The House next week will consider legislation that would restructure a financial regulator that Republicans say needs more transparency and accountability in its decisions.

House Republicans will call up the Consumer Financial Protection Safety and Soundness Improvement Act, H.R. 3193. The bill would take the Consumer Financial Protection Bureau (CFPB) out of the Federal Reserve system, and turn it into an independent commission made up of five board members instead of a single director.

The original version of the bill was introduced by Rep. Sean Duffy (R-Wis.), but the version up next week is more fleshed out and includes other proposals to reform the CFPB.


The agency was created by the Dodd-Frank financial reform law. It's tasked with protecting the public from risky or fraudulent financial products and empowered to issue regulations to that effect.

But Republicans have argued that the CFPB would be more accountable if it were run by a five-person board that could allow for more deliberation and compromise.

Republicans have also complained about the current bureau director, Richard Cordray. Cordray was originally recess appointed by President Obama to lead the CFPB in 2012, a move that led to GOP criticism and a court case that struck down that appointment.

Cordray was eventually confirmed by the Senate last summer as part of a deal to end a dispute over presidential nominees.

Under Duffy's bill, the CFPB would be renamed as the Financial Product Safety Commission, and it would be taken out from under the Fed and be made into an independent commission.

The five-person board would be appointed by the president, but the first board would have staggered terms to help create turnover.

Aides to Duffy noted that Sen. Elizabeth Warren (D-Mass.) first proposed a five-person commission when she helped the Obama administration design the CFPB.

The bill would also make it easier to overturn the regulatory proposals of the new commission. Today, the Financial Stability Oversight Council has the authority to overturn CFPB rules with a two-thirds majority vote. Duffy's bill would allow the new committee's regulations to be overturned by a simple majority vote.

Also next week, the House will take up another bill from Duffy aimed at making it easier for smaller companies to raise money in the equity markets.

His Small Cap Liquidity Reform Act, H.R. 3448, would give companies the option of selling their stock in 5-cent or 10-cent increments. Smaller companies have had trouble raising funds in the public market, and some say it's due in part to the pricing of these stocks in penny increments.

The hope is that allowing prices to move in increments of either nickels or dimes will help them raise more revenue. The bill would only apply to emerging growth companies with total annual gross revenues of less than $750 million per year.