A bipartisan group of two Democrats and two Republicans in the House of Representatives introduced a bill yesterday that would replace the single director of the Consumer Financial Protection Bureau with a five-person commission.
The bill, from Reps. Dennis Ross (R-Fla.), David Scott (D-Ga.), Kyrsten Sinema (D-Ariz.), and Ann Wagner (R-Mo.), would rename the CFPB to the Financial Product Safety Commission and replace its director with a bipartisan panel.
The commissioners would be appointed by the president — with the consent of the Senate — but the president can remove a member for “inefficiency, neglect of duty, or malfeasance,” according to the proposed bill. No more than three commissioners can be from the same political party.
The bill is an effort to curb the CFPB director’s sole control over the agency’s authority; Republicans have long claimed that the bureau is too powerful. However, the bill is likely to be filibustered by Democrats who have openly protested changes to the bureau.
The CFPB, established in 2013, has issued a slew of regulations and enforcement actions against financial companies, including auto lenders, under former Director Richard Cordray. One of the most high-profile cases Cordray led was a $185 million fine of Wells Fargo & Co. for the bank’s fake checking accounts scandal in 2016. Last year, Wells Fargo Dealer Services admitted to falsely charging consumers for insurance they did not need, and Cordray has said the bureau is investigating those actions.
While many Democrats praised Cordray for oversight of lenders, Republicans contended the bureau often overstepped its boundaries.
Additionally, several associations have praised the bill, saying a five-person commission would provide more balance and stability.
“It is beyond comprehension to give a single director nearly unilateral authority over every consumer and financial institution in the country,” Richard Hunt, president and chief executive of the Consumer Bankers Association, said in a statement. “We applaud this bipartisan solution establishing a Senate-confirmed, bipartisan commission — like nearly all other regulatory agencies in the country — to bring greater stability and balance to the CFPB. A commission prevents the regulatory pendulum from swinging wildly back-and-forth every time a new person sits in the Oval Office and will help ensure the CFPB fulfills its mission of consumer protection.”
The bill has the support of several other financial groups, including the American Bankers Association, American Land Title Association, Credit Union National Association, National Association of Federal Credit Unions and the Financial Services Roundtable.
“We thank the Senators who put party politics aside and listened to credit union stakeholders around the country to support a bill that will greatly benefit credit unions and the 110 million members they serve,” Jim Nussle, president and chief executive of the Credit Union National Association, said in a statement. “We’re grateful to see both sides come together to pass a meaningful piece of regulatory reform legislation, and CUNA will continue its engagement to see this positive momentum and see the bill move through the House. This is a great step forward, but we need to continue to make out voices heard to get this bill through the House and across the finish line.”
The bill was sent to the House Financial Services Committee for consideration.
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