Consumer Protection Bills that Bring Transparency and Accountability to CFPB Have Been Approved

Yesterday, the House Financial Services Committee approved six bills which will bring accountability, transparency and oversight to the Consumer Financial Protection Bureau (CFPB).  The questions regarding the CFPB’s overall accountability were raised during the CFPB President’s presentation of the CFPB’s semi-annual report before the Financial Services Committee in September of this year which was discussed in a previous blog. The bills will reform the CFPB’s structure by replacing the CFPB director with a five-member bipartisan commission; promote greater transparency and accountability at the CFPB; prohibit the CFPB from collecting personal financial information about consumers without their prior consent; and other issues.  Below is a brief summary of each bill.

H.R. 3519, the Bureau of Consumer Financial Protection Accountability and Transparency Act, subjects the CFPB to Congressional oversight through the regular appropriations process, thus promoting greater accountability and transparency.

H.R. 2446, the Responsible Consumer Financial Protection Regulations Act of 2013, replaces the CFPB’s single director with a bipartisan five-member commission appointed by the president.  This commission will promote more stable and reasoned rule-making.  Other federal agencies that are in charge of investor and consumer protection are led by multiple individuals, and this type of leadership is consistent with many federal banking regulators.

H.R. 2571, the Consumer Right to Financial Privacy Act of 2013, prohibits the CFPB from collecting personal financial information about consumers without their prior consent or knowledge.  Since the CFPB collects confidential financial information on millions of Americans, this bill protects consumers’ private financial lives from intrusion by their government.

H.R. 3183, a bill to provide consumers with a free annual disclosure of information the Bureau of Consumer Financial Protection maintains on them.  This bill was introduced when it was revealed that the CFPB collects millions of consumer’s private financial records.  The disclosure will be provided annually to all consumers at no charge.

H.R. 3193, the Consumer Financial Protection Safety and Soundness Act of 2013, requires the CFPB to be considerate of soundness and safety of financial institutions in its rulemaking.  The bill provides an oversight of CFPB rules and regulations that may undermine the soundness and safety of financial institutions.

H.R. 2385, the CFPB Pay Fairness Act of 2013, achieves pay parity for CFPB with comparable product regulatory agencies by setting the basic rates of pay for CFPB employees on the General Services scale.  Currently, CFPB employees’ basic pay rates are set by the CFPB Director.

As said Chairman Jeb Hensarling (R-TX), “These are the modest, common-sense bills that bring a modicum of accountability and transparency to the CFPB.”  To see the Memorandum of Committee on Financial Services that reflects a description of the bills, please click here.

For more information on these approved bills and their interpretation, please contact Joe Messer at jmesser@messerstrickler.com or by calling Joe at (312) 334-3476.