A bill introduced last week in the House of Representatives wants to change the leadership structure of the Consumer Financial Protection Bureau (CFPB) from a sole director-led agency to one headed by a multi-member commission.
Introduced by Representative Randy Neugebauer (R-Texas), the bill (H.R. 1266) would create a bipartisan five-person committee appointed by the president to serve as the ruling body of the CFPB.
Though not intended to weaken the CFPB, the bill is a push to strengthen the federal agency and ensure greater protections for the American people by increasing transparency and accountability at the Bureau, Neugebauer said.
“Over the last several years, the Bureau’s actions and record have proven it can’t function in a sustainable manner,” Neugebauer said in a written statement. “Perhaps, more than any other Washington agency, the CFPB has demonstrated a lack of transparency and a lack of accountability. It has proven it is susceptible to political influence — bringing into question its independence.”
The bill follows similar efforts by Reps. Steve Stivers (R-Ohio) and Tim Walz (D-Minn.) to increase CFPB oversight and accountability. Last month, they re-introduced the bipartisan Bureau of Consumer Financial Protection-Inspector General Act of 2015 — legislation that creates the position of an independent inspector general at the CFPB. That position would be appointed by the president and then confirmed with the advice and consent of the Senate.
Neugebauer, who chairs the House Subcommittee on Financial Institutions and Consumer Credit, argues that the more recently proposed legislation would assist the CFPB in its ultimate mission, which is protecting consumers.
“I support consumer protection but we must ensure product choice, credit availability and cost of credit are considered before rushing to regulate,” Neugebauer said. “To better serve the American people, the Bureau must adopt a more balanced and consultative process to its rulemaking.”
The bill, which was introduced by Neugebauer March 4 and has 20 co-sponsors, has since been referred to the House Committee on Financial Services, which is headed by Chairman Jeb Hensarling (R-Texas), one of the CFPB’s most vocal critics.
Transparency and accountability were the buzzwords at a Financial Services Committee hearing last Tuesday with CFPB Director Richard Cordray regarding the Bureau’s semi-annual report to Congress.
“The CFPB undoubtedly remains the single most powerful and least accountable Federal agency in all of Washington,” Hensarling said in his opening remarks during the hearing. “When it comes to credit cards, auto loans and mortgages of hardworking taxpayers, the CFPB has unbridled, discretionary power not only to make those less available and more expensive, but to absolutely take them away.”
Hensarling pressed that the Bureau is “fundamentally unaccountable” to Congress because its funding is not subject to appropriations. He also asserted that the CFPB is unaccountable to the courts, because Dodd-Frank requires courts to grant deference to the agency regarding its interpretation of federal consumer financial law.
“Thus, the bureau regrettably remains unaccountable to the American people,” he said in his remarks. “That is why we need the CFPB on budget and led by a bipartisan commission; mere testimony is not the equivalent to accountability.”
Hensarling added, “True consumer protection requires access to competitive, transparent and innovative markets vigorously policed for force, fraud and deception. True consumer protection empowers consumers and respects their economic freedoms to make important informed choices free from government interferences and fiat.”
Written by Jason Oliva