House Republicans this week passed a trio of bills aimed at reducing the independence of the Consumer Financial Protection Bureau (CFPB) that was created by the Dodd-Frank financial reform law. These changes — including replacing the Bureau’s Director with a five-person commission — would strike at the heart of the Bureau’s independence.
Not to be outdone, Senate Republicans sent a letter to President Obama this week saying that they will not vote to confirm a Director for the Bureau — who is supposed to be in place by July 21 — unless several changes are made to the Bureau’s structure:
As presently organized, far too much power will be vested in the CFPB director without any effective checks and balances. Accordingly, we will not support the consideration of any nominee, regardless of party affiliation, to be the CFPB director until the structure of the Consumer Financial Protection Bureau is reformed.
For starters, the notion that the CFPB has some unprecedented amount of power is absurd. Plenty of agencies are run by a single director, and the CFPB’s rules can already be vetoed by a two-thirds vote of the Financial Stability Oversight Council, which is tasked with policing systemic risk in the financial system.
Interestingly enough, two of the letter’s signatories — Sens. Susan Collins (R-ME) and Olympia Snowe (R-ME) — voted for the Dodd-Frank law, complete with the CFPB in its current form. In fact, during the Dodd-Frank debate, Snowe helped Democrats defeat a Republican proposal that would have scrapped the CFPB in favor of a consumer protection council.
Both Snowe and Collins have been running to their right recently, with Snowe in particular tacking that way in anticipation of a 2012 primary challenger. Yesterday, in fact, Snowe blocked a small business bill that she authored, throwing a fit over not receiving a vote on an amendment she authored with Sen. Tom Coburn (R-OK) that would block federal agencies from implementing regulations. She had previously called for a “clean” version of the small business bill to be passed.
The practical upshot of Senate Republicans refusing to confirm a nominee is that President Obama will have no choice but to make a recess appointment. But not every Senate Republican appears to be on-board with the GOP push to kneecap the CFPB, as both Sens. Scott Brown (R-MA) and Lisa Murkowski (R-AK) did not sign the letter to Obama.