Today, the Financial Services Committee of the House of Representatives will vote on legislation that would decidedly weaken the CFPB—or, as Elizabeth Warren put it, “stick a knife in its ribs.” Rep. Spencer Bachus (R-AL) introduced a bill (H.R. 1121) which would replace the director of the CFPB with a five-person commission. The CFPB needs strong leadership that can take action on behalf of consumers, not a commission subject to partisan infighting and delay.
The CFPB is currently the only banking regulator whose decisions could be vetoed by a council of other regulators, some of whom turned a blind eye to abusive and deceptive financial practices and contributed to the devastation of the financial crisis. H.R. 1315, sponsored by Rep. Sean Duffy (R-WI), would make it even easier for other regulators to overturn CFPB regulations, weakening its ability to enact effective consumer protections.
Rep. Shelly Moore Capito (R-WV) is sponsoring a measure (H.R. 1667) that would postpone the enactment of the CFPB until a director is confirmed, potentially allowing opponents to use the confirmation process to stop the agency from doing its job. This is no empty threat—last week, a group of Republican senators wrote to President Obama saying that they would stonewall the director confirmation process unless the CFPB was seriously weakened.
As Americans for Financial Reform writes,
This legislation sharply decreases accountability and muddles decision-making at the CFPB. It would also vastly expand the power of disgraced banking regulators to stop strong consumer protection measures. If enacted, these bills would virtually guarantee that the CFPB would be a weak and timid agency without the will or ability to curb the kind of financial abuses that caused the nation’s worst financial crisis since the Great Depression.
We call on legislators to stand up for consumers and oppose this legislation that would open the door to undue political influence over its crucial mission. We need a strong cop on the beat that can act decisively to protect consumers.