Republicans look to check ‘absurd’ Consumer Bureau powers

Republicans are offering bills that would change the top of the CFPB from having a single director to a bipartisan commission, which would ensure Republican input on its work.

“The powers of the bureau are simply too broad for a single director,” said Rep. Shelley Moore Capito (R-W.Va.).

Sen. Jerry Moran (R-Kan.) introduced similar legislation in the Senate Wednesday, which would also subject the CFPB’s budget to the congressional appropriations process. Currently, the CFPB is slated to receive its budget from the Federal Reserve without having to earn lawmakers’ approval.

Another bill, introduced by Rep. Sean Duffy (R-Wis.) would make it easier for other regulators to overturn rules made by the bureau.

Under current law, the Financial Stability Oversight Council (FSOC), which includes the heads of all top financial regulators, can overturn a CFPB rule if a two-thirds super-majority of the panel believes it would prove harmful to the entire financial system. The eventual director of the CFPB will be one of 10 voting FSOC members.

Republicans argue that arrangement makes it too difficult for other regulators to block CFPB rules, and are pushing a bill that would allow the FSOC to overturn rules by a simple majority, as long as the rules are inconsistent with the safe and sound operations of financial institutions.

“It’s absurd, it’s unheard of,” complained Finance Chairman Spencer Bachus (R-Ala.) about the current set-up. He singled out CFPB architect and Harvard law professor Elizabeth Warren for particular scrutiny.

“Professor Warren has done a great job of really fooling the national media into thinking, ‘Oh, this could easily be appealed,’ ” he said. “No one has gone past this crazy story […] that we’re just attacking Miss Warren or that we don’t want consumer protection.”

“If they’re able to hoodwink the American people, they’ve pulled a real sham here,” he added.

However, Democrats painted those attempts as an effort to return to the same environment that created the financial crisis.

“Any attempt to delay or weaken the CFPB could leave American families, their communities, and the economy as a whole exposed to many of the same risks that brought our financial system to the brink of collapse,” said Rep. Carolyn Maloney (D-N.Y.).

Democrats maintain that the CFPB will be subject to a number of limits. Rep. Brad Miller (D-N.C.) said it “probably has more checks on its authority and more accountability than any agency in government.”

Rep. Patrick McHenry (R-N.C.) dismissed that claim as “absolutely absurd,” suggesting that Democrats were downplaying the strength of the bureau.

“They were bragging about how powerful this agency was until after the election,” he said.

For its part, the CFPB also is pushing back against Republican attempts to curtail the agency before it begins its work.

“We are hard at work building the Consumer Financial Protection Bureau, which was created in response to the worst financial crisis since the Great Depression,” said Jen Howard, senior spokesperson for the CFPB in advance of the hearing. “Any attempt to delay or undermine the stand up of the CFPB could leave American families and the economy exposed to many of the same risks that brought our financial system to the brink of collapse.”