The Consumer Financial Protection Bureau lacks the check and balances, the financial accountability and the transparency that is generally found at other financial regulators operating out of Washington D.C., experts told the House Financial Services Committee on Tuesday.

During a hearing title, “Examining Legislative Proposals to Reform the Consumer Financial Protection Bureau," credit unions and business interests said they want safe lending to be a staple of the future mortgage market. Yet, they still challenge the CFPB’s current structure, calling it too burdensome and potentially disruptive to parts of the financial system.

Jess Sharp, executive director for the U.S. Chamber Center for Capital Markets Competitiveness, challenged the current structure of the agency during the hearing.

"Independent regulatory agencies typically are headed by a multi-member bipartisan commission whose members serve for fixed terms. That is the structure of the Federal Trade Commission, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Communications Commission, and numerous other agencies," Sharp said.

Yet, he says, the bureau is led by Richard Cordray — a single director who maintains tenure protection for a five-year fixed term.

Under Dodd-Frank, the director "can be removed by the president only for inefficiency, neglect of duty, or malfeasance in office," Sharp pointed out.

Panelists also challenged the CFPB on the independence it maintains in handling federal funds.

"Funding for the Bureau comes not from Congress, but from the Federal Reserve as a fixed portion of its total operating expenses," said Robert Tissue with Summit Financial Group and the West Virginia Bankers Association. "This lack of oversight means that the Bureau is free to direct its nearly $600 million budget towards any issue it sees fit, without input from Congress."

What’s worse is the impact on credit unions, said Lynette Smith, president and CEO of Washington Gas Light Federal Credit Union. Smith also testified on behalf of the National Association of Federal Credit Unions.

The Dodd-Frank Act likes to claim it ‘leveled the playing field’ for community-based financial institutions, she says. But in her experience, these firms hurt the most since they “do not have the armies of lawyers that large Wall Street banks have to keep up with the pace of regulations coming out of the CFPB."

NAFCU surveyed member credit unions in September and discovered only 4% benefited from new Dodd-Frank rules. The rest continue to struggle with compliance costs.

"A survey of NAFCU members from late last year found that 94% have seen their regulatory burden increase since enactment of the Dodd-Frank Act in 2010," Smith said. "With thousands of pages of CFPB rules and proposals to interpret and ultimately comply with, the regulatory onslaught continues for credit unions."

The panelists recommended similar reforms, pushing the panel to consider existing legislation on the issue.

The credit unions hope to establish a risk-based capital system for credit unions, while asking for a provision that gives federal credit unions a waiver from federal rules when existing state rules are already in place. Furthermore, credit unions want more control of their investment decisions and portfolio risk, NAFCU advised.

Tissue with Summit Financial wants significant structural changes, improved oversight and assurances that non-banks receive the same amount of regulation since they contributed greatly to the housing crisis.

The U.S. Chamber of Commerce went a step further, asking for the single director structure to be replaced by a five-member bipartisan panel to ensure checks and balances. The chamber also wants the bureau’s spending subjected to the congressional appropriations process.