House Financial Services Committee Plans Major Overhaul of CFPB
Republican House Financial Services Committee members have outlined a major overhaul of the CFPB, including both a new name and stated mission. Learn why.
From a new name to a new mission, Republican committee members aim to completely redefine agency.
President Biden has proclaimed this week as “National Consumer Protection Week.”
And Republicans on the House Financial Services Committee have planned their own way of celebrating.
They want to protect consumers from the CFPB.
The committee’s Financial Institutions and Monetary Policy Subcommittee has scheduled a hearing Thursday titled “Consumer Financial Protection Bureau: Ripe for Reform.”
And the agenda is packed with witnesses who, based on past performance and their affiliations, are no fans of the regulatory principles espoused by CFPB Director Rohit Chopra. At such hearings, the minority party often gets one witness and that is the case with Thursday’s session.
The agenda also is packed with draft legislation that would overhaul the organization of the agency, as well as its work. That legislation does not have bill numbers because it has not been introduced yet, but drafts of the bill are listed in a memo released this week.
Who Is Testifying?
Witnesses scheduled to testify Thursday are:
–Bill Himpler, CEO of American Financial Services Association.
The association represents payday lenders and is among the plaintiffs in the lawsuit challenging the constitutionality of the CFPB because it is not subject to the appropriations process. A federal appeals court agreed and the U.S. Supreme Court last week accepted that case with oral arguments likely in the fall.
–Brian Johnson, managing director at Patomak Global Partners LLC.
Johnson served as CFPB deputy director under the Trump Administration, during which time the agency took on a more pro-business stance. Johnson was among those who helped establish the agency’s Task Force on Federal Consumer Law, which led to a lawsuit from consumer advocates who claimed it violated federal laws governing such panels. The Biden Administration settled that lawsuit and agreed to publish a disclaimer at the beginning of the Task Force’s final report.
The disclaimer notes the group was subject to the Federal Advisory Committee Act but did not comply with that law, and states that the “final report therefore should not be relied upon as a product of a federal advisory committee that was established or created in compliance with FACA.”
–Jessica Thompson, an attorney with the conservative Pacific Legal Foundation.
The foundation’s website describes Thompson as “a fierce advocate for individual liberty and free enterprise.”
–Devin Watkins, an attorney with the Competitive Enterprise Institute, a conservative think tank.
–Keith Ellison, Minnesota Attorney General.
The lone Democratic witness, Ellison is a former Democratic House member who has supported the CFPB’s strict regulatory regime. For instance, in 2019, he joined the agency in filing suit against three California companies for running a scheme he said was fraudulently promising borrowers student loan forgiveness.
Legislation to Be Proposed
In addition to the witnesses, the Financial Services Committee lists several discussion drafts of legislation they want enacted. Those bills include measures that would:
–Establish an Office of Economic Analysis at the CFPB that would review all proposed and existing guidance at the agency. The legislation also would revise the purpose of the agency to “strengthening private sector participation in markets, without government interference or subsidies, to increase competition and enhance consumer choice.”
–Bring the CFPB under the annual appropriations process and rename it the Consumer Financial Empowerment Agency.
–Establish a separate Office of Inspector General at the agency. Currently, the bureau’s oversight is combined with the Office of Inspector General for the Board of Governors of the Federal Reserve System.
–Require the agency, when issuing rules, to publish “a justification of the proposed rulemaking; a quantitative and qualitative assessment of all anticipated direct and indirect costs and benefits; alternatives to the proposed rulemaking; impacts on small businesses; and any assumptions, data, or studies used in preparing this information.”
–Establish a whistleblower program at the agency.
–Remove the CFPB from the Federal Reserve System and convert it to an independent commission. Credit union trade groups have long endorsed efforts to convert the agency into a commission.
Pushback From Progressive Group
Meanwhile, a progressive group, Accountable.US, has issued a report questioning the motives of House Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C., and Rep. Blaine Luetkemeyer, R-Mo., a member of the financial institutions subcommittee.
The group alleges that McHenry has accepted more than $5 million during his career from the “deep pockets of the financial industry,” adding that “he’s been pushing the agenda of banks and their trade groups for years.”
Luetkemeyer, the report said, has accepted more than $3.3 million from the financial industry. His family also previously owned a community bank.
Of course, the campaign contributions to the GOP lawmakers were made in accordance with federal law, however the progressive group still questions Luetkemeyer’s motives.
“Now that Luetkemeyer has the power to ensure Big Banks have their say on the House floor, it’s a guarantee he’ll be using his platform to ramp up his attacks on the Biden administration’s efforts to protect consumers,” Accountable.US concludes.