ABA COO Michael J. Hunter testified on key pieces of legislation related to the agency and its scope of authority.
“The [CFPB] will play a pivotal role in setting new rules that will affect access and availability of consumer financial products,” Hunter said. “We strongly support an effective mechanism of checks and balances for the [CFPB], and we applaud congressional efforts to achieve this goal.”
The CFPB has taken heavy fire recently, as critics argue that Director Richard Cordray has too much authority, little oversight and excessive leeway regarding fund appropriation.
The ABA, which represents the nation’s $13 trillion banking industry, has voiced concern about the agency’s power and how it affects the financial industry.
“As the law is currently written, the bureau’s director has sole authority to decide the direction and parameters of the consumer financial product market,” the ABA testified. “This vests far too much power in one person to fundamentally alter the financial choices available to consumers.”
Under H.R. 1355, a bill sponsored by Representative Randy Neugebauer (R-Texas), Hunter said that the CFPB would be accountable to the U.S. Treasury, ensuring proper use of appropriations funds. Hunter also said that the ABA endorses H.R. 1121, a bill sponsored by Chairman Spencer Bachus of the Committee on Financial Services, that would replace CFPB Director Richard Cordray with a five member board.
“We believe such a structural change would provide an effective check and balance,” Hunter said.