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ABA calls for more oversight of Consumer Financial Protection Bureau

During a recent Senate Banking hearing, the American Bankers Association said that in order to ensure strengthened accountability, the Consumer Financial Protection Bureau should be structured with either a board or commission instead of a single director.

“Having only one Senate-confirmed director vests too much power in one person and lacks any effective checks and balances, “ chairman-elect of the ABA Albert Kelly, Jr., said during his testimony. “A board or commission would help to provide accountability and balance.”

In his testimony, Kelly said the ABA also supports changing the voting standard for the Financial Stability Oversight Council’s review of Bureau rule-making to a simple majority rather than a two-thirds vote.

“It should clearly be sufficient to set aside a bureau rule if a simple majority of the nation’s top regulators believes the Bureau has acted in a manner that adversely impacts the safety and soundness of the American banking or financial system,” Kelly said in his testimony.

Kelly also said the ABA believes that standards for the FSOC review of Bureau actions – systemic risk – is flawed. He noted that bureau actions that end up driving community banks out of business do not create a systemic risk although the actions have severe implications for the communities. 

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