Apr 09 2014
Legislation Makes Much Needed Structural Changes to Enhance Accountability and Improve Oversight
WASHINGTON, D.C. – U.S. Senator Deb Fischer (R-Neb.) has introduced two bills offering structural reforms to the Consumer Financial Protection Bureau (CFPB). The Consumer Financial Protection Commission Act of 2014 (S. 2213) would replace the agency’s single director position with a five-member, bipartisan commission. Fischer’s second bill, The CFPB Improvement Act of 2014 (S. 2212), would change the requirement for the Financial Stability Oversight Council’s (FSOC) voting members to overturn CFPB regulations.
“The CFPB has an enormous amount of influence impacting all sectors of our economy and every consumer nationwide. Decisions governing such a powerful agency should reflect input from all sides, rather than placing broad regulatory authority in the hands of a single unelected official with little oversight from Congress,” said Fischer. “Similarly, the approval process for regulations issued by the CFPB requires changes to strengthen oversight. These two bills reform CFPB and FSOC’s structure to ensure greater accountability and enable the agency to more effectively carry out its mission of consumer protection.”
The Consumer Financial Protection Commission Act of 2014 replaces the Director of the CFPB with a bipartisan commission of five individuals. It also establishes that:
- Each member would be appointed by the President and confirmed by the Senate.
- Commissioners would each serve staggered five-year terms, and no more than three commissioners could be from the same political party.
- A Chair of the Commission position would be created. This position would be filled by one of the five commission members to fulfill administrative and other duties
- The legislation would not take effect until July 16, 2018, the day after the end of current CFPB Director Richard Cordray’s term.
In May of 2011, and again in February of 2013, 43 and 44 Senators, respectively, signed letters to President Obama requesting this reform.
Full text of the Consumer Financial Protection Commission Act of 2014 is available HERE.
The CFPB Improvement Act of 2014 changes the requirement for FSOC voting members to overturn CFPB regulations.
- Currently, two-thirds (seven)of the FSOC’s ten voting members are required to overturn CFPB regulations.
- This legislation would change the two-thirds requirement to a simple majority.
- It would also exclude the Director of the CFPB from such a vote, removing any individual bias.
Full text of the CFPB Improvement Act of 2014 is available HERE.
The reforms included in Senator Fischer’s bills were recently passed by the House of Representatives as part of H.R. 3193, legislation sponsored by Rep. Sean Duffy (R-Wis.). Duffy issued the following statement applauding the introduction of Fischer’s legislation in the Senate:
"I commend Senator Fischer for her efforts in the Senate to hold the CFPB accountable to the standards of transparency that they promised the American people, but have yet to deliver,” said Duffy. “This is a dangerously powerful and unaccountable agency and must be reined in. I will continue my efforts in the House and am glad to have a strong ally in the Senate."