House clears bill to restructure CFPB, Obama threatens veto
The House of Representatives passed a bill late Thursday night 241-173 to restructure the newly launched Consumer Financial Protection Bureau and provide more power to the agency's oversight committee. Rep. Sean Duffy (R-Wisc.) introduced The Consumer Financial Protection Safety and Soundness Improvement Act of 2011, or H.R. 1315, which would establish a bi-partisan five-member commission to carry out the duties of the agency instead of a director. The bill also provides the Financial Stability Oversight Council more powers to veto CFPB rules. Instead of a two-thirds vote required, FSOC would need a simple majority. It also eliminates a 45-day time limit for FSOC to review a new bureau regulation. The bill would also require all FSOC meetings be open to the public – whenever it considers vetoing a CFPB rule. "I am a strong advocate for consumer protection – that's why my bill does not do away with the CFPB. It simply recognizes the reality that we cannot separate consumer protection from the safety and soundness of the financial system," Duffy said. But the Democratic-controlled Senate is unlikely to pass the legislation. Even so, the Obama administration said it would veto the bill should it reach the President's desk. The President himself said on Monday, when he introduced his nomination for CFPB director, Richard Cordray, that he would fight any changes to the bureau, which opened Thursday. However, a group of Senators said they would not clear Cordray for the job until their demands in the bill are met, leaving the bureau unable to write rules and govern nonfinancial lending institutions. "H.R. 1315 would significantly interfere with the CFPB’s charge to make consumer financial markets operate more efficiently and effectively, facilitate innovation in the marketplace, protect consumers’ interests, and ensure that consumers have the information they need to make prudent financial decisions," the Obama administration said. Write to Jon Prior. Follow him on Twitter @JonAPrior.