Rep. Maloney assails bills to “delay and diffuse” CFPB authority

“The Consumer Financial Protection Bureau is needed, is already carefully structured, and doesn’t require ‘improvement’ from those who opposed its creation.”
Apr 6, 2011 Issues: Consumer Banking, Financial Regulatory Reform, Financial Services, CFPB
Press Contact: 
Jon Houston (202) 225-7944

WASHINGTON, DC – At a legislative hearing of the House Financial Services Committee today, Rep. Carolyn Maloney (D-NY) assailed Republican legislation to “delay and diffuse” the authority of the new Consumer Financial Protection Bureau (CFPB), scheduled to open for business in July.
 

The hearing, titled “Legislative Proposals to Improve the Structure of the Consumer Financial Protection Bureau” featured legislation sponsored by Rep. Spencer Bachus (R-AL), Rep. Sean Duffy (R-WI) and discussion proposals from Rep. Shelley Moore Capito (R-WV) each of which modifies the “Dodd-Frank Wall Street Reform and Consumer Protection Act” provisions which establish the new Consumer Financial Protection Bureau.

“The Consumer Financial Protection Bureau is needed, is already carefully structured, and doesn’t require ‘improvement’ from those who opposed its creation,” Maloney said. “The creation of the CFPB was a highlight of the Dodd-Frank reforms last year, where this bureau was fully and completely debated. To discuss these proposals before the bureau even opens for business in July is unnecessary.”

“These proposals are merely an effort to delay and diffuse needed reforms. A single Director of the Bureau ensures accountability; a super-majority to override CFPB rules is a safety valve, not a governing device; and to delay any agency authority until a director is confirmed is counter to any other agency’s practice,” Maloney said.

“There are plenty of checks and balances built into the structure of the CFPB as it is now. We should let it open its doors and then make judgments about what tweaks might be necessary—if any,” Maloney said.

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Background.

The proposals discussed at the hearing include:

The Bachus bill, H.R. 1121, would change the bureau’s leadership from a single director to a 5-person board;

The Duffy bill, H.R. 1315, changes the Financial Stability Oversight Council’s (FSOC) ability to override a CFPB rule from a super-majority to a simple majority, based on the objection of a single FSOC member and makes “safety and soundness” a criteria for the override;

The Capito proposals (not yet introduced) would delay the transfer of authority to the CFPB until after a Director of the bureau is confirmed by the Senate, and prevents the CFPB examiners from observing financial institution regulatory examinations until after the transfer is complete.