House Committee Approves CFPB Bills

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, May 13, 2011.

The House Financial Services Committee has approved three bills that Republican members believe will provide greater oversight and accountability to the new Consumer Financial Protection Burea.

“These bills will help make sure the consumer protection rules issued by the CFPB are consistent, fair and do not endanger the safety and soundness of financial institutions,” said Committee Chairman Rep. Spencer Bachus, R-Ala.

Last week Elizabeth Warren, the Treasury Special Advisor who is setting up the CFPB, said the GOP bills were about “preventing the CFPB from operating effectively—a dangerous game to play in light of recent lessons in the marketplace and how quickly financial threats to consumers emerge.”

By a vote of 33 to 24 the committee approved H.R. 1121, which would establish a five-member bipartisan commission to head the bureau, rather than a single director.

The committee also adopted H.R. 1315, which states that the Financial Stability Oversight Council would need a simple majority vote, rather than a two-thirds vote, to set aside any CFPB regulation that is inconsistent with the safe and sound operations of U.S. financial institutions.

In addition, the committee approved H.R. 1667, which ensures a CFPB director is in place before regulatory authority is transferred to the new agency. If a Senate-confirmed director is not in place by July 21, then the CFPB would continue to operate under the Treasury Secretary’s authority.

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