April 27, 2026 10:11AM # What We Can Learn from the CFPB’s Strategic Plan for the Very Short Run By [Solveig Singleton](https://www.cato.org/people/solveig-singleton) --- SHARE Listen to this article Generated with [ ElevenLabs](https://elevenlabs.io/) AI technology. Loading the [Elevenlabs Text to Speech](https://elevenlabs.io/text-to-speech) AudioNative Player... ![cfpb consumer](/sites/cato.org/files/styles/pubs_2x/public/2025-07/CFPB.jpg?itok=ZNVYuQRV) The Consumer Financial Protection Bureau (CFPB or the “Bureau”) recently [issued](https://files.consumerfinance.gov/f/documents/cfpb_draft-strategic-plan_fy2026-2030.pdf) a new strategic plan. It offers laudable goals such as following the law, ending overregulation, and focusing on tangible consumer harms. But *why* has the Bureau declined to follow the law, failed to [consistently complete](https://files.consumerfinance.gov/f/documents/cfpb_taskforce-federal-consumer-financial-law_report-volume-1_2022-01_amended.pdf) cost-benefit analyses, and lost its core focus on fraud? The plan flags the right problems but does not discuss the root causes. Until these root causes are addressed, changes made now can easily be reversed by a new administration. Only legislators can fix the problem by making far-reaching and fundamental statutory reforms. **CFPB’s Strategic Plan Offers Laudable Goals** The strategic plan emphasizes that the Bureau will focus on “tangible” harms—namely, concrete harms that a court would traditionally recognize, including financial losses that a victim of fraud can prove by producing evidence such as receipts. By contrast, tangible harms do not include [presumed](https://www.paulweiss.com/insights/client-memos/cfpb-issues-policy-statement-taking-expansive-view-of-abusive-practices) injuries ([described](https://www.mofo.com/resources/insights/230424-take-2-cfpb-provides-new-guidance) by the Bureau in 2023) or dignitary harms ([described](https://www.arnoldporter.com/-/media/files/perspectives/publications/2022/03/arnold--porter-redline--udaap-procedures.pdf) by the Bureau in 2022). Why should enforcers *not* target emotional, dignitary, or presumed harms? Enforcement resources are scarce, and regulatory activities burden the whole economy. Therefore, the public sector prioritizes measurable and clear violations of established rights, that is, those corresponding to traditional concrete harms. By contrast, idealistic regulators do more harm than good when they try to rid the world of ill-defined or hard-to-measure subjective or abstract injuries. For example, the burden imposed by regulatory intervention (ultimately passed on to consumers) will often be disproportionate to the harm of a “presumed” injury. The strategic plan also declares that the Bureau will henceforth stay within its statutory mandate—that is, the CFPB will follow the law. Historically, the Bureau has too often [ignored](https://storage.courtlistener.com/recap/gov.uscourts.txnd.387342/gov.uscourts.txnd.387342.150.0.pdf) clear statutory provisions. Ironically, the strategic plan itself does not [follow](https://www.law.cornell.edu/uscode/text/12/5514#a_1_C) the law in proposing that supervision will focus on depository institutions (e.g., banks) rather than non-depository institutions (e.g., mortgage brokers). The strategic plan additionally declares the Bureau’s intention to rid financial services of overregulation and assess the costs and benefits of regulations. These three examples of policies set out in the Bureau’s plan are laudable. But why has the Bureau not followed these policies consistently? Sadly, the Bureau was built for overreach. **The Statutory Origins of CFPB Overreach** The CFPB was designed to be a super-independent agency, lacking the usual checks and balances. This has not worked out well. - The Bureau’s funding comes from the Federal Reserve, not from congressional appropriations. The Bureau’s creators [intended to double-insulate](https://www.bu.edu/rbfl/files/2013/10/Levitin.pdf) the agency from the influence of financial firms acting through Congress. Alas, instead, the CFPB has been influenced by trial lawyers and well-meaning activists, including some who [oppose](https://files.consumerfinance.gov/f/documents/cfpb_hall_written-statement_symposium-cost-benefit-analysis.pdf) the cost-benefit analysis the law [requires](https://www.law.cornell.edu/uscode/text/12/5512) the Bureau to conduct. - The CFPB is headed by a sole powerful director, not by a multimember bipartisan commission. Legislators intended to [empower](https://www.huffpost.com/entry/banking-industrys-attempt-weaken-cfpb_b_8340792) the Bureau to take strong measures quickly. Commissions are deliberative and apt to consider and compromise—and usually [include](https://www.bu.edu/rbfl/files/2013/10/Levitin.pdf) members skeptical of regulation. Consequently, the CFPB favors regulation to such an extent that it may [disregard](https://storage.courtlistener.com/recap/gov.uscourts.txed.235173/gov.uscourts.txed.235173.52.0_1.pdf) the law. The Bureau is often [described](https://democrats-financialservices.house.gov/news/documentsingle.aspx?DocumentID=412957#:~:text=Republicans%20are%20defunding%20the%20police%2C%20by%20stripping%20funding%20for%20the,sensitive%20data%20about%20his%20competitors.) as the “[cop on the beat](https://www.washingtonpost.com/news/wonk/wp/2014/01/11/a-watchdog-grows-up-the-inside-story-of-the-consumer-financial-protection-bureau/),” but this metaphor casts financial service firms in the role of burglars. It represents a sadly [oversimplified](https://substack.com/@jasonpargin/note/c-168870249) understanding of the policy problems in financial services. **The Strategic Plan Flags Problems, Congress Needs to Find Solutions** The CFPB’s creators [cited lists](https://www.consumerfinance.gov/about-us/newsroom/testimony-of-elizabeth-warren-before-the-committee-on-oversight-and-government-reform/) of the reports that the Bureau must make as evidence that, despite its power to ignore skeptics, the Bureau is accountable. But one cannot have both. An agency cannot be insulated from skeptics *and* be meaningfully accountable. The Bureau is not living up to baseline expectations. The CFPB’s strategic plan can reduce the damage the Bureau does in the very short run. But only Congress can repeal or amend the Dodd–Frank Act to fix the problem for good. ##### Related Tags [Banking and Finance](https://www.cato.org/banking-finance), [Regulation](https://www.cato.org/regulatory-studies), [Other Government Agencies and Programs](https://www.cato.org/other-government-agencies-programs-0), [Center for Monetary and Financial Alternatives](https://www.cato.org/center-monetary-financial-alternatives) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).