Magazine article American Banker

As CFPB Takes Flight, GOP Bill Aims to Clip Its Wings

Magazine article American Banker

As CFPB Takes Flight, GOP Bill Aims to Clip Its Wings

Article excerpt

Byline: Kate Davidson and Joe Adler

WASHINGTON - House Republicans celebrated the Consumer Financial Protection Bureau's first day by advancing a bill that would dilute the bureau's authority.

The legislation, which is expected to easily pass the Republican-controlled House, would replace the agency's director with a five-member commission, make it easier for other regulators to override its rules and suspend its powers until a permanent leader is in place. Republicans said the changes are necessary to hold the bureau more accountable. Democrats said the GOP wantsto dismantle the agency.

"Today there is an assault on the most import thing that's ever been done to protect consumers in the financial area," Rep. Barney Frank, D-Mass., said on the House floor. "This notion that they're just trying to improve it is belied by the fact that they're trying to kill it."

The bill was brought to the House floor as the CFPB officially opened for business Thursday.

Republicans have complained that the bureau's structure bestows it with too much power and not enough oversight.

A similar measure has been introduced in the Senate, where Republicans have vowed to block the nomination of a director until their demands are met. But the bills are unlikely to win Senate approval while the Democrats are in power, and the president has vowed to veto any measure that would undermine the bureau's effectiveness.

Rep. Spencer Bachus, the chairman of the House Financial Services Committee and a co-author of the House bill, said that it has been mischaracterized. …

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