The Independent Community Bankers of America (ICBA) has applauded the House Financial Services Committee for approving two ICBA-advocated bills that would strengthen governance of the Consumer Financial Protection Bureau and help ensure balanced rulemaking. The Responsible Consumer Financial Protection Regulations Act of 2013 (H.R. 2446) and the Consumer Financial Protection Safety and Soundness Improvement Act of 2013 (H.R. 3193) would make needed reforms to Consumer Financial Protection Bureau (CFPB) governance and rulemaking. Both bills are priority items in ICBA’s Plan for Prosperity regulatory relief platform, which is advancing through Congress.
“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,” ICBA President and CEO Camden R. Fine said. “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.”
H.R. 2446, sponsored by Rep. Spencer Bachus (R-Ala.), would change the structure of the Consumer Financial Protection Bureau so that it is governed by a five-member commission rather than a single director. Commission governance would allow for a greater variety of views and expertise at the bureau, build in a system of checks and balances, help ensure the actions of the CFPB are measured and nonpartisan, and support balanced and high-quality rules and consumer protection.
HR 3193, sponsored by Rep. Sean Duffy (R-WI), would strengthen the review standard for CFPB rules by authorizing the Financial Services Oversight Council to set aside any CFPB rule if a majority of the council, excluding the CFPB director, finds that it is “inconsistent with the safe and sound operations” of U.S. financial institutions. Current law requires a vote of two thirds of the council and a finding that the rule puts the banking or financial system at risk, which is an excessively high standard. In addition, the bill requires the CFPB to consider the impact of any rule on the financial safety or soundness of insured depository institutions.
ICBA has long advocated these provisions and testified on behalf of similar legislation in the 112th Congress. Other Plan for Prosperity provisions have already advanced in the House this year. The House Financial Services Committee last week approved H.R. 3329, introduced by Reps. Blaine Luetkemeyer (R-MO) and Patrick Murphy (D-FL), to increase the qualifying asset threshold of the Small Bank Holding Company Policy Statement from $500 million to $1 billion and to allow small savings and loan holding companies to be covered by its provisions. Additionally, the full House in March approved H.R. 749, also introduced by Luetkemeyer, to eliminate the requirement that financial institutions mail annual privacy notices even when no change in policy has occurred.