House Financial Services chair: CFPB is an unelected 'dictator' that must be stopped

Rep. Hensarling: We want a Fed dedicated to a monetary policy
Rep. Hensarling: We want a Fed dedicated to a monetary policy

The Consumer Financial Protection Bureau is a "rogue agency," unaccountable for its wide-ranging actions and must be overhauled, Rep. Jeb Hensarling, R-Texas, told CNBC on Thursday.

"We have set up, basically, a dictator," Hensarling told "Squawk on the Street."

"Now, some would argue he's a benevolent dictator, but no person in America, particularly an unelected person, should have the power, unilaterally, to decide what credit cards should go in our wallet, whether or not we can have a mortgage, and whether or not, if we like our banker, we can keep her," the House Financial Services chairman continued.

The CFPB had no immediate response to CNBC's request for comment.

The bureau was created in 2010 as part of the Dodd-Frank reform put in place by the Obama administration as a response to the financial crisis.

The bureau's stated mission is "to make consumer financial markets work for consumers, responsible providers, and the economy as a whole" and to "protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law," according to its website.

Hensarling acknowledged the importance of consumer financial protection but insisted that the CFPB is harmful because it answers to no one but itself.

"I'm not offended by having consumer financial protection in one agency, but not an agency that is unaccountable to the president, unaccountable to Congress, unaccountable to the courts, unaccountable to the American people," Hensarling said.

On Tuesday, Sen. Ted Cruz, R-Texas, and Texas Rep. John Ratcliffe introduced a one-page bill to shutter the agency.

"We would be derelict in our duty if we didn't do something about it," Hensarling contended. "And Senator Cruz's plan is certainly a valid plan, and that is simply get rid of it and start over."

Hensarling said that there are several options Congress can pursue to ensure that consumer safety remains a priority.

"One of the options we can look at is rolling our federal consumer protection enforcement into the Federal Trade Commission," another independent agency aimed at protecting consumers, Hensarling said.

Other options Hensarling cited included incorporating the CFPB's duties into that of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation or the Federal Reserve.

"[The CFPB] is damaging the most important consumer protection there is, and that is competitive, innovative, transparent markets that give Americans the freedom of choice," Hensarling said. "And so it has got to either be done away with [or] it's got to be functionally reformed and taken care of."