Congressional Republicans are setting their sights on the Consumer Financial Protection Bureau, laying out a series of proposals aimed at completely revamping the agency’s structure and rulemaking process.
This includes proposals to have Congress, not the Federal Reserve, fund the CFPB’s budget and turn the CFPB into a commission.
The U.S. House Committee on Financial Services held a hearing Thursday titled “Consumer Financial Protection Bureau: Ripe for Reform.” Before the hearing, Republicans, who hold a majority in the House, released a memo outlining their proposals.
“The agency is led by a single, partisan director, Rohit Chopra, who has routinely acted unilaterally and arbitrarily, often outside any statutory mandate, without engaging rulemaking in compliance with the Administrative Procedures Act, and even sometimes without adjudication,” committee Chairman Rep. Andrew Barr, R-KY, said in his opening remarks Thursday.
Thursday’s hearing and memo came a day after the CFPB released a list of “illegal junk fees”, including certain fees charged by mortgage servicers.
“For years, junk fees have been creeping across the economy,” CFPB Director Rohit Chopra said. The agency also said it plans to crack down on what it considers illegal junk fees.
Those include excessive late fees, charges for “unnecessary property inspections,” mortgage insurance premiums that the homeowners don’t actually owe, and a failure to waive fees for homeowners entering some loss mitigation options.
But House Republicans said in their memo that the CFPB’s current structure “affords very little oversight of the CFPB’s budget.”
It’s proposals include requiring that CFPB is funded by Congress, “allowing for greater oversight” by lawmakers. The bill would also rename the agency the Consumer Financial Empowerment Bureau.
A separate bill would convert the CFPB into a five person commission, eliminating the director and deputy director positions. This would mirror the structures of the Federal Trade and Federal Communications commissions.
Additionally, Republicans want to require the CFPB to identify metrics used to determine problems, and solutions, including metrics determining the “measurement of changes regarding consumer access to, and the cost of, consumer financial products and services.” The bill would also require the CFPB to strengthen “private sector participation in markets, without government interference or subsidies, to increase competition and enhance consumer choice.
Other proposals include requiring the CFPB to consider the impact its rules have on small business and to publish detailed justifications of its rules.
