By Pete Schroeder and Katanga Johnson
WASHINGTON (Reuters) - U.S. Republican lawmakers are preparing a crackdown on the U.S. consumer and securities watchdogs in the expectation they will gain control of a key congressional committee following the November mid-term elections, according to a dozen financial lobbyists, congressional staffers and lawmakers.
With an 80% chance of the House of Representatives flipping to Republican control, according to poll-tracking website FiveThirtyEight.com, Republicans on the House Financial Services Committee are planning probes into the Consumer Financial Protection Bureau (CFPB) and the Securities and Exchange Commission (SEC), the sources said.
They allege that the agencies, which have operated under Democratic leadership since January 2021, have overstepped their authority, flouted the legal process for writing rules, and adopted a hostile stance toward the industries they regulate.
Democrats say the agencies are merely fulfilling their mandate to protect investors and consumers.
Republican lawmakers have already begun seeking information and documents from the agencies, according to the sources and public letters, but with control of the House they will be able to issue investigative subpoenas and compel public testimony.
At a minimum, such probes can suck up hundreds of hours of staff time and make the agencies more vulnerable to private litigation, said lobbyists and analysts.
Key efforts that could be stalled or curtailed include the CFPB's bid to curb a range of bank fees and boost competition, and proposed SEC rules on company climate risks and the agency's crackdown on cryptocurrency firms.
"A new day is coming," Tom Emmer, the top Republican on the House finance panel's oversight and investigations subcommittee, said in an interview, adding the two agencies are not being held accountable by Democrats. "Once we have the power to subpoena, once they have to listen to us, aggressive congressional oversight will only strengthen our system of government.”
Other prominent Republicans ramping up pressure on the agencies, according to public letters and sources, include Representative Patrick McHenry, who is likely to chair the House finance committee if the chamber flips, and Representative Blaine Luetkemeyer, also a senior member of the House committee.
A spokesperson for McHenry did not respond to requests for comment. Luetkemeyer's office could not immediately provide comment.
CFPB Director Rohit Chopra and SEC Chair Gary Gensler are top targets due to their ambitious agendas and tough enforcement stances, which have sparked pushback from industry groups. The groups have urged Republicans to rein in the agencies and are identifying issues they believe lawmakers should probe.