House approves Rep. Duffy’s bill to reform CFPB, empower FSOC

170px-Seal_of_the_United_States_House_of_Representatives.svgThe House voted 232-182 last week to pass Rep. Sean Duffy’s (R-Wis.) legislation to reform the CFPB and expand the Financial Stability Oversight Council’s ability to overturn agency rules.

Under the legislation, the chairman of the FSOC would be authorized to set aside any regulation issued by the CFPB if two-thirds of the council’s members vote in favor of doing so, on the grounds that the rule is inconsistent with the safety and soundness of the U.S. financial system.

Additionally, the bill would eliminate the CFPB director in favor a five-member bipartisan commission, subject the agency’s budget to the congressional appropriations process and require the CFPB to obtain consent before collecting consumers’ nonpublic personal information.

Currently, the CFPB is headed by Director Richard Cordray, and the agency draws its budget from the Federal Reserve.

The legislation has received support from the National Association of Federal Credit Unions and American Bankers Association, among others.

Rep. Jeb Hensarling (R-Texas), the chairman of the House Financial Services Committee and a vocal critic of the CFPB, said before the House that the bill is a set of “common-sense reforms” aimed at making the CFPB “more accountable and more transparent.”

“Consumers don’t just need to be protected from Wall Street,” Hensarling said. “They need to be protected from Washington as well.”

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