House Financial Services Committee Passes CFPB Reform Bill
During a House Financial Services Committee markup last week, 14 legislative proposals passed the committee, clearing them for consideration before the full House. One of these, the CFPB Transparency and Accountability Reform Act, would make major changes to the Consumer Financial Protection Bureau (CFPB).
Introduced by Rep. Andy Barr (R-Ky.), the bill would accomplish several objectives long sought by congressional Republicans.
First, it would reform the Bureau’s funding source, bringing it under the congressional appropriations process instead of receiving its financing from the Federal Reserve. This provision is already the subject of ongoing litigation, with the Supreme Court of the United States set to take it up after the Fifth Circuit Court of Appeals ruled that the funding structure was unconstitutional last October.
The legislation would also change the leadership structure from a single director to a bipartisan, five-member commission; establish an Inspector General to oversee the Bureau; create a new Office of Economic Analysis and require a cost-benefit analysis for the Bureau’s activities; require all proposed rules to consider the impact on small businesses; and provide awards to whistleblowers.
Even if the legislation ultimately passes the House of Representatives, the Democratic-controlled Senate is unlikely to consider it and the President is unlikely to sign it into law. However, based on the Supreme Court’s ruling on the funding matter, the Bureau may be subject to at least one reform.
The CFPB Transparency and Accountability Reform Act was agreed to in the Committee by a vote of 26 ayes to 23 nays.