House panel set to move on more CFPB reform bills
A House subcommittee will hold a hearing Wednesday to fine tune three more bills introduced last year attempting to reform the Consumer Financial Protection Bureau.
Republicans have long opposed the idea of the bureau from when its original language was being drafted in the Dodd-Frank Act to the blockade of a vote on nominee Richard Cordray and finally to a court challenge of Cordray's recess appointment to become director of the CFPB.
In July, the House passed a bill to restructure the agency that would install a five-member commission instead of a director and give the Financial Stability Oversight Council power to veto any rule with a simple majority instead of a two-thirds vote.
While The Consumer Financial Protection Safety and Soundness Improvement Act of 2011 will likely go nowhere in the Democrat-controlled Senate, House republicans are moving ahead with three more bills.
The subcommittee, chaired by Rep. Shelley Capito, R-W.Va., will hold the hearing on the bills Wednesday.
H.R. 1355, introduced by Rep. Randy Neugebauer, R-Texas, would move funding for the CFPB under the Treasury Department from the Federal Reserve, thus making it subject to congressional appropriation controls. Currently, the Fed transfers 10% of its operating budget in the fiscal 2011 then up to 11% in this year and 12% in 2013. The CFPB can retrieve an additional $200 million if needed.
H.R. 2081, introduced by Rep. Jim Renacci, R-Ohio, would remove the CFPB director from the Federal Deposit Insurance Corp. board of directors. He cited the duel positions creates a conflict of interest.
H.R. 3871, introduced by Rep. Bill Huizenga, R-Mich., would make it illegal for the CFPB to disclose privileged information a financial institution sends to the bureau. The Dodd-Frank Act did not include the CFPB as one of the agencies for which this is already law. Cordray said in two separate January hearings that he was working to ensure the bureau adhered to the rule and urged Congress to revise the law to include the bureau.
"The reforms we seek are common sense measures that will ensure the bureau fulfills its consumer protection mission while being accountable for its actions and use of resources," said House Financial Services Committee Chair Rep. Spencer Bachus, R-Ala.
Democrats said the CFPB was made independent to give consumers the sort of protections regulators failed to grant prior to the financial crisis.
"What we see are simplified mortgage lending documents, disclosure of fees in foreign remittances, scrutiny of payday lending and concrete steps towards greater transparency and consumer empowerment," said Rep. Luis Gutierrez, D-Ill. when Cordray was appointed. "A functioning CFPB is not the coming of the end but a new beginning."