Business of Insurance Regulatory Reform Act of 2025

Bill Number

H.R. 4735

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-07-23: Referred to the House Committee on Financial Services.

Last Updated

2026-02-10T09:05:51Z

AI-Generated Summary

Purpose of the Legislation

The "Business of Insurance Regulatory Reform Act of 2025" (H.R. 4735) aims to clarify the limits on the federal Bureau of Consumer Financial Protection's (CFPB) authority over individuals or entities regulated by state insurance regulators. It seeks to prevent federal overreach into state-regulated insurance activities while maintaining consumer protections in non-insurance financial products.

Key Provisions

• Amendment to Section 1027(f) of the Consumer Financial Protection Act of 2010 (CFPA):
• Renames and restructures paragraph (2) to emphasize "Exceptions" to CFPB authority, specifying that the bureau's general enforcement powers (under paragraph (1)) do not apply broadly to state-regulated insurance entities.
• Adds a new subparagraph (B) under paragraph (2) with two limitations:
• If a state-regulated person offers a consumer financial product or service while engaged in the "business of insurance" (e.g., selling insurance policies), the CFPB cannot enforce the CFPA against them for those insurance activities.
• For specific consumer protection laws enforced by the CFPB (known as "enumerated consumer laws" or laws transferred to it under subtitles F or H of the Dodd-Frank Act), the CFPB's enforcement authority must be "narrowly construed" (interpreted strictly and limited) when the person is involved in insurance activities.
• Introduces a new paragraph (4): A "rule of construction" requiring that CFPA enforcement be interpreted broadly in favor of state insurance regulators' authority over regulated persons.

Significant Changes to Existing Law

• Limits Federal Authority: Previously, the CFPA granted the CFPB broad powers to oversee consumer financial products, including some overlap with insurance. This bill explicitly carves out exceptions for state-regulated insurance activities, reducing CFPB jurisdiction where states already regulate.
• Shifts Interpretive Balance: The new rule of construction prioritizes state regulators over federal ones in cases involving insurance, altering how ambiguities in the law are resolved. This is a departure from the CFPA's original emphasis on strong federal consumer protection.
• No Broader Repeals: The changes are targeted amendments to one section (1027(f)) and do not alter other CFPB functions or authorities unrelated to insurance.

Potential Impacts

• On Government Agencies: Strengthens state insurance departments by affirming their primary role, potentially reducing CFPB workload and enforcement actions in insurance-related matters. The CFPB may need to coordinate more closely with states to avoid overstepping.
• On Citizens: Consumers could see more consistent state-level oversight for insurance products, but it might limit federal interventions in cases where insurance intersects with financial services (e.g., credit insurance). This could lead to varying protections across states.
• On International Relations: No direct impacts, as the bill focuses on domestic U.S. regulatory authority.

Main Stakeholders Affected

• State Insurance Regulators: Gain enhanced authority and deference, allowing them to handle insurance oversight without federal interference.
• Insurance Companies and Regulated Entities: Benefit from clearer boundaries, reducing the risk of dual federal-state regulation and potential CFPB enforcement for insurance activities.
• Bureau of Consumer Financial Protection (CFPB): Faces restricted jurisdiction, which may streamline operations but limit its role in protecting consumers from insurance-related financial harms.
• Consumers: Indirectly affected through potential changes in how complaints or violations in insurance-financial overlaps are handled, with more reliance on state agencies.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Reinforces the principle of federalism (division of power between federal and state governments) by limiting federal authority under the CFPA, potentially reducing litigation over jurisdictional overlaps. The "narrowly construed" language could lead to court challenges on enforcement scope.
• Constitutional Implications: Aligns with the 10th Amendment's reservation of powers to states, emphasizing state control over traditional areas like insurance regulation (as upheld in cases like United States v. South-Eastern Underwriters Association, 1944, which clarified Congress's role but preserved state primacy).
• Political Implications: Supports deregulation efforts in financial services, favoring state autonomy over centralized federal control. Introduced by Republican representatives, it reflects ongoing debates on CFPB powers post-Dodd-Frank Act, potentially influencing broader reforms to consumer protection laws.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Steil, Bryan [R-WI-1]

Cosponsors (6)

Rep. Barr, Andy [R-KY-6], Rep. Meuser, Daniel [R-PA-9], Rep. Huizenga, Bill [R-MI-4], Rep. Fitzgerald, Scott [R-WI-5], Rep. Nunn, Zachary [R-IA-3], Rep. Williams, Roger [R-TX-25]

Recent Actions

• 2025-07-23: Referred to the House Committee on Financial Services.
• 2025-07-23: Introduced in House
• 2025-07-23: Introduced in House

Bill Versions

• Business of Insurance Regulatory Reform Act of 2025 — issued 2025-07-23 — PDF (3 pages)