WASHINGTON – The White House on Wednesday said President Obama will veto any bill passed by Congress to limit the powers of the Consumer Financial Protection Bureau, which officially opens for business today.
The White House threat comes as the House is scheduled to vote today on a credit union-backed bill that will water down the powers of the new agency by expanding its governance from a single director to a five-member board and by lowering the threshold for the fledgling board’s oversight panel to overturn a decision by the director of the agency. Republicans in Congress have fought long and hard against the new consumer protection agency, which was part of last year’s Wall Street reform bill.
In a statement of administration policy, the administration’s Office of Management and Budget announced strong opposition to a GOP bill that would alter the consumer bureau, arguing it would “expose American consumers and the nation’s economy to the same risks that led to the 2008 financial crisis.”
The veto threat creates a stalemate over the director of the new agency, with Senate Republicans pledging to block any nomination to direct the consumer bureau until a five-person board is seated and the President promising to thwart all efforts to water down the new agency.
Both CUNA and NAFCU support the expansion of the agency’s governance to a five-person panel and the provision allowing a simple majority – instead of two-thirds – of the 10-person oversight committee (including a representative from NCUA) to overturn key decision, if the committee determines the decision poses a threat to a financial institution’s safety and soundness.
CUNA wants the bill to go even further, with a provision added that would allow the oversight committee to stay or set aside rules it decides are “unreasonably burdensome,” or in cases where rules would “present a burden to financial institutions that would outweigh the benefit to consumers.”
CUNA wants the new consumer agency to create an Office of Regulatory Burden Monitoring that would work with credit unions and banks to study regulatory burden with an eye toward simplifying regulations.
CUNA also wants the agency to expressly exempt credit unions from certain of its rules.