But this is not the only way in which the House GOP is aiming to do Wall Street’s bidding. The House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing today on a series of legislative proposals that House Republicans have offered that would reduce the independence of the Consumer Financial Protection Bureau (CFPB).
The most prominent of these efforts has been legislation sponsored by House Financial Services Committee Chairman Spencer Bachus (R-AL) that would change the CFPB from an agency with a single director to one run by a five-member commission. During the hearing, Bachus and the pro-bank lobbyists the GOP brought in to testify all sounded similar notes about the CFPB:
BACHUS: This is about giving one person total unbridled authority and power.
AMERICAN BANKERS ASSOCIATION: The resulting practically boundless grant of agency discretion is exacerbated by giving the head of the Bureau sole authority to make decisions that could fundamentally alter the financial choices available to customers.
U.S. CHAMBER OF COMMERCE: There is no other government official who serves for a fixed term, and is therefore exempt from Presidential control, exercises sole authority over an agency, and has sole power to spend hundreds of millions of dollars outside the congressional appropriation process.
Both the Chamber and the ABA — which represent the country’s biggest banks and did their best to scuttle financial reform before it became law — would like nothing more than to render the CFPB completely toothless. Chamber President Tom Donohue, in fact, has said that he wants the CFPB to “starve to death financially.” To that end, they’re using overblown rhetoric to describe an agency structure that’s quite typical.
After all, plenty of other agencies — including the banking regulators at the Office of the Comptroller of the Currency, the IRS, and many of the cabinet agencies — have single directors. Plus, the CFPB, unlike any other regulatory agency, can be overruled by another body: a two-thirds vote of the Financial Stability Oversight Council (FSOC) can overturn CFPB rules.
As Georgetown Law Professor Adam Levitan testified, “switching to a five-member panel would tilt the balance at the agency to gridlock and inaction.” And for House Republicans and their allies in the banking industry, that’s precisely the point. Remember, Bachus himself has said that Washington’s role is to “serve the banks.”