The chief executive of a major financial services trade group is calling for a change in how the Consumer Financial Protection Bureau (CFPB) unilaterally picks the successor for its director.
In an op-ed column published in The Hill, Consumer Bankers Association (CBA) President and CEO Richard Hunt pointed out that the CFPB is the only federal regulatory agency where a deputy director is chosen internally by the agency and has the authority to become director if the current agency chief leaves the job.
“The Dodd-Frank Act is clear that the president picks the CFPB director with the advice and consent of the Senate,” Hunt wrote. “But who fills the director’s shoes when the office is vacant (until the president picks a successor and he or she is confirmed)? At the CFPB, the number two post is handpicked by the sitting director and does not require a presidential nomination or Senate confirmation. If the director leaves the CFPB before his or her five year term ends, the handpicked deputy director takes over. The deputy director would then have all the power of a director for an indefinite term with none of the external checks that are so fundamental to our form of democratic government.”
Exacerbating the problem is the lack of a deputy director at the CFPB. Steve Antonakes, the previous deputy director, left last summer to take an executive position in banking, and no permanent replacement was named. Meredith Fuchs has served as acting deputy director since Antonakes’ departure, and she will be replaced next week when David Silberman takes over as acting deputy director.
For Hunt, the solution to the problem is replacing the executive hierarchy of the CFPB with a bipartisan commission.
“If the agency were headed by a commission instead of an individual, this issue would not arise,” he stated. “Other Senate-confirmed commissioners would be in place to serve when the chairman departs. If the CFPB is to be a strong and effective regulator for the long haul, a bipartisan commission structure would also ensure a more balanced, fair, deliberative approach to supervision, regulation, and enforcement. Most importantly, it would offer a stable form of leadership that can preserve the agency’s role regardless of which political party is in the White House.”
Hunt added that continuing this set-up can fuel the temptation for running the CFPB as a partisan entity.
“Concentrating the CFPB's authority in the hands of one person—particularly if this person is not Senate confirmed, as in the case of an acting director—threatens the very foundation of the agency as an objective, neutral regulator,” he warned. “A bipartisan commission would better safeguard internal deliberation and constrain the CFPB's ability to make politically motivated or ill-informed decisions, including the de facto appointment of an unconfirmed director.”
