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House GOP gears up to rework Consumer Protection Bureau
House Republicans are hoping that the first day the Consumer Financial Protection Bureau (CFPB) opens its doors will also be the day they advance significant changes to how it operates.
On Thursday, the House will consider a bill that would make three major changes to the CFPB, which Republicans say address fundamental flaws they see in the agency created as part of the Dodd-Frank financial reform law.
The CFPB has been at the center of partisan fire since it was created nearly a year ago, as vocal critics on the right and equally — if not more vocal supporters on the left — have fought over it. But Republicans Tuesday worked to strike a more productive tone about the agency and potential changes to it.
"Free enterprise doesn't work if it's not ethical," he said. "My view is the [CFPB] could be a very good thing."
He pointed out that some Republicans are pushing legislation to repeal the CFPB along with all of Dodd-Frank — and that he and others advocating for changes to the CFPB are not among them.
"Now that the CFPB's been passed into law, I think it's incumbent on us to try to work to see that it's a success," he said.
"We think this strikes the right balance," added Rep. Sean Duffy (R-Wis.), who sponsored one of the original bills altering the bureau.
Hitting the House floor Thursday will be a single bill that is an amalgam of three measures approved by Bachus's committee back in May.
At the top of the pile is a measure sponsored by Bachus himself, which would replace the top of the CFPB, currently a single director, with a five-person bipartisan commission. Senate Republicans have made a similar demand of the CFPB, as GOP lawmakers argue the agency as constructed lacks appropriate accountability and balance, and such a change would ensure Republicans have a say in how the agency operates.
Bachus is quick to point out that other regulators, like the Federal Deposit Insurance Corp. and Federal Reserve, also are run by multi-person boards.
A second change would make it easier for other regulators to overturn CFPB rules. Under the current system, the Financial Stability Oversight Council (FSOC) — a panel that gathers top banking regulators from across the federal government — can overrule a CFPB rule only if a supermajority determines it would pose a threat to the banking system. Duffy's proposal would allow the FSOC to overturn a CFPB rule with a simple majority, and if it deems the rule would merely be "inconsistent" with the safety and soundness of a financial institution.
A third change, first offered by Rep. Shelley Moore Capito (R-W.Va.), would prevent the CFPB from taking on any powers unless a Senate-confirmed director is in place. The president just nominated Richard Cordray, the former Ohio attorney general, to take that spot on Monday, but the contentious place the bureau occupies on the political sphere will likely ensure a lengthy confirmation fight.
In fact, Bachus predicted Tuesday that President Obama would ultimately skirt the confirmation process by naming Cordray director via recess appointment.
"I would speculate, or guess, President Obama will make a recess appointment at some point," he said.
For her part, CFPB architect Elizabeth Warren, who is widely credited with thinking up the bureau but was not nominated to be its first director, has fiercely opposed GOP attempts to alter the bureau she established.
"It's time to take the fight straight to the Republicans," she said Monday evening on MSNBC's "The Rachel Maddow Show." "We are not, not, not going to let the minority come in and dictate the terms of this agency, rip its arms and legs off before it's able to help a single family."
The bill will likely pass the House, given its Republican majority. Its prospects in the Senate are far murkier, as Democrats still retain control of the chamber. However, Republicans there are taking advantage of one major point of leverage: a filibuster-proof group of GOP senators has vowed to block any nominee to head the CFPB unless several changes are made to the agency — including replacing the director with a board.
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