Toomey Proposes Legislation to Change CFPB’s Leadership Structure to Bipartisan Board

Just a few weeks before he is set to leave office, Senator Pat Toomey (R-Pa.), ranking member of the Senate Banking Committee, alongside Senator Bill Hagerty (R-Tenn.), introduced the CFPB Stability Act, which would reform the Consumer Financial Protection Bureau’s (CFPB) funding and leadership structure. Both have long been criticized by Republicans.

Specifically, the legislation would subject the CFPB to the Congressional appropriations process instead of its current independent funding mechanism and it would change the Bureau’s leadership from a single Director to a bipartisan five-member board.

“This structure will ensure that the CFPB considers a diversity of voices when it forms policy,” Toomey said in his opening statement at a recent Senate Banking Committee hearing. “These accountability measures will help make the agency more responsible, balanced, and measured. And Congress will have to accept some responsibility for what the CFPB does.”

CFPB Director Rohit Chopra appeared before the Senate Banking Committee at the hearing. According to American Banker, Chopra said that he believes independent agencies are capable of avoiding political influence, and that the five-member board would allow for less accountability than the current structure.

The U.S. Chamber of Commerce supported Toomey’s legislation, making it a powerful ally for Republicans. Earlier this year, the Chamber joined several banking trade groups in a lawsuit against Chopra’s guidance defining “unfair, deceptive and abusive acts and practices” under fair-lending laws.

Bill Hulse, Vice President of the Center for Capital Markets Competitiveness at the Chamber, said that the legislation will “ensure the CFPB adheres to the checks and balances as called for under the Constitution. The business community is committed to working with Congress to build bipartisan consensus to improve transparency and accountability at the CFPB.”

Alternatively, Senator Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, said that Democrats will continue to support the CFPB’s current structure. He noted that other agencies like the Federal Reserve and the FDIC aren’t subject to congressional appropriations.

“Congress created the CFPB and specifically designed its funding structure to make the agency an effective consumer watchdog,” he said.