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Bipartisan House bill would replace consumer director with panel

Bipartisan House bill would replace consumer director with panel
© Greg Nash

A bipartisan group of House members on Wednesday released a bill that would replace the director of the controversial Consumer Financial Protection Bureau (CFPB) with a five-person commission.

The bill from Reps. Dennis RossDennis Alan RossBiden's quiet diplomacy under pressure as Israel-Hamas fighting intensifies Biden needs to tear down bureaucratic walls and refocus Middle East programs Balancing act: Biden must redefine the US-Saudi relationship MORE (R-Fla.), Kyrsten Sinema (D-Ariz.), Ann WagnerAnn Louise WagnerMissouri Republicans move to block Greitens in key Senate race Democratic Kansas City, Mo., mayor eyes Senate run The Hill's Morning Report - Presented by Emergent BioSolutions - House GOP drama intensifies; BIden sets new vax goal MORE (R-Mo.) and David ScottDavid Albert ScottCivil rights lawyer announces bid for Texas attorney general Lawmakers, activists remember civil rights icons to mark 'Bloody Sunday' Amazon manager sues company over racial discrimination, harassment allegations MORE (D-Ga.) would rename the CFPB and replace its director with a bipartisan panel.

While the bill would easily pass the House, it would likely be filibustered in the Senate by Democrats who have protested changes to the CFPB.

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Under the bill, the CFPB would become the Financial Product Safety Commission, directed by a panel appointed by the president. No more than three commissioners could be from the same political party, and the president could remove a member for “inefficiency, neglect of duty, or malfeasance.”

The bill is an attempt to rein in the CFPB director’s sole control over the agency’s extensive authority. Republicans have long insisted that the bureau, opened in 2013, is too powerful, immune from congressional oversight and dependent on the whims of the director.

The CFPB issued a slew of regulations and pursued aggressive actions against financial companies suspected of wrongdoing under former director Richard CordrayRichard Adams CordrayOn The Money: IRS to start monthly payments of child tax credit July 15 | One-fourth of Americans took financial hits in 2020: Fed Student debt cancellation advocates encouraged by Biden, others remain skeptical On The Money: McConnell rules out GOP support for Biden families plan | How COVID-19 relief bills may affect your taxes | Is the US heading for a housing bubble? MORE. While Democrats praised Cordray for his tough oversight of lenders, Republicans and the financial sector argued the CFPB overstepped its boundaries.

Supporters of the CFPB commission say a five-person panel would provide more stability for the agency and prevent any political ideology from dominating the agenda. Acting CFPB Director Mick MulvaneyMick MulvaneyHeadhunters having hard time finding jobs for former Trump officials: report Trump holdovers are denying Social Security benefits to the hardest working Americans Mulvaney calls Trump's comments on Capitol riot 'manifestly false' MORE, a staunch conservative, has enraged liberal former allies of the bureau by scaling back the agency’s operations.

Democrats say installing a CFPB commission would hinder the agency from fulfilling its mission, laid out in the Dodd-Frank Act, to protect consumers from risky financial products and fraud. They insist that Republicans could kneecap the CFPB by refusing to confirm commissioners.

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The bill seeks to limit those concerns by allowing the commission to approve all agency actions with just two of five commissioners in place.

Major financial sector lobbying groups that have sought to rein in the bureau endorsed the bill shortly after its release.

The Consumer Bankers Association, National Association of Federally-Insured Credit Unions and Credit Union National Association praised the measure in Wednesday statements.