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Ted Cruz introduces bill to abolish CFPB

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Conservative calls the consumer bureau an "out-of-control bureaucracy." (AP Photo/Evan Vucci, File)

Texas conservative Sen. Ted Cruz on Tuesday introduced legislation to "abolish" the Consumer Financial Protection Bureau, highlighting the threat to the agency from the Right.

Cruz called the CFPB, created by President Barack Obama's 2010 financial reform law as the brainchild of Elizabeth Warren before her election to the Senate, an "out-of-control bureaucracy."

His legislation, he said, would give Congress "the opportunity to free consumers and small businesses from the CFPB's regulatory blockades and financial activism, which stunt economic growth."

Cruz's legislation, introduced with Republican Rep. John Ratcliffe of Texas in the House, goes further than legislation being formulated by the House Financial Services Committee. Neither Cruz nor Ratcliffe is on the banking committee in their respective chamber.

In a recent Wall Street Journal op-ed, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said it would not be possible to overcome a Democratic filibuster to abolish the bureau. Instead, he called for the agency to be "functionally terminated" through a roundabout legislative process using a budget tool that provides for passing legislation with a simple majority in the Senate.

Nevertheless, Cruz's legislation highlights the array of possible changes facing the new agency from the unified GOP government.

Also on Tuesday, Sen. Mike Rounds, R-S.D. introduced legislation that would, according to his office, "dismantle" the agency by denying it funding through the Federal Reserve, which currently provides its funding, and preventing it from keeping any fines it collects from businesses.

Another possible threat to the consumer bureau is that of President Trump trying to fire its Obama-appointed director, Richard Cordray, and appointing instead a regulator more aligned with Republicans.