CFPB, House Republicans Hit the Ground Running - In Opposite Directions
The Consumer Financial Protection Bureau (CFPB) officially opened its doors yesterday and wasted no time before assuming its duties. The bureau sent letters to the CEOs of the financial institutions that fall under its supervision and opened its new consumer complaint hotline. In the coming week, it is expected to issue three reports to Congress: one examining the differences between credit scores sold to consumers and scores used by lenders to make credit decisions; one recommending a strategy for maximizing transparency and disclosure of exchange rate information; and one outlining the recruitment, training, benefits and retention plans for CFPB staff. The CFPB will also issue several interim rules, outlining protocols ranging from record-keeping to investigation and enforcement.
The House celebrated Dodd-Frank’s birthday by voting to change the structure and oversight authority of the Consumer Financial Protection Bureau (CFPB). By a count of 241-173, the House voted to replace the CFPB director with a five-person board, making it more similar to the leadership structures of the other financial regulators. The bill also empowers the Financial Stability Oversight Council (FSOC) to overturn CFPB regulations with a simple majority vote. Under Dodd-Frank, the FSOC needs a two-thirds vote to overturn any CFPB rulings. The House bill also requires that the CFPB have a Senate-confirmed director before it takes on any of its authority, not simply its authority over non-banks, as the Act requires. Ten Democrats voted for the measure, and one Republican, Rep. Walter Jones (R-NC), voted against it.
Most Democrats say the House bill is yet another attempt to undermine the CFPB’s authority. The bill now heads to the Senate, where it is unlikely to garner sufficient Democratic support to pass.
