Senator Introduces CFPB Reform Bill to Replace Cordray with Five-Member Commission

by devteam February 5th, 2013 | Share

Senate Republicans have fired the firstrntwo shots in a renewed battle over the Consumer Financial Protection Bureaurn(CFPB).  President Barack Obama recentlyrnsubmitted the name of Richard Cordray, who has served as CFPB director since Januaryrn2012, for full Senate confirmation to the post. rnHe had recess-appointed Cordray when Senate Republicans made it clear theyrnwould not confirm anyone, regardless of their qualifications, to the post.   </p

On Friday Senate Minority Leader MitchrnMcConnell and 42 other senators sent the President a letter, nearly identicalrnto one sent to the President in 2011 which said in part, “We have seriousrnconcerns about the lack of congressional oversight of the agency and the lackrnof normal, democratic checks on its sole director, who would wield nearlyrnunprecedented powers.  Accordingly, wernwill continue to oppose the consideration of any nominee, regardless of party affiliation,rnto be the CFPB director until key structural changes are made to ensurernaccountability and transparency (at the Bureau).” </p

The key structuralrnchanges demanded in the letter are:</p<ol

  • Establish a bipartisan board of directors to oversee CFPB.</li
  • Establish a safety-and-soundness check for the prudentialrnregulators</li
  • Subject the Bureau to the annual appropriation process</li</ol

    The Dodd-Frank Act which establishedrnCFPB set up its funding mechanism through the Federal Reserve rather thanrnthrough the annual Congressional appropriations process and denies the Fed anyrnauthority to deny or adjust the funding request.  This was done to insulate the agency from thernpolitical pressure that attends the appropriations process.</p

    Also on Friday Senator Jerry Moranrn(R-KA) filed a bill, The Responsible Consumer Financial Protection RegulationsrnAct of 2013, (S. 205), which would replace the CFPBrndirector with a Senate-confirmed five person commission and incorporating the letter’srnother two demands.  </p

    Moran said of his bill, which hernalso introduced in 2011, “Allowing a single unelected official to definerntheir own jurisdiction and regulate vast segments of our economy without accountabilityrnor restraint is irresponsible regardless of political party.  This commonsense legislation brings a varietyrnof perspectives to the Bureau and gives Congress the oversight authorityrnrequired for such a powerful agency. We stand ready to work with thernpresident to make certain the CFPB’s mission of consumer protection is bothrneffective and accountable.</p

    “History has shown that thern’power of the purse’ is a critical tool that Congress employs to hold agenciesrnaccountable,” Sen. Moran continued. “The CFPB has more power andrnauthority than almost any independent agency in history and asking them tornpresent a budget to Congress for approval is a very modest request.”</p

    Moran’s office points out that thernoriginal version of the Dodd-Frank Act passed by the house established CFPBrnwith a five-member commission appointed by the president with no more thanrnthree members from the same political party. rnThis provision was removed in conference and a single director replacedrnthe commission.

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  • About the Author


    Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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