WASHINGTON The House Financial Services Committee passed six bills on Thursday that would alter various aspects of the Consumer Financial Protection Bureau.
The proposals would change the CFPB's leadership structure from a director to a board; subject its budget to the congressional appropriations process; establish pay parity for employees with other regulators; strengthen the review authority of the Financial Stability Oversight Council over the agency; prohibit it from collecting consumer data without consent; and provide consumers with a disclosure of the information the agency does collect. The banking panel began debating the measures on Wednesday.
"These are modest, common-sense bills that bring a modicum of accountability and transparency to the CFPB," said panel Chairman Jeb Hensarling, R-Texas. "We know that this is an agency that was designed to be unique, if not perhaps rogue; it is an agency like no other. Arguably it is the single most powerful and least accountable federal agency in the history of our nation."
The Republican-backed bills all passed with votes along party lines. Even if the measures pass the House, it is extremely unlikely they will be considered in the Democratic-controlled Senate or signed into law by President Obama.
During the vote, House Democrats opposed the measures, saying they were designed to cripple the CFPB.
"Behind this smoke screen, we all know the true purpose of this hearing is to give my Republican colleagues another chance to push for legislation to dismantle an effective and important agency by undermining its leadership, autonomy, and funding," said Rep. Maxine Waters, the lead Democrat on the panel.
The measures are supported by banking industry groups, which have pushed to give the other banking regulators more say in the CFPB's regulations. Under the Dodd-Frank law, the FSOC, of which CFPB is a member, can override the consumer agency's rule if there is a two-thirds agreement of its members.
Under a bill sponsored by Rep. Sean Duffy, R-Wis., the FSOC would be able to overturn a CFPB regulation by a majority vote if it found that it was "inconsistent with the safe and sound operations" of U.S. financial institutions.
"ICBA thanks the House Financial Services Committee members for advancing important bills to give prudential regulators a stronger, more meaningful role in CFPB rule writing," said Camden Fine, the president of the Independent Community Bankers of America. "These common-sense reforms will help ensure CFPB rules are balanced and that new rules do not conflict with safety and soundness principles or inhibit the nation's community banks from supporting economic growth in their communities."
