April 6, 2011
In a April 6 hearing, GOP members of the House Financial Services Committee called the current structure or the Consumer Financial Protection Bureau “absurd” and expressed their belief that the agency’s authority to regulate the banking industry is too broad.
“It’s absurd, it’s unheard of,” said Chairman Spencer Bachus (R-AL), according to The Hill. “Professor Warren has done a great job of really fooling the national media into thinking, ‘Oh, this could easily be appealed… No one has gone past this crazy story […] that we’re just attacking Miss Warren or that we don’t want consumer protection.”
Claiming a lack of checks and balance on the CFBP’s mandate, Republican lawmakers have been lobbying for changes to the agency’s jurisdiction. Witnesses during the hearing voiced support for having the CFPB headed up by a bipartisan panel as opposed to a single director, according to a press release issued by the committee.
“…we support a commission-led model, instead of a single Director, to minimize concern a single powerful director might adopt rules with harmful unintended consequences,” said Richard Hunt, President of the Consumer Bankers Association, according to the press release.
Sen. Jerry Moran (R-KS) has introduced a bill to make the CFPB subject to the congressional appropriations process. Presently, the CFPB’s budget is set to be funded by the Federal Reserve and does not need to be approved by lawmakers. Meanwhile, a bill from Rep. Sean Duffy (R-WI) would give other organizations greater power to overturn CFPB regulations. As of now, the Financial Stability Oversight Council (FSOC), comprised of all leading financial regulators, can repeal a CFPB rule with a two-thirds super-majority vote of the commission. The impending director of the CFPB will be one of 10 voting FSOC panelists.
“Republicans argue that arrangement makes it too difficult for other regulators to block CFPB rules, and are pushing a bill that would allow the FSOC to overturn rules by a simple majority, as long as the rules are inconsistent with the safe and sound operations of financial institutions,” reports The Hill.
Yet Rep. Brad Miller (D-N.C.) argued that the CFPB “probably has more checks on its authority and more accountability than any agency in government.” Democrats counter that any changes to the current structure of the CFPB could result in a return to the financial ecosystem that led to the recession.
“Any attempt to delay or weaken the CFPB could leave American families, their communities, and the economy as a whole exposed to many of the same risks that brought our financial system to the brink of collapse,” said Rep. Carolyn Maloney (D-NY), according to The Hill.