WASHINGTON Dec 7 Bank lobbying groups are
pressing the U.S. Senate to once again work on reforming the
country's consumer financial watchdog agency - but this time
around they may see those changes become reality.
In a letter to Senate leaders released on Wednesday the
groups, including the Consumer Bankers Association and the
Credit Union National Association, called for legislation to
change the leadership of the Consumer Financial Protection
Bureau from a single director to a five-member commission.
They also asked Congress to void the CFPB's recent rule on
prepaid cards and halt work on regulations for mandatory
arbitration, payday lending, and third-party debt collection
using a law known as the Congressional Review Act.
The CFPB's sole director has "unprecedented authority over
financial institutions, with minimal oversight," they wrote in
the letter, which was also signed by the Independent Community
Bankers of America and the National Association of Federal
"As the sole decisionmaker, the director can promulgate
regulations and levy enforcement actions that have sweeping and
longlasting effects on credit availability for consumers," the
Many have supported commission leadership since the CFPB was
first created in the 2010 Dodd-Frank Wall Street reform law to
protect everyday consumers from bad actors in the areas of
mortgages, student loans, credit cards and banks. Recently, the
CFPB and other agencies fined Wells Fargo & Co $185
million for creating fake accounts.
Republicans drafted the first Senate bill to change the
CFPB, currently headed by Richard Cordray, in 2012 and then
introduced similar legislation in the following three years. In
the House of Representatives, the Financial Services Committee
recently approved a sweeping bill that would also create a
commission to run the agency.
Democratic President Barack Obama, who championed
Dodd-Frank, has always stood in the way of establishing a
commission with his veto pen. President-elect Donald Trump, a
Republican, is expected to support any CFPB changes.
The single-director structure allows the CFPB to move
quickly and eliminates the risk of protracted fights among
commission members, proponents say.
A three-judge panel in the U.S. Court of Appeals for the
District of Columbia recently agreed the director has too much
power, although it ruled that could be remedied by allowing the
president to fire the director without cause. The government has
petitioned for a review of the decision by the entire court,
which has signaled it will approve taking up the review before
Trump's Jan. 20 inauguration.
(Reporting by Lisa Lambert; Editing by Jonathan Oatis)