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Committee on Financial Services
United States House of Representatives
Press Release
Capito Announces Subcommittee Hearing On Proposals to Improve CFPB Structure
April 4, 2011
WASHINGTON: Financial Institutions Subcommittee Chairman Shelley Moore Capito announced today the Subcommittee will hold a hearing on legislative proposals to improve the structure of the Consumer Financial Protection Bureau (CFPB). The hearing will take place on Wednesday, April 6 at 10 a.m. in room 2128 Rayburn.
Subcommittee Chairman Capito said, “The purpose of this hearing is to review ways to make the CFPB more accountable and transparent. I believe, as do many of my colleagues, that the current framework does not allow for necessary and proper oversight of such a massive agency.”
Financial Services Committee Chairman Spencer Bachus said, “We are offering common-sense solutions that promote robust consumer protection and bring accountability to this new, massive government bureaucracy. These solutions also ensure that the CFPB’s regulatory initiatives are carried out in a manner that is consistent with the safety and soundness of the country’s financial system.”
The Subcommittee will discuss the following legislative proposals at Wednesday’s hearing:
Subcommittee Chairman Capito said, “The purpose of this hearing is to review ways to make the CFPB more accountable and transparent. I believe, as do many of my colleagues, that the current framework does not allow for necessary and proper oversight of such a massive agency.”
Financial Services Committee Chairman Spencer Bachus said, “We are offering common-sense solutions that promote robust consumer protection and bring accountability to this new, massive government bureaucracy. These solutions also ensure that the CFPB’s regulatory initiatives are carried out in a manner that is consistent with the safety and soundness of the country’s financial system.”
The Subcommittee will discuss the following legislative proposals at Wednesday’s hearing:
· The Responsible Consumer Financial Protection Regulations Act, introduced by Chairman Bachus on March 16. This bill replaces the Director of the CFPB with a five-member, bi-partisan commission to carry out all of the duties that would otherwise fall to the Director of the CFPB. This bill creating the commission is identical to a provision of the regulatory reform bill that passed the House last year but was later dropped by the Democratic conferees to the Dodd-Frank Act.
A commission structure offers several advantages over the single-Director model, including: it ensures multiple perspectives and different points of view are considered; and it promotes certainty and continuity by preventing a new Director from unilaterally reversing the decisions made by a previous Director.
· The Consumer Financial Safety and Soundness Improvement Act, introduced by Rep. Sean Duffy on April 1. This legislation streamlines the Financial Stability Oversight Council’s review process of CFPB rules. Currently, the Financial Stability Oversight Council (FSOC) has the ability to review rulemaking by the CFPB, but must meet virtually impossible requirements in order to overturn any CFPB rulemaking. Among the standards the FSOC must meet under current law to overturn a rule are: two-thirds of FSOC members must approve; the FSOC must find the rule endangers the stability of the entire financial system; the FSOC has only 90 days to review the proposed rule; and a review petition must be filed within 10 days of publication in the Federal Register of the draft rule.
The bill proposed by Rep. Duffy improves the FSOC review process by changing the vote to overturn a CFPB rule from a super-majority of two-thirds of the FSOC to a simple majority; ensuring the FSOC must set aside a rule if it is inconsistent with the safe and sound operations of United States financial institutions; and giving the FSOC sufficient time to consider the safety and soundness implications of rules.
· The Subcommittee will also consider two discussion drafts authored by Subcommittee Chairman Capito. One proposal removes the prudential regulators’ ability to allow the CFPB to participate in bank examinations before responsibility for promulgating all new federal consumer financial protection regulations is transferred to the CFPB on July 21. The second proposal prevents that transfer from taking place unless and until a CFPB Director has been appointed and confirmed by the Senate.
Witnesses scheduled to testify at Wednesday’s Subcommittee hearing:
Panel I:
Panel I:
Leslie R. Andersen, President and Chief Executive Officer, Bank of Bennington, Nebraska
Lynette W. Smith, President and Chief Executive Officer, Washington Gas Light Company Federal Credit Union
Jess Sharp, Executive Director, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce
Hilary Shelton, NAACP
Hilary Shelton, NAACP
Panel II
Noah H. Wilcox, President and Chief Executive Officer, Grand Rapids State Bank, Minnesota
Noah H. Wilcox, President and Chief Executive Officer, Grand Rapids State Bank, Minnesota
Rod Staatz, President and Chief Executive Officer, State Employees Credit Union of Maryland
Richard Hunt, President, Consumer Bankers Association
Adam Levitin, Professor, Georgetown University.
Adam Levitin, Professor, Georgetown University.
Committee on Financial Services • 2129 Rayburn House Office Building • Washington, DC 20515 • (202) 225-7502
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For Press Inquiries: (202) 226-0471