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A new legislative push to reconstruct the leadership of the Consumer Financial Protection Bureau (CFPB) in to a five-person commission has received strong support from leading financial services and business trade groups.
The proposed legislation–HR 1226, introduced by Rep. Randy Neugebauer (R-TX), chairman of the House Financial Institutions and Consumer Credit Subcommittee–would rename the CFPB as the Financial Product Safety Commission and would replace the Bureau’s director with a presidentially appointed five-member commission serving five-year terms. The initial commission members would serve on staggered terms to enable a scheduled turnover that prevents the White House from packing the commission in a single sweep of appointments. The commission’s chairman would also be a presidential appointment.
The legislation would also take the Bureau away from its Federal Reserve funding source and would require that it operates under its own budget appropriations.
“Today, I have introduced a bill to change the Bureau’s structure from Director-led to a bipartisan five-person commission appointed by the President,” said Rep. Neugebauer. “Sen. Elizabeth Warren, my former colleague Barney Frank, and even President Obama originally supported a board leadership structure. In fact, then-Professor Warren’s original idea for this agency proposed a bipartisan five-person commission. This bill is not an attempt to weaken the CFPB, it is a push to strengthen the CFPB and ensure greater consumer protections for the American people. I look forward to working with my colleagues on the Financial Services Committee and in Congress to move this much-needed bill forward.”
The legislation was applauded by a coalition of eight trade groups–the American Bankers Association, American Financial Services Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America, National Association of Federal Credit Unions and U.S. Chamber of Commerce–that echoed Rep. Neugebauer’s concerns on realigning how the CFPB operates.
“A commission would serve as a source of balance and stability for consumers and the financial services industry by encouraging internal debate and deliberation, ultimately leading to increased transparency,” said the trade groups in a public letter. “Moreover, a commission will further promote CFPB’s ability to make bipartisan and reasoned judgments; will offer consumers the protection they deserve and the industry the certainty it needs, which in turn will help strengthen the economy; and will avoid the risk of politically motivated decisions, which could result in harm to consumers.”