House GOP pushing for checks on controversial consumer bureau

House Republicans are pushing legislative efforts to rein in the nation's consumer financial watchdog, which they say lacks transparency and is far too powerful.

The current structure of the Consumer Financial Protection Bureau (CFPB) makes it “virtually impossible for Congress to carry out its oversight responsibility,” Rep. Shelley Moore Capito (R-W.Va.) said on Tuesday.

ADVERTISEMENT
At a Financial Services subcommittee hearing on the CFPB, she and other Republicans praised nine bills that would impose new checks on the agency, which was created by the Dodd-Frank Wall Street Reform Act in the wake of the financial crisis.

Republicans have expressed concerns about the difficulty of reviewing the bureau’s rules, the fact that the CFPB is run by a single individual instead of a board or commission and that it gets its money directly from the Federal Reserve, not through congressional appropriations.

Those features prevent the public from properly overseeing the young consumer bureau, they say.

“The CPFB is a large and powerful agency that’s not accountable,” Rep. Sean Duffy (R-Wis.) said. “It’s not accountable to Congress, which means it’s not accountable to the American people.”

GOP lawmakers have also worried about the data about consumers’ credit cards and loans that the bureau gathers to track trends in the market.

“When the government has access to so much of Americans' information it truly changes the dynamic between the people and their government,” Duffy added.

“Today it seems government agencies like CFPB know more about me than I do,” said Rep. Lynn Westmoreland (R-Ga.).

Democrats pushed back against the bills, which they said were attempts to undermine the agency's mission to protect the public.

“I believe that the reason that folks want the Consumer Financial Protection Bureau to be subject to appropriations is so you can kill it,” said Rep. Stephen Lynch (D-Mass.).

The agency’s collection of personal financial data, he added, was required by Dodd-Frank to make sure that the CFPB’s actions were in response to actual market trends.

Damon Silvers, the policy director for the AFL-CIO, said many of the agency's seemingly unique characteristics are necessary to protect some financial regulators from partisan battles.

“None of these provisions in Dodd-Frank with respect to CFPB are unusual for a bank regulator,” he said.

The handful of bills before Congress would replace CFPB Director Richard Cordray with a five-member bipartisan commission, subject the bureau to annual appropriations from Congress, peg its employees wages to the federal pay scale, prevent it from collecting “nonpublic” personal information without consumers’ consent, allow Americans to review the data that it has about them and give an oversight council more power over its regulations.

Those aren’t partisan measures, said Capito, but instead attempts "to provide more accountability and transparency to an agency whose structure makes it susceptible to regulatory overreach and unbalanced rule writing.”

Silvers retorted that almost all of the bills are “designed to weakened the CFPB.”  

-- This story was updated on Oct. 30 at 2:35 p.m.

More in Finance

Barney Frank changes tune on rule at center of funding fight

Read more »