“All of us, Republicans and Democrats, support strong consumer protection. After all, we’re all consumers,” full committee Chairman Spencer Bachus (R-Ala.), who went on to detail the problems he has with the CFPB’s current structure.
“The director has unprecedented power to ban financial products and services based on whether or not he deems them unfair, deceptive or abusive — under really a highly subjective standard,” he said.
Bachus’s Democratic counterpart on the committee, ranking member Barney Frank (Mass.), dismissed GOP criticism out of hand, saying other financial regulators have a similar structure. He added it would be more appropriate if the panel had held the hearing a few days earlier, on Halloween.
“It is apparently only when consumers are the beneficiaries of that independence that it upsets some of my colleagues,” he said. “We have conjured up a series of spooks and ghosts and goblins and nonexistent creatures.”
The hearing marked the latest round in a protracted partisan fight over the bureau, and underlying the entire discussion was the fact that Republicans in the Senate are demanding changes to the bureau’s structure before agreeing to confirm Cordray’s nomination.
A major issue for Republicans is the fact that the CFPB is now headed by a single director. Conservative lawmakers want to put in place a bipartisan commission, which they point out is how other regulators are run and would make the agency more balanced.
But Date defended the CFPB’s current structure, saying it makes it more accountable.
“If you do not make someone singularly responsible for a hard job, you should not expect that it gets done well,” he said.
He went on to say that CFPB officials have worked to meet with as many stakeholders as possible, and was “very aware” that increased regulatory burdens fall disproportionately on smaller institutions.
Rep. Sean Duffy (R-Wis.), who has proposed legislation allowing other banking regulators greater veto power over the CFPB, argued the bureau is an overreach, and that bad actors on Wall Street should not mean small community banks should have to cooperate with a new regulator.
"The original intent was to look at what went wrong on Wall Street," he said. "In essence you've admitted that that's not all that we're going for, we're going for every financial institution."
But Date tried to assure lawmakers that the CFPB did not want to exert a heavy hand, pointing to recent projects simplifying mortgage and student loan documents as emblematic of what the agency wants to do.
"If you don't believe what we say, look at what we do," he said.