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Lending

CFPB remains standing, but Congressional push to reshape it continues

November 20, 2013
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The Consumer Financial Protection Bureau officially went live in the summer of 2011 – a long two years ago. And yet, the bureau has never found itself on stable footing, as evidenced by the latest House Financial Services Committee mark-up hearing on Wednesday.

At the center of the meeting is a plan packaged into six bills that's designed to re-mold the bureau into something both political parties can stand. Although getting to a point of agreement on such a plan has been controversial and partisan in itself.

Committee members reviewed six bills Wednesday – all of which are designed to reshape the CFPB and its authority in some way. There’s HR 2385, a bill to put the pay of CFPB staffers in line with the government’s general schedule and H.R. 2446, which is designed to replace the director of the bureau with a five-person commission.

The interplay among lawmakers during the mark-up session turned humerous, with Democrat Maxine Waters, D-Calif., requesting that Republicans follow the conservative mantra by making government smaller and not suggesting the addition of new positions in the form of a commission structure.

Yet, the five-person commission structure has been recommended by Republican opponents of the bureau as a way to ensure regulatory stability much in the same way that the Securities and Exchange Commission has a small group of commissioners overseeing agency initiatives.

The remaining bills involve efforts to protect the privacy of consumer data, recommendations for disclosures on collected data and legislation that would strengthen the bureau in terms of general oversight and budgetary reviews.

Rep. Sean Duff, R-Wis., introduced three of the bills, including one that would prevent the CFPB from collecting or using consumer data without giving members of the public clear disclosures.

During a hearing over the summer, Duffy suggested in one exchange that the bureau is taking data consumers do not want them to have.

"…Americans don’t want you to have their financial data," he goes on the record as saying. "That’s exactly right – that’s the point. So if they don’t want you to have their financial data, don’t take it! Or ask them permission. But you make the point for us: They don’t want you to have the data, and you’re taking it anyway under the auspicious of the Consumer Financial Protection Bureau," the congressman lamented at the time.

The mark-up session drew Rep. Maxine Waters into the public debate. The congresswoman released a statement defending the CFPB’s busy first two years, which included the formation of new mortgage lending and servicing rules -- many of which launch in January.

"The proposals we will discuss today would weaken CFPB’s ability to be an effective, independent advocate for consumers. HR 2446 would eliminate the position of Director in favor of a commission, likely hampering any efforts by the agency to quickly respond to industry and consumer concerns," Waters said. "The bill would also require the President to find four more nominees likely to be filibustered by a broken Senate before the agency is up and running again."

Rep. Jeb Hensarling, R-TX, Chairman of the House Financial Services Committee, called the bills "modest," noting that they "bring a modicum of accountability and transparency to the CFPB."

"Number one, the CFPB is effectively unaccountable to Congress since it is exempted from the Congressional budgetary and appropriations process unlike many other agencies," the chairman said.

"There is thus no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less effectively in a time of runaway debt and deficits," he added. "Not even the agency from which the CFPB obtains its funding, the Fed, has oversight over the CFPB director’s spending."

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