While Republican members of the U.S. House Financial Services Committee have often questioned how the Consumer Financial Protection Bureau goes about its business, now a member of the GOP from the U.S. Senate is looking to reform how the agency operates.
Sen. Deb Fischer introduced two bills offering structural reforms to the CFPB. The Nebraska Republican explained the Consumer Financial Protection Commission Act of 2014 (S. 2213) would replace the agency’s single director position with a five-member, bipartisan commission.
Fischer’s second bill, the CFPB Improvement Act of 2014 (S. 2212), would change the requirement for the Financial Stability Oversight Council’s (FSOC) voting members to overturn CFPB regulations.
“The CFPB has an enormous amount of influence impacting all sectors of our economy and every consumer nationwide. Decisions governing such a powerful agency should reflect input from all sides, rather than placing broad regulatory authority in the hands of a single unelected official with little oversight from Congress,” Fischer said.
“Similarly, the approval process for regulations issued by the CFPB requires changes to strengthen oversight. These two bills reform CFPB and FSOC’s structure to ensure greater accountability and enable the agency to more effectively carry out its mission of consumer protection,” she continued.
The Consumer Financial Protection Commission Act of 2014 would replaces the director of the CFPB with a bipartisan commission of five individuals. It also would establishes four other elements, including:
—Each member would be appointed by the president and confirmed by the Senate.
—Commissioners would each serve staggered five-year terms, and no more than three commissioners could be from the same political party.
—A chair of the commission position would be created. This position would be filled by one of the five commission members to fulfill administrative and other duties
—The legislation would not take effect until July 16, 2018, the day after the end of current CFPB director Richard Cordray’s term.
Fischer pointed out that in May of 2011, and again last February, 43 and 44 Senators, respectively, signed letters to President Barack Obama requesting this reform.
The Nebraska lawmaker went on to highlight the CFPB Improvement Act of 2014 would change the requirement for FSOC voting members to overturn CFPB regulations, incorporating a trio of procedures:
—Currently, two-thirds or seven the FSOC’s 10 voting members are required to overturn CFPB regulations.
—This legislation would change the two-thirds requirement to a simple majority.
—It would also exclude the director of the CFPB from such a vote, removing any individual bias.
The reforms included in Fischer’s bills were recently passed by the House as part of H.R. 3193, legislation sponsored by Rep. Sean Duffy, a Wisconsin Republican and member of the House Financial Services Committee.
Duffy applauded the introduction of Fischer’s legislation in the Senate.
“I commend Sen. Fischer for her efforts in the Senate to hold the CFPB accountable to the standards of transparency that they promised the American people, but have yet to deliver,” Duffy said. “This is a dangerously powerful and unaccountable agency and must be reined in. I will continue my efforts in the House and am glad to have a strong ally in the Senate.”