WASHINGTON Republican lawmakers, emboldened by Friday’s court ruling overturning President Obama’s recess appointments, are renewing their efforts to change the structure of the nascent Consumer Financial Protection Bureau.
It is not clear what impact, if any, Friday’s ruling will have on the CFPB, but Republican lawmakers are confident it will be extended to last year’s recess appointment of Richard Cordray to be director of the new agency in the face of GOP opposition.
“This ruling makes clear that the president’s alleged recess appointment of the CFPB director is unlawful or unconstitutional or both,” said Rep. Jeb Hensarling, Republican chairman of the House Financial Services Committee, about the ruling overturning President Obama’s appointment of three National Labor Relations Board members. “It also clearly calls into question the legal validity of any and all actions undertaken by the CFPB since this appointment was made, adding even greater uncertainty to our still struggling economy.”
Hensarling blasted the Dodd-Frank Act and the provision creating the new consumer agency during his remarks last September at NAFCU’s Congressional Caucus. “I do believe that, regrettably, you have been victimized by a legislative drive-by shooting known as Dodd-Frank,” Hensarling said, to applause. Hensarling and his Republican colleagues, who controlled the House, tried several times in the last Congress to repeal Dodd-Frank but were rebuffed by the Democrat-controlled Senate. The Texas Republican, since then named chairman of the Financial Services Committee, said Friday his committee will once again review the proposals, also defeated in the last Congress, that would replace the single CFPB director with a multi-person board and give Congress closer scrutiny of the new agency’s purse strings.
“As it is currently structured, the CFPB is the most powerful and least accountable agency in all of Washington,” said Hensarling. “The Dodd-Frank Act places the CFPB under the control of a single person who has sole authority to command more than 1,000 government employees and spend hundreds of millions of dollars no questions asked. In addition, the CFPB director has unprecedented power to decide what financial products and services will and will not be available to everyday American consumers. No one, unelected bureaucrat should have the power to deny a credit card to a hardworking single mother who is trying to put food on the table for her children.”
“Congress and the administration should take this opportunity to make common sense reforms to the CFPB so it is transparent and accountable to the American people. At a bare minimum, the CFPB should be governed by a bipartisan commission which is how other federal agencies charged with consumer or investor protection operate. And to ensure there is proper oversight of this massive bureaucracy, the CFPB should be subject to the same appropriations process as other agencies. The House passed similar legislation in the last session of Congress and our committee will once again advance a proposal to bring accountability and oversight to the CFPB.”