rules on corporate climate risks and the agency’s crackdown on cryptocurrency companies.
“A new day is coming,” Tom Emmer, the senior Republican on the House finance panel’s Oversight and Investigations Subcommittee, said in an interview, adding that the two agencies are not being held accountable by Democrats. . “Once we have the power to subpoena, once they have to listen to us, aggressive congressional oversight will only strengthen our system of government.”
Other prominent Republicans are stepping up the pressure on the agencies, including Rep. Patrick McHenry, who will likely chair the House Finance Committee if the chamber flips, and Rep. Blaine Luetkemeyer, also, according to letters and public sources. senior member of the House Committee.
A spokesperson for Mr. McHenry did not respond to requests for comment. Mr. Luetkemeyer’s office could not immediately provide comment.
CFPB Director Rohit Chopra and SEC Chairman Gary Gensler are prime targets because of their ambitious agendas and tough enforcement stances, which have prompted pushback from industry groups. The groups have urged Republicans to rein in the agencies and identify issues they think lawmakers should pursue.
The U.S. Chamber of Commerce, for example, has filed public records requests with the CFPB seeking information on, among other issues, its ties to outside political groups; its enforcement relationships with state attorneys general; and Mr. Chopra’s role in a December bid by Democrats to the board of the Federal Deposit Insurance Corporation to bypass the agency’s then-Republican chairman in an effort to tighten bank merger rules.
That December fracas will likely be the focus of Republicans, along with Mr. Chopra’s review of fees charged by lenders on credit cards, overdrafts and bounced checks, Emmer and lobbyists said.
“We will focus on what we believe are necessary corrective actions by congressional Republicans to investigate the actions of the CFPB,” said Neil Bradley, executive vice president of the Chamber of Commerce, the largest trade group from the country.
Mr Chopra told Reuters last month that he and his team had met with “hundreds” of financial firms to guide their thinking and that he hoped to find common ground with Republican lawmakers. “It’s important, no matter who’s in the seat, that people are looking to find areas where they can work together,” he said in an interview.
Republicans also have their sights set on a proposed SEC rule requiring public companies to disclose climate-related risks, including greenhouse gas emissions, which business groups say is too onerous. and exceeds the authority of the agency.
The proposal is part of what they and their Republican allies call a sweeping assault on U.S. financial markets by Mr. Gensler, who has pursued more than 30 regulations, while leaving little time for the industry to digest them. and respond to it.