Banking Associations Call for Changes to CFPB Structure
In a letter to Senate leaders, the heads of four banking industry associations argued that the Consumer Financial Protection Bureau should be led by a bipartisan commission, rather than an individual director. The push comes months after an appeals court held that the current structure gives the CFPB director too much power.
The leadership structure of one of the more controversial federal government agencies, launched during the Obama administration, could change significantly after President-elect Donald Trump takes office.
Among those pushing for changes to the Consumer Financial Protection Bureau (CFPB) is a group of banking associations. On Wednesday, a coalition of trade groups sent a letter to Senate leaders calling for a governance restructuring that it says would boost accountability. The approach, according to a Reuters report, would implement a bipartisan commission of appointed officials, like the one that governs the Federal Communications Commission.
“The current single-director structure leads to regulatory uncertainty for consumers, industry, and the economy. In contrast, a Senate-confirmed, bipartisan board or commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement over financial institutions that is more in keeping with other financial regulators,” the letter [PDF]—signed by presidents of the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federal Credit Unions—stated.
A governing commission has been suggested in the past—including by a federal appeals court, which ruled in October that the CFPB’s structure is unconstitutional because it gives too much power to a single individual, who may be removed only with cause. The U.S. Court of Appeals for the District of Columbia held that the agency should be restructured to allow the president to remove the CFPB director at any time.
The plan to restructure was included by House Republicans in their continuing resolution bill. The Senate version did not include the changes, effectively tabling the issue until the new president is sworn in.
The proposal remains controversial. On Wednesday, Morning Consult reported that incoming Senate Minority Leader Chuck Schumer is unwilling to consider governance changes to the CFPB.
If a political fight does take place, it won’t be the first involving the CFPB: The agency has been at the center of much political tumult, with the approval process for its first director, Richard Cordray, stalled for more than two years and caught up in a controversy over recess appointments.