The Consumer Financial Protection Bureau (CFPB) has been called “the single most powerful and least accountable agency in American history” — a formula for abuse and bad governance. A recent report from the Council of Economic Advisors estimates that over the past 15 years, the CFPB has cost consumers $237 to $369 billion overall, increasing borrowing costs and reducing originations. These costs have been incurred with scant benefit for consumers and markets. Even though the CFPB was established to protect consumers, its lack of accountability to Congress has given the agency license to commit gross overreaches.

The role of the CFPB has expanded dramatically since its creation. An article from the R Street Institute reports that the annual spending of the CFPB has increased 650% from $123 million in 2010 to $923 million in 2025. Similarly, the number of CFPB employees climbed from 343 in 2011 to about 1,900 in 2025. Today, the CFPB continues to impose ambiguous regulations that have increased costs and diminished opportunity for consumers.

In 1787, James Madison condemned the multiplicity of laws among the states under the loose union of the Articles of Confederation. Madison wrote, “As far as laws are necessary, to mark with precision the duties of those who are to obey them, and to take from those who are to administer them a discretion, which might be abused, their number is the price of liberty. As far as the laws exceed this limit, they are … a nuisance of the most pestilent kind.”

Here, Madison explained that laws, to preserve ordered liberty, must clearly communicate the duties of the people and minimize the discretion of administrators. Any law that exceeds these limits becomes a nuisance.

Madison’s wisdom has been largely lost on rulemakers at the CFPB. Over the years, the agency has been prolific in its regulatory activities, which often are carried out according not to the black letter of statute but rather through the arbitrary judgment of bureaucrats. The Council of Economic Advisors estimates that the paperwork costs imposed by CFPB regulation “exceed 29 million hours or the equivalent of 14,100 full-time employees spending all of their time on documentation and reporting requirements.”

Further, between 2011 and 2024, the CFPB has increased borrowing costs for consumers by up to $350 billion, or more than $250 per borrower. The fiscal costs imposed by the CFPB amount to a staggering $13 billion.

Much of the CFPB’s failure to regulate competently is the result of its peculiar organizational structure. Rather than being led by a bipartisan commission like many other large regulatory agencies, CFPB is headed by a single director, who wields broad powers over a large part of the U.S. economy. In 2019, the Supreme Court ruled that this director can be removed by the president. However, this is a weak check on the CFPB, which has often served as an outlet for partisan prejudices.

Furthermore, the CFPB receives funding directly from the Federal Reserve rather than through the standard congressional appropriations process. The Supreme Court upheld this funding structure in 2024, but the Court did not affirm the prudence or efficacy of the CFPB’s funding structure. This invited Congress to use its authority to revise its process of delegating authority. And sure enough, although the CFPB’s budget was originally capped at 12% of the Federal Reserve’s overall budget, the One Big Beautiful Bill Act reduced this cap to 6.5%. Despite this reduction, the CFPB continues to wield significant authority over the financial industry with little to no oversight from Congress. Further reform to rein in the agency is badly needed.

Besides routinely exceeding its statutory authority, the CFPB’s rulemaking processes often lack proper cost-benefit analysis and result in a variety of complicated regulations and myriad unintended consequences. For example, although the Open Banking Rule attempted to make it easier for consumers to access their data, it threatened to compromise consumers’ data privacy and impose burdensome compliance costs. These costs, and similar costs of other dubious regulations pursued by the agency, must be considered by policymakers.

Although the CFPB was established to protect consumers, its lack of accountability to Congress and mission creep have harmed the American people. Many attempts have been made to reform the CFPB, but any meaningful change must begin with structural reforms that restore the agency’s narrow purpose of protecting consumers.

Lillian Kriese is a research associate at the Taxpayers Protection Alliance.