Competitive Enterprise Institute: Congress must use its tools to block consumer bureau's payday loan rule

Big things are happening at the Consumer Financial Protection Bureau, a recently-created but unusually powerful government agency. Now temporarily headed by Trump's Director of the Office of Management and Budget Mick Mulvaney, the Bureau suddenly announced last week it would reopen the Obama-era rule that effectively blocks access to small dollar loans for millions of consumers.

But how much can Mulvaney achieve by revisiting the rule? It's true that left intact, the rule will deprive too many people of a loan, right at the moment they need it most. It's one of the most detrimental regulations the Bureau has issued. But the rule cannot be easily or quickly undone. A new rulemaking is governed by the Administrative Procedure Act, which requires the Bureau to go through a similar process as it did the first time around. The original rule took the Bureau five years to finalize.

There's a simpler, more effective way of stopping the current rule. Congress can vote it down, but a big deadline is looming. The Congressional Review Act gives lawmakers 60 legislative days to overturn major regulations, and a simple majority vote by both chambers is all that is required. If successful, that vote would block the agency from doing a repeat without congressional authorization. A resolution of this kind was recently introduced by Rep. Dennis Ross' (R-Fla.), with 3 Democrats and 2 Republicans co-sponsoring it. The CRA, however, must be used by early March.

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