House Financial Services Chairman Spencer Bachus explained back in December that he believes the role of Congress is “to serve the banks.” During his tenure, he has certainly followed through on that philosophy, proposing several pieces of legislation that would roll back key parts of the Dodd-Frank financial reform law.
One of Bachus’ top targets has been the newly-created Consumer Financial Protection Bureau (CFPB), the agency meant to enforce consumer protection in the financial services market (which no agency before now was solely tasked with). Bachus has introduced a bill that would change the structure of the agency from one with a director to one with a five-person board.
He has insisted that this is out of legitimate concern that the agency is too powerful, and not part of the Republican campaign to prevent Harvard Law professor Elizabeth Warren from taking the reins at the agency. (Warren is currently setting up the agency as an Assistant to the President.) “This is not about Elizabeth Warren,” Bachus insisted early last month. However, yesterday, during a speech before the Independent Community Bankers of America, a trade group, Bachus added a line to his pronouncement:
Bachus introduced a bill in March that would replace the post of director with a five-member bipartisan commission, saying the structure imposed by Dodd-Frank places too much power in the hands of one person.
“It has nothing to do with Elizabeth Warren, it really has nothing to do with her,” Bachus said.
After a pause, Bachus drew laughs from the bankers when he said, “I will not take a lie detector test.”
Republicans have crusaded against Warren receiving the nomination to be the agency’s first director, due to her long, impressive record as a consumer advocate. The financial services industry wants to kneecap the CFPB, and neutering the ability of the director to take action, be it Warren or someone else, is on top of the wish-list. But even if Bachus is genuine in his intentions, the notion that the CFPB is too powerful is absurd.
After all, plenty of agencies, including the banking regulators at the Office of the Comptroller of the Currency, the IRS, and many of the cabinet agencies, have a single administrator. And unlike those agencies, the CFPB has a board above it — the Financial Stability Oversight Council — that can veto CFPB rules.
The CFPB is intended as a vital counterweight to banking regulators that are focused on keeping banks profitable (even if that profitability comes from ripping off consumers). Bachus, in his effort to serve the banks, is trying to undermine that important mission.