It's not a fringe idea in itself but in the context it's a talking/advocacy point that is a foundational building block of something quite different. I wish I knew more about spotted owl or food labeling matters so I don't have to use such overwrought examples so excuse/bear with me:
'states rights' is in itself not a fringe idea but at the time it was deployed entirely to advocate against federal civil and voting rights legislation - that was the goal, rather than a desire to debate the nature of the federal structure of the United States. 'Patient safety' is similarly deployed with the goal of restricting reproductive rights.
'Congress should spell it out' is precisely in that vein - its goal is the structural defanging of the federal regulatory regime. To my mind, that's a fairly conventional, mainstream analysis rather than than some lefty fever dream of mine. In this particular case especially - I think (if I'm remembering this right) both houses of Congress took the matter under consideration and neither brought it to a vote.
More important to me, though, is that CFPB is essentially the DHS of finance (a Voltron agency that centralizes a bunch of random oversight authorities that already existed) and neither the CFPB's enacting legislation (in Dodd-Frank) nor any of the extent authorities CFPB draws on appear to give it the authority to effectively end payday lending.
I think it's fair game for the party that (1) controls the CFPB now and (2) was already and (often) in good faith opposed to regulatory-state-creep and (3) definitely opposed to the idea of a nationwide ban on payday lending given that this issue is already aggressively litigated in the states to then say "the previous CFPB was really reaching when they tried to quietly eradicate most payday lending, and now that we've taken over, we're not going to push the ball to the end zone on that attempt".
To me: a good reason not to vote for Republicans! But not a good example of how this administration is breaking norms or rules. And there are so many real examples of that!
I'm only really irritated by the argument that this policy change was brought about by payday lending lobbyists, as if mainstream Republican thought didn't already say "consumers should have the freedom to purchase financial services they think they need". It's not even hard to make that argument colorable: you have terrible credit, live paycheck-to-paycheck (like most Americans), have an unexpected expense, pay it, and a week later find out you're going to have your electricity turned off. Without payday loans, a lot of Americans in this (common) scenario are S.O.L. This is what Rayiner was saying when he said the old CFPB attempt was addressing the symptoms and not the problem.
I don't fully agree with this argument! But I can't easily shoot it down.
I don't think the specifics are some glaring example of trumpian norm-breaking or corruption or whatnot, either.
There's also a broad partisan split on the question of how much new authority the CFPB actually has for regulating non-banks. One view of the CFPB is that its regulatory authority (as opposed to its supervisory authority, which is expansive) is derived primarily from the previous agencies it consolidates, none of whom had a charter to end payday lending. So another way to look at this is, it's within CFPB's charter to use its authority to collect data unfavorable to payday lenders and then write a report about how terrible payday lending is, but it remained up to Congress to rely on that report to impose a federal ban on the practice.
The overarching point is that this isn't so much a distinct feature of Trumpian corruption, so much as simply a predictable consequence of Republicans controlling the executive branch.