U.S. Sen. Jerry Moran (R-KS), Ranking Member of the Senate Committee on Appropriations Financial Services and General Government Subcommittee, has introduced legislation to reform the structure of the new Consumer Financial Protection Bureau (CFPB). The Responsible Consumer Financial Protection Regulations Act of 2011, S. 737, would replace the single CFPB director with a Senate-confirmed five-person commission—similar to the leadership structure of the Securities & Exchange Commission (SEC), Commodity Futures Trade Commission (CFTC) and Federal Trade Commission (FTC). It would also subject the CFPB to the regular appropriations process like most federal agencies.
“While my concerns with Dodd-Frank extend beyond the structure of the CFPB, this legislation is an important first step toward making sure Congress has the oversight authority necessary for such a powerful agency,” said Sen. Moran. “Allowing a single unelected official to define their own jurisdiction and regulate vast segments of our economy without accountability or restraint is a ‘reform’ that should be rejected.”
The Dodd-Frank Act currently allows the CFPB director to set his or her annual budget by withdrawing funds directly from the Federal Reserve, rather than going through the annual Congressional appropriations process like most independent agencies. Additionally, Dodd-Frank denies the Federal Reserve any authority to deny or adjust the CFPB director’s request. The Responsible Consumer Financial Protection Regulations Act of 2011 would subject the CFPB to the annual appropriations process, authorizing funding levels for FY 2011 and 2012 equal to the president’s estimate of need.
“History has shown that the ‘power of the purse’ is a critical tool that Congress employs to hold agencies accountable,” said Sen. Moran. “The CFPB has more power and authority than almost any independent agency in history and asking them to present a budget to Congress for approval is a very modest request.”