Voters are speaking out on the need to reform the Consumer Financial Protection Bureau’s single-director governing structure. According to a recent Morning Consult poll, 58 percent of registered voters in eight states said they support establishing a bipartisan commission to govern the CFPB. With Congress considering reforms to the bureau, just 14 percent said they support keeping the current CFPB structure.
Unlike the vast majority of federal regulatory agencies, the CFPB is headed by a single individual with jurisdiction over 15,000 separate financial institutions — more than all other federal banking regulators combined. In other words, the CFPB provides unilateral authority to a single individual to direct agency policy with the stroke of a pen and without prior deliberation.
The data show that voters want to see a change. According to the Morning Consult poll, in key states, 57 percent of voters said instituting a commission structure at the CFPB would help consumers and 55 percent said it would benefit small businesses. Meanwhile, by a 4-to-1 margin, voters said they believe the CFPB should be structured as a commission like the Federal Deposit Insurance Corporation (FDIC).
Considering the bureau has virtually boundless regulatory authority over the products and services that millions of Americans use every day to manage their finances, it should come as no surprise that support for a commission can be found across the political spectrum. The poll found that 63 percent of Democrats, 59 percent of Republicans and 54 percent of Independents surveyed said the agency should be run by a bipartisan commission instead of a single director. The CFPB wields immense power, and voters of all political stripes agree on the need for checks and balances.
A regulatory agency that vests unprecedented power in the hands of a single individual, rather than a diverse group of experts, is bound to pose issues for those who advocate a balanced approach to financial regulation. Under the current structure, new administrations will bring with them new CFPB directors, placing the agency at risk of dramatic shifts in policy direction that could harm consumers and the financial institutions that serve them.
According to the poll, of voters in Indiana, Maine, Michigan, Missouri, Montana, North Dakota, Ohio and West Virginia, 57 percent said the CFPB’s authority to supervise financial institutions, write rules and enforce penalties is too important to be controlled by a single director.
The voter-supported commission structure would remove the ability of the CFPB’s leadership to abruptly upend entrenched policy and regulation on a whim, allowing the bureau to serve as a balanced, independent agency capable of rising above the political fray. No wonder three out of five voters said a commission would make the CFPB more accountable, fair, transparent and representative. Moreover, 59 percent said a commission would better position the bureau to help consumers over the long run.
The CFPB governance model is structurally unsound as an independent federal agency due to its single-director governance, which a three-judge panel ruled last year is unconstitutional. While the PHH v. CFPB case has not concluded, it helps demonstrate how the bureau would be better served for the long haul if it adopted a commission-based leadership structure.
This change would not only strengthen its credibility as a neutral and independent agency but also allow for diverse views and expertise on issues before the CFPB. By establishing greater diversity and a system of checks and balances at the CFPB, a commission structure would lead to better-quality rules and more effective consumer protection.
Congress can address their constituents’ preference by establishing a bipartisan commission at the CFPB to oversee consumer-protection laws. The American people want accountability, fairness, transparency and balance at the CFPB. Consumer protection is too important to be left in the hands of an all-powerful individual. It is time for Congress to act.
Richard Hunt is president and CEO of the Consumer Bankers Association (CBA) representing the retail banking industry, including the nation’s largest bank holding companies as well as regional and super community banks. Camden R. Fine is president and CEO of the Independent Community Bankers of America® (ICBA) representing the interests of more than 5,800 community banks.
The views expressed by contributors are their own and not the views of The Hill.