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House approves CFPB changes

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WASHINGTON (7/25/11)—Legislation that would increase leadership of the Consumer Financial Protection Bureau (CFPB) from a single director to a five-member commission, reform some operational rules, and make other key CFPB changes passed the House of Representatives by a 241-173 vote last week. The legislation (H.R. 1315) would also adjust the voting threshold needed for the Financial Stability Oversight Council to set aside or stay a CFPB issued rule to a simple majority, expand the FSOC’s review authority of CFPB rules, and require the CFPB leader to be confirmed by congress before any regulatory responsibilities could be transferred o that agency. The Credit Union National Association’s role in the larger financial reform debate was noted by legislators on both sides of the vote. House Financial Services Committee ranking member Barney Frank (D-Mass.), who opposed H.R. 1315, said that many of the problems that led to the CFPB’s creation “came from the unregulated, not from the financial institutions. And one of the things we do (in the Dodd-Frank bill), which is supported by the Credit Union National Association, is to cover the unregulated so that community banks and credit unions which did not cause this problem are protected from the pressures of unfair competition by the unregulated.” H.R. 1315 chief sponsor Sean Duffy (R-Wis.) said that his bill has “Main Street” not “Wall Street” appeal. He said that in addition to community banker support, “We go a step further,” and went on to cite Wisconsin CU League and CUNA backing for the provision that could reduce credit union burdens. Duffy called credit unions, “all people who didn't have any role in this financial crisis, all people in our communities who are looking out for consumers…” CUNA has supported part of H.R. 1315 that would make it easier for the FSOC to stay or set aside potentially burdensome CFPB rules, saying that that change would balance consumer protection with safety and soundness concerns. Although H.R. 1315 passed on a bipartisan House vote, the Senate prospects for the legislation are in doubt.