Witnesses testifying before a House Subcommittee on Wednesday expressed support for legislation to change the leadership structure of the new Consumer Financial Protection Bureau (CFPB) so it is governed by a bipartisan commission rather than a single director appointed by the President.
The Subcommittee on Financial Institutions and Consumer Credit on Wednesday held a hearing to review several proposals that have been introduced to improve the structure of the CFPB. Among the proposals that were discussed is legislation introduced by Financial Services Committee Chairman Spencer Bachus, H.R. 1121, which would put a five-member, bipartisan commission in place to run the CFPB.
Chairman Bachus’s bill is identical to what passed the House of Representatives last year when it considered financial regulatory reform.
“Having the CFPB led by a bipartisan commission received strong support from Republicans and Democrats in the last Congress because it makes sense. The CFPB will do a better job carrying out its mission if it is led by a bipartisan commission rather than a single director,” said Chairman Bachus.
Witnesses at the Subcommittee hearing agreed. Below are excerpts from their testimony submitted to the Subcommittee:
“Commission governance would allow for a variety of views and expertise on issues before the Bureau and thus build in a system of checks and balances that a single director form of governance simply can’t match. The commission model, which has worked well for the FDIC, SEC, and FTC, would help ensure that the actions of the CFPB are measured, non-partisan and result in balanced, high quality rules and effective consumer protection.”
-- Noah Wilcox, President and CEO of Grand Rapids State Bank in Grand Rapids, Minnesota and a member of the Executive Committee of the Independent Community Bankers of America
“…we support a commission-led model, instead of a single Director, to minimize concern a single powerful director might adopt rules with harmful unintended consequences. A commission or board has been effectively used in various forms by a large number of federal agencies including: the Federal Reserve Board, the Federal Trade Commission, the Federal Deposit Insurance Corporation, and the Securities Exchange Commission. Even the Consumer Product Safety Commission, which was a model for the creation of the Bureau, is headed by a commission. The benefit a commission or board provides is the opportunity for different perspectives to be brought to bear on an issue so that more than one side can be discussed…It is worth noting the House-passed version of the bill which became Title X of the Dodd-Frank Act included a commission as part of the leadership of the consumer protection agency that was the precursor to the Bureau. This is a better model for leadership of a newly formed agency with such unprecedented power and resources.”
-- Richard Hunt, President of the Consumer Bankers Association
“ABA believes that a board or commission structure is appropriate to address the unfettered authority of the Bureau’s director to impose new rules. It would broaden the perspective on any rulemaking and enforcement activity of the Bureau, and would provide needed balance and appropriate checks in the exercise of the Bureau’s authority. It will facilitate continuity of the organization and enhance predictability about rulemaking over time. Accordingly, ABA supports the commission concept introduced in H.R. 1121 by Chairman Bachus.”
-- Leslie Andersen, President and Chief Executive Officer, Bank of Bennington in Bennington, Nebraska and chairman of the Government Relations Council of the American Bankers Association
“NAFCU is pleased to see H.R. 1121, legislation introduced by Chairman Bachus and others to create a 5-person commission to govern the CFPB. We believe a 5-person Board has benefits over one single director.”
-- Lynnette Smith, President and CEO of Washington Gas Light Federal Credit Union in Springfield, Virginia