Consumer advocate groups sounded an alarm on Tuesday over three bills scheduled to be marked up Wednesday by members of the House Financial Services Committee that the groups say would hobble the Consumer Financial Protection Bureau (CFPB).
The three bills are: H.R. 1121, the Responsible Consumer Financial Protection Regulations Act of 2011, sponsored by Rep. Spencer Bachus (right), R-Ala., chairman of the House Financial Services Committee, which would replace the CFPB’s one director with a five-member board. H.R. 1315, the Consumer Financial Protection Safety and Soundness Improvement Act of 2011 ; And the yet-to-be-named bill that would postpone the July start-up date for the CFPB until a director for the agency has been named.
Travis Plunkett, legislative director at the Consumer Federation of America (CFA), said on a conference call on Tuesday, that if enacted, “all three of these bills would ensure a weak and timid CFPB.” Plunkett said that replacing the CFPB’s one director status with a five-member board would “stop the [CFPB] from acting quickly in helping consumers.”
Plunkett noted, too, that H.R. 1315 would "expand the ability of other regulators to 'veto' proposed rules by the CFPB." This bill, he continued, "is a very dangerous piece of legislation because it would handcuff the CFPB and make it hard for [the agency] to do its job."
Ed Mierzwinski, director of U.S. PIRG’s consumer program, said on the same conference call that the bills “aren’t about reasonable oversight [of the CFPB],” rather “they are an attack on consumer protection.”
Elizabeth Warren (left), chief architect of the CFPB, said in testimony before a House Financial Services Subcommittee in March that a director to head the agency would be named “soon.” Mierzwinski said on the call that while President Obama has not yet named a director, “Warren has not rejected” being nominated, and “there is a possibility she will get the nomination.” Warren, he continued, has the support of U.S. PIRG, and the “small bank lobby may even end up supporting her.”
While the three bills will likely get approved by House Republicans, they will not receive support from democrats who still hold a majority in the Senate, specifically Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee. But Plunkett with CFA said that despite lack of support from Democrats, House Republicans may still acheive their goal, which is "to intimidate the consumer bureau so it doesn’t act to protect consumers.”