House Approve Bill to Overhaul CFPB

Voting 232 for and 182 against, the House on Feb. 27 passed a Republican bill (HR 3193) to reduce the authority of the Consumer Financial Protection Bureau (CFPB). The bill enables the 10-member Financial Stability Oversight Council in the Treasury Department to veto the bureau’s proposed regulations by simple majority vote rather than the two-thirds majority now required. The bill also would replace the bureau’s director with a five-person governing body and subject its budget to the congressional appropriations process.

The legislation — The Consumer Financial Freedom and Washington Accountability Act — sponsored by Representative Sean Duffy, R-Wis., is a package of bills to bring greater accountability and transparency to the CFPB, which is currently headed by a  single director, Richard Corday, who was nominated by the president and confirmed by Congress.

Created in 2010 by the Dodd-Frank financial reform law, the CFPB has authority to write and enforce consumer protection rules  for retail banks, home-mortgage lenders, student and payday lenders, credit cards and other firms that sell financial services to households and individuals. It is based in the Federal Reserve while operating independently with a budget derived from fees and a chairman nominated by the president and subject to Senate confirmation.

Ten Democrats broke ranks to vote with their GOP peers. The bill is opposed by the Obama administration and the Democrat-controlled Senate, where it is likely to die. Even if the bill were somehow to make it through the Senate, the president has signaled his willingness to veto the legislation.

Opponents of the Bureau say the CFPB is too powerful and unaccountable to Congress. But the Bureau’s defenders claim that the group is operating efficiently and without political encumbrance seen in federal agencies with commissions.

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