House rejects substantive Democrat amendments to consumer finance protection bill

Among other things, the bill would change the CFPB from a one-person director to a five-member commission, and would also allow CFPB regulations to be overturned by a simple majority of the new Financial Stability Oversight Council (FSOC), not a two-thirds majority. Republicans blocked several attempts to change these provisions.

For example, in a 170-239 vote, the House rejected an amendment from Rep. Sheila Jackson Lee (D-Texas) that would restore the two-thirds majority vote needed in the FSOC. And by voice vote, members rejected language from Rep. Carolyn Maloney (D-NY) that would have removed all FSOC oversight of the CFPB.

Rep. Brad Miller (D-NC) proposed that any bank challenging a CFPB rule must explain precisely how the rule would damage the financial industry. He said this is needed because the FSOC would be required under the bill to strike the rule. However, his amendment failed 175-238.

Another amendment from Jackson Lee to put a time limit on FSCO decisions was rejected 175-240.

And, another proposal from Maloney to allow the CFPB to operate under authority from the Treasury Department if no director is put in place was rejected 168-244. Democrats argued that Maloney’s language is needed because Senate Republicans have vowed to block all nominations to that post until the authority of the bureau is scaled back.

Richard Cordray was announced on Monday as President Obama’s pick to lead the CFPB, but Republicans said they would block his confirmation.

The House did accept some amendments to the bill. Members accepted language from Rep. Peter DeFazio (D-Ore.) that would prevent members of the FSOC, which is made up of bank regulators, from voting on a CFPB regulation if it would affect a banking institution that the person was employed at within the last two years.

Debate on this language grew testy as Rep. Shelley Moore Capito (R-W.Va.) said Republican oppose it because it could limit the availability of talent to serve on the CFPB. When DeFazio said his language would only result in limited exclusions, Capito said she still opposes it, but offered no reason why.

As she ended her comments, she could be heard saying DeFazio’s language “really isn’t a bad amendment.” House Financial Services Committee Ranking Member Barney Frank (D-Mass.) then rose to complain that Republicans did not seem to have any principled reason for opposing the language at all.

“That’s an inappropriate way to deal with a serious issue,” he said. DeFazio’s amendment was ultimately approved by voice vote.

Also accepted was language from Rep. Judy Chu (D-Calif.) that requires the CFPB to consider how language barriers can lead to abusive lending practices, and language from Rep. Mike Quigley (D-Ill.) that requires FSOC meetings to be broadcast over the Internet. Both of these amendments were accepted by a voice vote.

Two Republican amendments were also accepted by voice vote. One from Rep. Erik Paulsen (R-Minn.) would allow non-voting members of the FSOC to petition against CFPB regulations, and the other from Rep. James Lankford (R-Okla.) would require an annual report on all CFPB regulations.

A third Republican amendment from Rep. Scott Rigell (R-Va.) would require the CFPB to conduct analyses on the impact of proposed rules on the financial industry and on the ability of consumers and small businesses to access credit. This language was accepted 246-167.