In a statement released on Friday (July 8), Richard Hunt, president and chief executive officer of the CBA, remarked upon the recent approval of the House of Representative’s fiscal year 2017 Financial Services and General Government Appropriations bill that “the advancement of needed improvements to the CFPB is a win for consumers.”
“The creation of a five-person, bipartisan board at the CFPB will preserve it as a stable, strong and effective regulator, regardless of a President Trump or Clinton. CBA also appreciates the House requiring the bureau to take a second look at its arbitration and small-dollar lending proposals before consumers are potentially harmed. We are grateful the House sees the wisdom in these commonsense improvements and encourage the Senate to follow their lead.”
That nod of approval comes as the legislation includes a number of provisions that would boost oversight of the CFPB.
Among those initiatives: Funding for the agency would shift from the Federal Reserve to an annual appropriations process, which is the norm for Congress. Proponents of that funding shift contend that the annual review (and approval) will lead to a boost in transparency and accountability for the agency, which will have to justify the way it spends taxpayer funds.
In another shift, the leadership structure would move from the current directorship to a five-member panel, as mentioned above, which would lead to a necessary consensus to adopt new initiatives. In addition, the CFPB would have to consider what is known as “pre-dispute” arbitration before moving ahead to issue regulations. That would tie in with the proposals that are on the table with the CFPB, with oversight of the payday loan industry estimated (albeit by interested stakeholders, as in the companies themselves) to cut loan volume by at least 50 percent. Under those proposals, via the CFPB, the ability to repay must be determined on a customer-by-customer basis.