Law to Revamp CFPB Unlikely, Lawyer Says

A House of Representatives panel on Tuesday approved a proposal to revamp the Dodd-Frank Act, by voting to send the Financial CHOICE Act to the floor for consideration.

There are a few aspects of the bill — introduced this summer by committee chairman, Jeb Hensarling (R-Texas) — that particularly pertain to the financial services sector, John Redding, a partner at BuckleySandler LLP, told Auto Finance News.

Most interesting, perhaps, is that if enacted into law, the bill would replace the director of the Consumer Financial Protection Bureau with a bipartisan committee, Redding said. Current CFPB Director Richard Cordray, who was appointed by President Barack Obama in 2012, is set to end his five-year term in 2017.

Under the current democratic administration, however, the likelihood of the bill being made into law is low, Redding said. “We saw all but one republican voting in favor, and all democrats voting against,” he said.

Notably, democrats did not offer any amendments during committee either, Redding said. “I think that gives you some insight into how the democrats view the bill, at least on the committee and what they consider the likelihood of it getting through, particularly in its current form,” he added. “If they had any kind of realistic concern they would seek to modify.”

The bill will head next to the house floor, if passed will go next to the Senate, and then on to the president for signature or veto.