The House Financial Services Subcommittee on Financial Institutions and Consumer Credit met last week to discuss proposals designed to enhance accountability and oversight at the CFPB.
“We are here this afternoon to gain insight on proposals to reform the CFPB so that it is better suited to provide a stable regulatory environment for consumer credit,” Subcommittee Chairman Rep. Shelley Moore Capito (R-W. Va.) said. “Consumer protection is not a partisan issue, and the proposals before this subcommittee today do not attempt to weaken the CFPB in any way. Rather, these measures attempt to provide more accountability and transparency to an agency whose structure makes it susceptible to regulatory overreach and unbalanced rule writing.”
Legislation up for discussion centered primarily on replacing the CFPB’s leadership structure with a five-member board, reforming the CFPB’s funding mechanism and the movement of its employees to the federal general schedule for compensation and concerns regarding the agency’s efforts to collect personal financial data on American consumers.
“No matter how qualified and competent a single individual is, a commission setup would allow for multiple consumer perspectives to be brought to the table in the CFPB decision making process,” Lynette Smith of the Washington Gas Light Federal Credit Union said. “This would allow a healthy debate on new proposals before they are issued and not subject the agency to the agenda of a single director.”
Robert Tissue of West Virginia-based Summit Financial Group said Dodd-Frank provided the CFPB with “expansive new quasi-legislative powers” and the ability to “re-write the rules of the consumer financial services industry.”
“[This] boundless grant of agency discretion is exacerbated by giving the head of the bureau sole authority to make decisions that could fundamentally alter the financial choices available to consumers,” Tissue said.