Let's start 2016 off with a trivia question.  Can you name a federal agency where the Director or Chair is allowed to handpick their successor without Senate confirmation or a presidential appointment? 

If you guessed the Securities Exchange Commission, the Federal Deposit Insurance Corporation, or the Consumer Product Safety Commission you are incorrect.  The same is true for those of you who picked the Federal Communications Commission, the Federal Trade Commission, or the National Transportation Safety Board.


But if you answered the Consumer Financial Protection Bureau (CFPB), you get two gold stars.  And it should be noted, the CFPB Director has announced he will appoint the newest Deputy Director any day now.

The Dodd-Frank Act is clear that the president picks the CFPB director with the advice and consent of the Senate.  But who fills the director’s shoes when the office is vacant (until the president picks a successor and he or she is confirmed)? 

At the CFPB, the number two post is handpicked by the sitting director and does not require a presidential nomination or Senate confirmation.  If the director leaves the CFPB before his or her five year term ends, the handpicked deputy director takes over.  The deputy director would then have all the power of a director for an indefinite term with none of the external checks that are so fundamental to our form of democratic government.

The CFPB’s deputy director spot has been vacant for some time, and late last month, the CFPB director announced he would be naming someone to the post in the coming weeks.  Clearly, the need for Congress to act is imminent.  In the spirit of the New Year, we urge the Senate to reclaim its confirmation authority by fixing this flaw in the CFPB’s governing structure and recognize this is yet another reason why the bureau should be restructured from a sole director to a bipartisan commission.

If the agency were headed by a commission instead of an individual, this issue would not arise.  Other Senate-confirmed commissioners would be in place to serve when the chairman departs.  If the CFPB is to be a strong and effective regulator for the long haul, a bipartisan commission structure would also ensure a more balanced, fair, deliberative approach to supervision, regulation, and enforcement.  Most importantly, it would offer a stable form of leadership that can preserve the agency’s role regardless of which political party is in the White House.

With the passage of Dodd-Frank, Congress gave the bureau supervisory authority over more entities than all other Federal bank supervisors combined, totaling 15,000 institutions altogether.  In addition, the CFPB has authority to collect data, make rules and enforce them.   The CFPB has 1,500 employees, a half billion dollar budget, and the ability to affect banks, credit unions, numerous financial services companies—large and small—and more than 300 million American consumers.   In essence, the Bureau can touch the financial lives of nearly every person in our country.  

Concentrating the CFPB's authority in the hands of one person—particularly if this person is not Senate confirmed, as in the case of an acting director—threatens the very foundation of the agency as an objective, neutral regulator.  A bipartisan commission would better safeguard internal deliberation and constrain the CFPB's ability to make politically motivated or ill-informed decisions, including the de facto appointment of an unconfirmed director.

A balanced approach to supervision and certainty for consumers should be the goal, and Congress has the power to make it so in 2016.  We hope this New Year's resolution is achieved.

Hunt is president and chief executive of the Consumer Bankers Association. Follow him on Twitter at @cajunbanker.