CFPB Under Attack

(11 am. – promoted by ek hornbeck)

Back in April, we put together an episode to go over the different attacks being levied against the Consumer Financial Protection Bureau (CFPB) and Elizabeth Warren. And last week, during a House Oversight subcommittee hearing that we covered extensively, the animosity harnessed in the legislation we summarized was clearly on display.

The treatment of Ms. Warren is crucial to understanding the motivations behind the attempts to strip the CFPB of power before any of its authority goes into effect. We knew this issue was going to heat up as we drew nearer to July, when much of the CFPB’s authority becomes active.

To account for recent developments, we are re-releasing Episode 10, entitled “Stopping CFPB”. Along with it is an up-to-date one page summary that accounts for recent developments.

Updated one-pager below the fold.

90 Second Summaries: Season 2, Episode 10

Proposals to Limit Authority of the Consumer Financial Protection Bureau

Click here to download this summary (pdf)

Status: Assigned to House Financial Services Subcommittee on Financial Institutions and Consumer Credit. Hearing held on the issue 4/6/11. All three bills passed out of the subcommittee on May 4th and the full committee on May 13th, on mostly party-line votes. Will likely reach the House floor sometime in June.

Senate Companion: S.737, sponsored by Jerry Moran. Companion to H.R. 1121. Introduced 4/6/11 and assigned to Banking Committee. Republicans will likely attempt to attach it as a rider to appropriations or other must-pass legislation.

Purpose: One of the most controversial items of the Dodd-Frank financial reform bill, the Consumer Financial Protection Bureau carries great promise for supporters of reform as an institutional check on the more insidious behaviors of the financial services industry. Headed informally by Elizabeth Warren in an advisory role, the CFPB is currently building its operations in preparation for July 21st, 2011 when much of its authority goes into effect. However, the financial sector and its congressional allies seek to prevent the agency from commencing operations in its current form.

Summary: The full Financial Services Committee recently passed three specific proposals:

• H.R. 1121, the Responsible Consumer Financial Protection Regulations Act of 2011, would change CFPB governance from a single director to a five-member commission, appointed by the President, with no more than three members from the same political party.

• H.R. 1121 Sponsor: Rep. Spencer Bachus (R-AL6). Cosponsors: 34 (all Republicans). Full list at

• H.R. 1315, the Consumer Financial Protection Safety and Soundness Improvement Act of 2011, would make it easier for the Financial Stability Oversight Council to overturn CFPB regulations by requiring a simple majority the vote requirement from 2/3 to a simple majority and expanding the conditions justifying such an overruling.

• H.R. 1315 Sponsor: Rep. Sean Duffy (R-WI7). Cosponsors: 4 (all R – Reps. Bachus, Capito, Carter and McKinley)

• H.R. 1667, the Bureau of Consumer Financial Protection Transfer Clarification Act, would strip the CFPB of its regulatory powers until/unless a director is appointed and confirmed by the Senate.

• H.R. 1667 Sponsor: Rep. Shelley Capito (R-WV2). Cosponsors: 14 (all Republicans). Full list at

Another proposal not discussed in the hearing, H.R. 1355 by Rep. Randy Neugebauer, would move the agency from the Federal Reserve into the Treasury Department, thus subjecting it to the annual appropriations process.

CBO Score: H.R. 1121 estimated to cost $71 million by the CBO. Details:

H.R. 1315 would have no budgetary impact. Details:

Savings from H.R. 1667 vary based on the time a director is confirmed:

Supporters: Most Republicans, financial sector and allied organizations, etc.

• Supporters claim the new agency is too broad in scope with too few curbs on its power, and balance must be restored to provide more congressional     oversight and bipartisan input. Yet most supporters simply believe the agency should not exist at all.

Opponents: Most Democrats, Americans for Financial Reform, etc.

• Opponents point to the recent financial meltdown as proof that greater     institutional checks on the financial sector are needed. They believe the CFPB’s current structure ensures it will maintain the flexibility to carry out its watchdog mission effectively.

Further links

H.R. 1121 full bill text:

H.R. 1315 full bill text:

H.R. 1667 full bill text:

Consumer Financial Protection Bureau official website:

CNN article reviewing the 4/6 hearing:

The Hill article summarizing the bills and key supporter arguments:

Huffington Post review of 5/24 Oversight Committee hearing with Elizabeth Warren: