Patrick McHenryChairman

Washington, February 6, 2012 -

Members of the Financial Services Committee continue advancing reforms that will bring much-needed accountability and oversight to the Consumer Financial Protection Bureau, a massive new government bureaucracy created by the Dodd-Frank Act.

On Wednesday, the Financial Institutions and Consumer Credit Subcommittee will hold a hearing on three CFPB reform bills.  Last year, the House approved other CFPB reforms that originated in the Committee.

“No Member of Congress opposes robust consumer protections, but many of us object to the structure of the CFPB.  It was designed in a way to avoid transparency and oversight, and it gives unprecedented and wide-ranging powers to a single individual,” said Chairman Spencer Bachus.  “The reforms we seek are common sense measures that will ensure the bureau fulfills its consumer protection mission while being accountable for its actions and use of resources.”

Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito said, “The questions surrounding the recent recess appointment of the CFPB director raise important questions about the unique placement of the bureau within the Federal Reserve.   Two of the bills before the Financial Institutions and Consumer Credit Subcommittee this week will address members concerns about the funding structure of the bureau and certain responsibilities of the CFPB director.    The third bill will address concerns that have been raised about the confidentiality of information shared with the bureau and whether or not the current legal protections match up with other banking regulators.”

The Subcommittee hearing will discuss the following three reform bills:

• H.R. 1355, the Bureau of Consumer Financial Protection Accountability and Transparency Act, introduced by Rep. Randy Neugebauer.  This legislation brings transparency to the CFPB’s funding and makes the CFPB accountable to Congress and the President for its spending.  Under the Dodd-Frank Act, the Federal Reserve must transfer to the CFPB whatever funds the CFPB Director requests, up to a certain percentage of the Fed’s operating expenses.  For fiscal year 2013, that amount equals $597 million.  If the CFPB Director deems this to be insufficient, the Director can ask Congress for an additional $200 million. H.R. 1355 moves the CFPB from the Federal Reserve System to the Treasury Department, where it could no longer be an agency autonomous from the executive branch.  In addition, the bill subjects the CFPB to the same congressional authorization, budget and appropriations process as the Treasury Department.
• H.R. 2081, introduced by Rep. Jim Renacci, removes the CFPB Director from the Board of Directors of the Federal Deposit Insurance Corporation and replaces him with the Chairman of the Federal Reserve Board.  The divergent mandates of the CFPB and the FDIC may present the CFPB Director with a conflict of interest while serving on the FDIC Board.  This legislation addresses those concerns and allows both agencies to fulfill their respective missions.
• H.R. 3871, the Proprietary Information Protection Act of 2012, introduced by Rep. Bill Huizenga. The legislation provides legal certainty that the disclosure of privileged information requested from financial institutions by the CFPB does not waive attorney-client privilege and open up the institutions to third-party subpoenas.