The Subcommittee on Financial Institutions and Consumer Credit held a hearing this week to discuss potential reforms to the Consumer Financial Protection Bureau (“CFPB”). Replacing the CFPB director, Richard Cordray, with a bipartisan five-member commission, was discussed among the legislative proposals. This proposal raises questions as Cordray was only recently (in July of this year) appointed for this position. CFPB’s data collections practices were also examined by the House subcommittee, which is a part of the Financial Services Committee. The members of the subcommittee requested more accountability and transparency in these practices: “These measures [proposals on CFPB’s reform]attempt to provide more accountability and transparency to an agency whose structure makes it susceptible to regulatory overreach and unbalanced rule writing,” as expressed by Shelley Moore Capito, Subcommittee Chairwoman.
In September, Cordray presented the CFPB’s semi-annual report before the full Financial Services Committee. After the presentation, questions were raised about the CFPB’s data collection practices and overall accountability. The Committee’s Chairman, Rep. Jeb Hensarling, said: “The CFPB is arguably the single most powerful and least accountable federal agency in the history of America.”
Thus, the need for the CFPB’s reform which led to the recent subcommittee meetings (another meeting was held in the beginning of October), didn’t come as a surprise to the industry. At the latest meeting, witnesses representing credit unions, community banks and other employers, testified about the need for the CFPB’s reform.